We are extremely concerned about the impact on particularly smaller businesses of the very steep rises in employers liability insurance and other insurance premiums. I am sure that the hon. Gentleman will, like me, welcome the fact that, in the Budget, my right hon. Friend the Chancellor of the Exchequer froze insurance premium tax, which, in any case, can be offset against corporation tax, which we have also cut. My right hon. Friend the Secretary of State for Work and Pensions will report shortly and the Office of Fair Trading is also looking at whether there are problems specifically within the insurance market that need to be tackled from the competition point of view.
We are supporting businesses and giving them the right incentives to increase their rate of innovation. For example, the research and development tax credit already supports businesses to the tune of £400 million a year. Now we are increasing the scope and the value of the credit, and we will consult business on how to improve its operation even further.
We are also giving businesses the right support for innovation. My Department's smart awards for prototypes and technology development help 800 companies a year. The awards help companies such as Cooke Optics in Leicester, which received a grant of £140,000 to develop the high definition film lenses that were used to make the film "Chicago", and Nanomagnetics in Bristol, which has just set a world record for computer information storage. In six months, it expects to beat that record again. It was helped by a grant of £160,000.
That is not all that we are doing to help smaller businesses get the funding that they need. At the request of business, we have extended the small firms loan guarantee scheme. We have created regional venture capital funds—£80 million of public funding that is attracting another £250 million from private investors. All that is threatened by the Conservative party and its pledge to cut public spending by 20 per cent. It would do less; we will do more.
In the United States, small business investment companies are backed by the Government, and that has helped companies such as Apple Computers, Compaq, the Intel Corporation and AOL to move from being start-ups to world beaters. We want our smaller businesses to have the same opportunities, so we shall look at the scope for similar support in Britain.