The UK's private equity and venture capital industry is the largest in Europe, and the second largest in the world after the United States. The Government have delivered macro-economic stability that allows investors in venture capital to invest with confidence, and a low-tax environment, including an effective Capital Gains Tax rate of 10 per cent. on business assets held for at least two years, which allows them to keep more of the reward from successful investments.
The Government also make a number of direct interventions in the venture capital markets to support finance-raising by small companies affected by the equity gap, including Regional Venture Capital Funds and Venture Capital Trusts and the Enterprise Investment Scheme. A new model of support, Enterprise Capital Funds, will soon be launched by the Small Business Service, which will partner public and private money to invest in small businesses seeking venture capital.