Private Equity (Transfer of Undertakings and Protection of Employment) Bill

My hon. Friend is absolutely right, and I am grateful to him for emphasising my point. I mentioned earlier that 1,300 companies received private equity investment in the last financial year. More than three quarters of them received less than £2 million. Those investments were not, therefore, big takeovers; rather, they were crucial to development and growth, often of small companies or start-ups. Small businesses in this country often find it difficult to get going; the high taxes and the number of regulations that they face mean that it is hard for them to become successful. Private equity is one of the key investors in helping small businesses to get started, develop and therefore become bigger businesses that can pay higher taxes and employ more people. In the UK, because of the success of private equity in the British economy, firms have started investing more heavily in the companies that they choose to back. Although only 11 more UK companies received investment in 2006-07, the amount invested increased by 50 per cent. to more than £10,200 million. These are, therefore, substantial investments. Investments were made in 312 overseas companies in that period—an increase of more than 37 per cent. on previous years. Total overseas investment by UK private equity companies has reached more than £11,600 million, which is more than is invested in this country; it is 53 per cent. of the total investment, compared with only 42 per cent. in 2005. I have a concern that UK private equity companies are already increasingly investing overseas and that a Bill of the sort that is proposed might well encourage the proportion of overseas investment to increase. I am trying to ensure that that is avoided. Most of that investment was in continental Europe—this relates to a point made by my hon. Friend the Member for Ribble Valley—where 214 companies received investment, which is more than double the number funded in all other overseas territories combined. The amount of investment in continental Europe was more than £10,000 million, which is only slightly below the investment in the UK. We therefore cannot take it for granted that UK private equity firms will continue to invest in the UK no matter what burdens we keep imposing on them. I want to emphasise a point made by my hon. Friend the Member for Christchurch. Investment in start-ups increased considerably in the last financial year: £531 million was invested in 245 start-up companies, compared with 208 previously. Each company received an average of about £2.2 million, compared with £0.8 million in previous years. Private equity is making a great contribution to our economy. Technology-focused businesses also received more funding in the last financial year—a 35 per cent. increase in investment on the previous year. Private equity firms are therefore providing lots of investment in the country, and lots of jobs—jobs that are in industries that we need to attract to be successful in a global economy.