Labour cautions that the devil may be in the detail as the Chancellor reveals the latest package of financial support for firms.
The Chancellor has revealed a £1.25bn scheme to protect innovative companies who can “power our growth” following the coronavirus pandemic.
As the previously announced Job Retention Scheme for furloughed workers opened for applications, Rishi Sunak said the government wanted to help start-ups and other smaller firms recover from the COVID-19 crisis, in sectors from tech to life sciences.
There are two elements to the latest package to help businesses through the coronavirus crisis.
The first is a new £500m loan scheme for high-growth firms, called the Future Fund, to be launched in May in a 50/50 partnership with the British Business Bank.
UK companies which have previously raised at least £125,000 in equity investment, but which are not listed on the stock market, are eligible.
Businesses can access between £125,000 and £5m from the government – with the sum matched by the bank – though the loan would convert to equity if not repaid.
The rest of the money available, £750m, is “targeted support” for small and medium sized businesses focusing on research and development.
Mr Sunak said: “Britain is a global leader when it comes to innovation.
“Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis.
“This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
The package was welcomed by business groups though Labour was more cautious in its response.
Shadow chancellor Anneliese Dodds said: “We have expressed major concerns about the ability of start-ups and innovate firms to weather the current crisis, not least because many fail to benefit sufficiently from existing programmes to stay afloat.
“While welcome, the devil will be in the detail of how firms can qualify for this funding and how long it will take to arrive.
“Given the very low rate of acceptance of applications for the small business loan programme, and the pressing and current time pressures facing many firms, this funding must be available quickly and with a minimum of paperwork if we are to prevent even more firms going bust.”