By Kristy Dorsey

Scottish entrepreneur Brian Williamson is attempting to mount a campaign in support of moves that he says will release of flood of cash into the “real economy” at what is looking to be one of the most critical economic periods of the pandemic.

He is calling for swift action by the UK Government to unlock “record amounts of dry powder” – the money that has been raised by investment houses but has yet to be deployed amid the uncertainty created by Covid-19. According to market data group Preqin, these private investors are currently sitting on a record £1.2 trillion globally, including some £205 billion in Europe.

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To achieve this within the next three months, which Mr Williamson said will be crucial for the UK economy, he is proposing that Chancellor Rishi Sunak implement a hefty but temporary increase in tax relief on money channelled through the Enterprise Investment Scheme (EIS) and its sister programme, the Seed Enterprise Investment Scheme (SEIS).

“For me this is a quest, because once the time to act has passed, it is lost,” he said. “We need this money in the economy right now, not in a year’s time.”

He is arguing that tax relief through SEIS should be raised from 50 per cent to 80%, and that on EIS should rise from 30% to 60%, but only for a six-month period. This would provide the impetus for investors to get cash into the accounts of a swathe of small and medium-sized business that are currently struggling, but which also have future growth potential.

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Mr Williamson said he has had an informal conversation with Downing Street representatives about this, and would now like to see more decisive action.

He further argues that the cost of such a move to the Treasury would be negligible, as the sacrifice of initial tax receipts from investors would be offset by those from the people employed by the investee companies and their suppliers.