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Senior business figures are calling on Chancellor George Osborne to encourage larger firms to unlock their balance sheets and invest in SMEs through corporate venturing.

Britain’s biggest companies are sitting on a massive cash pile of £488 billion. Yet at the same time many dynamic smaller businesses find it hard to get access to finance and sound knowledge to support their growth plans.

The call comes from the Centre for Entrepreneurs, with less than three weeks to go to the chancellor’s Autumn Statement setting out his budget plans for the year ahead.

The business figures, led by entrepreneur Luke Johnson, chairman of the Centre for Entrepreneurs [pictured], says “it makes sense to incentivise corporates - which have money and connections - to invest and help the small businesses needing money and expertise.

“At present only the largest corporates tend to invest in smaller businesses and many firms in the mid-market who may see the strategic benefits of such corporate venturing are not incentivised to do so.

“There is an opportunity to double corporate venturing in the UK in the same way that the government's EIS scheme has doubled business angel investors since 2011. We encourage the Chancellor to explore the options for achieving this.

Co-signatures are Scott Barnes, chief executive Grant Thornton, Guy Rigby, Partner, Smith & Williamson, Tim Hames, Director General of the British Venture Capital Association, Simon Walker, Director General, Institute of Directors and Nida Broughton, Chief Economist, Social Market Foundation.

The letter calls for the re-introduction of the Corporate Venturing Scheme: “The digital economy has moved a very long way from the bubble that inspired the previous scheme. We now have a wealth of digital firms that are looking for support to scale up; and businesses in every sector need to collaborate with technology firms to ensure they remain competitive.

“Nonetheless only the largest corporates currently tend to engage in corporate venturing and many companies in the mid-market who may see the strategic benefits of venturing are not incentivised to do so.

“There is a huge opportunity here to enable dynamic UK firms to get the finance and advice they need to grow, enable larger firms to innovate and compete internationally, to attract overseas investment and stem the tide of UK tech firms moving to the US to seek venturing partners. We recognise the government’s strong support of business and the range of measures it has introduced to grow and diversify business finance, including the British Business Bank and SEIS; stimulating the corporate venturing market would further develop alternative sources of finance in the UK.

“We would encourage you to use the Autumn Statement to launch a consultation to seek views on options, including fiscal incentives, for stimulating corporate venturing.”