Select committee: Treasury Committee
Recommendation 9
Nineteenth Report - Venture Capital
Published 24 Jul 2023
Paragraph 50
Addressed to HM Treasury
Treasury Committee The venture capital market All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
All relevant organisations in the venture capital industry ought to become signatories to both the Women in Finance Charter and Investing in Women Code, if they have not done so already. We have not determined that compulsory membership is appropriate at this time but recommend that HM Treasury and the BBB adopt a “comply or explain” policy with regards to both. Organisations ought to comply with the Charter or Code or explain why they are not, as a condition of EIS, SEIS and VCT eligibility. This approach will communicate to the market that the default expectation is that firms become signatories. Should diversity statistics and reporting not improve quickly enough, we will instead consider calling for compulsory membership.
From: Treasury Committee, Nineteenth Report - Venture Capital (HC 134), paragraph 50, 24 July 2023
Government response
The government responded to the whole report on 20 October 2023 (deadline 24 September 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.HM Treasury agrees that the EIS and VCT sunset clauses should be extended and that diversity data could be improved, but disagrees with making diversity data a condition of eligibility or with extending the company age and funding limits.
- On the sunset clauses, the Chancellor has stated his "firm intention" to extend the schemes beyond 6 April 2025, and HM Treasury "will provide further details on the schemes beyond 2025 at a future fiscal event".
- HM Treasury agrees that diversity data transparency and consistency could be improved and "will explore ways" to achieve this, but "does not agree" that eligibility for the schemes should be contingent on providing it.
- On a 'comply or explain' policy for the Investing in Women Code and Women in Finance Charter, the government "remains to be convinced" it should apply to EIS, SEIS and VCT eligibility, noting the British Business Bank already operates such an approach for its applicants.
- HM Treasury "is not convinced" that extending company age limits is the best way to support regional funding, and "disagrees" with consulting on higher funding limits, citing the risk of displacing investment from smaller companies.