§ Mr. BellinghamTo ask the Secretary of State for Trade and Industry if she will make a statement on the availability of long-term sources of finance in the biotechnology industry. [140517]
§ Ms HewittThe Government has taken a number of steps to improve the financial environment for the biotechnology industry. The R&D Tax Credit system, has benefited many bioscience companies. UK-based companies can also take advantage of the DTI's business support products. Four products have been launched to date, all of which may be of use to biotechnology companies:
- Small Firms Loan Guarantee
- Grant for Investigating an Innovative Idea
- Grant for Research and Development
- Knowledge Transfer Partnerships
The Higher Education Innovation Fund (£187 million over 2004–05 and 2005–06) and Public Sector Research Exploitation Fund (£15 million over 2004–05 and 2005—06) are examples of Government's support for commercialisation of research.
Commercial funding of the industry through financial markets is essential, however, for its long-term success. Government will normally intervene only in financial markets where it can identify a clear market failure, but where such failures are identified, the track record of intervention is strong. For example the UK High Technology Fund (UK HTF), an element of the £180 million Enterprise Fund was announced in 1998. Other initiatives include the Regional Venture Capital Funds launched on a national basis for England through the Small Business Service in 2002, and funds set up by the Regional Development Agencies and Devolved Administrations to tackle localised market failures.
The UK has the most liquid capital markets in Europe and the most developed venture capital sector in the world after the USA. Optimism about the long-term prospects for bioscience is starting to return to public markets after a global downturn and good UK biotechnology companies are still receiving venture capital investment. The UK is also home to some of the world's largest pharmaceutical companies, providing long-term finance for biotechnology companies through deals to purchase or license technology.
442WThe Government is not complacent, however. The DTI and Department of Health prompted the establishment of the Bioscience Innovation and Growth Team, to identify and clarify the issues that are critical to the future competitiveness of the UK biosciences sector. The BIGT report was published in November 2003 and includes recommendations on the flow of seed capital, improvement of public sector technology transfer activity, and the provision of a favourable regulatory and fiscal environment. The Government will examine these recommendations carefully and respond to them all in due course.