In the face of great uncertainty, the UK government announced on Wednesday that it will borrow more to invest for the long-term. It is welcome that some of this additional investment will be channelled through the venture capital sector, and the government clearly believes that the benefits of private equity-style investing can be harnessed to help Britain meet the undeniable challenges it is likely to face as it enters the Brexit negotiations.

The UK’s official, independent forecaster – the Office for Budget Responsibility – had very little information to go on when predicting economic growth for the next four years, and its central forecast might be better described as a guess, with a wide range of possible outcomes accompanying the headline prediction. The Chancellor of the Exchequer accepted that uncertainty and abandoned the fiscal targets of his predecessor to give him some headroom in case things don’t go as well as he hopes. In the meantime, aiming to meet the UK’s productivity challenge, the government promised “high-value investment” and pledged £23 billion (€27 billion) for “economically productive infrastructure” over five years. While not an extraordinary sum, and with much of it already earmarked for rail improvements and affordable housing, this is encouraging for those who think that the government will need to provide additional support to the economy as it adjusts to a post-Brexit world. But many sectors will no doubt be competing for the unallocated cash.

In that respect the British venture capital sector, which will probably need to find a substitute for EU funding channelled through the European Investment Fund (EIF), will be encouraged by the announcement of an additional £400 million (€470 million) to be injected into venture capital funds via the British Business Bank, which will then be invested into growing UK companies. Venture capital investment is vital for small and medium sized businesses who are often unable to access more traditional funding sources. Very often the lack of available investment means these growing companies are absorbed by much larger rivals in their sector, instead of continuing to grow organically.

But this announcement is also to be welcomed as a sign that the government recognises the ability of the private sector to deliver longer-term investment (echoing the rationale for a new EU venture capital fund of funds programme announced recently by the European Commission), and also of the increasing importance of the British Business Bank, which could step in to fill any gap left by the EIF post-Brexit. Alongside this additional funding, the announcement by the Prime Minister this week of the "Patient Capital Review", to be chaired by former head of Permira, Sir Damon Buffini, is further recognition of the value of long-term capital investment. The review will seek to identify and break down the barriers to getting long-term investment into our most innovative growth companies.

Our full analysis of the details of the Autumn Statement can be read here – with perhaps the most significant issues being the proposed legislation on interest deductibility, adjustments to partnership taxation, and the ending of tax advantaged “employee shareholder status”. But while, as expected, the Statement doesn't contain anything ground-breaking for the industry, there are signs that this government recognises the good that private equity and venture capital can do for the UK economy.