The Women and Equalities Committee (WEC) has called on the UK Government to introduce a new Female Enterprise Investment Scheme in the upcoming Autumn Budget, describing it as a crucial opportunity to boost the economy by supporting women-led businesses.
The proposed scheme would sit alongside existing tax reliefs but offer greater incentives to channel investment into female-founded companies. According to the Committee, ensuring women have the same access to investment as men could generate an economic uplift of more than £250 billion.
MPs highlighted that access to finance remains a major barrier for female founders, warning that despite repeated reviews and initiatives, the “tiny fraction” of venture capital currently directed toward women-led businesses has not improved. WEC said the Government must use all available policy tools to drive systemic change in venture capital, including introducing new incentives and increasing transparency.
As part of its recommendations, the Committee urged the Financial Conduct Authority (FCA) to require venture capital firms to report on the number and proportion of deals awarded to female-led businesses, as well as the total amount of funding provided. These figures should be made public, it said, and firms that fail to comply should face financial penalties.
WEC also urged venture capital firms to take internal steps towards equality, including increasing the proportion of women on investment committees. However, the Committee stopped short of recommending mandatory gender quotas at this stage, suggesting that transparency measures and the proposed tax relief should first be given time to have an effect. It added that quotas could be considered later if there is no meaningful improvement.
The British Business Bank was also urged to play a stronger role. The Committee said the Bank should require all investors it supports to disclose the proportion of funding directed to female-led businesses and set a target to allocate at least 30% of its finance to such ventures. It also proposed that the Bank adopt a strategic goal of raising the share of equity finance for women entrepreneurs from 2% to 10% by 2030, and ensure all investors under its umbrella sign up to the Invest in Women Code.
The Committee also proposed that Innovate UK ringfence at least 30% of its funding for female entrepreneurs, with incremental increases to 40% by 2030. It said short-term measures should include lowering leverage ratios and reducing match funding requirements for women-owned businesses to create fairer access. It also recommended ensuring gender balance on assessment panels and publishing gender-specific data on funding applications, approvals, and allocations.
