The British Business Bank is owned by the government and was set up in 2014 to support small and medium-sized companies (SMEs). In 2018 there were 5.7 million SMEs, over 99% of all businesses. This should be good news for them.
Similarly, the European Investment Fund (EIF) is the EU’s equivalent method for providing finance to SMEs, but works across all EU member states. This is where the government has pledged to find the funds from.
Expect some debate about how much the “repatriated funds” should be. The method for calculating the amount was included in the joint report for the first phase of Brexit negotiations. The figure mentioned was €3.5 billion, but based on the value of the UK’s 16% share of the European Investment Bank’s funds, the figure would be nearer €11 billion.
Either way, no figures made it into the Withdrawal Agreement so, in the event of a deal – or a deal similar to this one that includes a transition period – we probably won’t have confirmation for some time.
If there is no agreement in place when we leave the EU (a no-deal scenario), it could get difficult. If this happens, the Chancellor has pledged that British Business Bank will receive “resources to enable it to make up to £200 million of additional investment”. Whether or not this is consolation for SMEs, from our point of view it would mean a ‘broken’ promise as no funds would be would be “repatriated” from the European Investment Fund.
For now, given there have been negotiations about how much funds could be directed to the UK, there is enough to say this is ‘in progress’. We’ll update this page as conditions of our exit are known. Follow this policy for updates.
- The UK’s stake in the European Investment Bank – Full Fact
- Britain still wants funding from the EU’s investment bank after Brexit, David Davis says – The Independent
- European Investment Fund
- Withdrawal Agreement and Political Declaration – Gov.uk