Sexism in the City costing Britain billions in lost potential
Tackling sexism in the City could add £250bn worth of value to the UK economy, Harriett Baldwin MP, chair of the parliamentary Treasury Select Committee, will tell venture capitalists.
If women entrepreneurs were invested in at the same rate as men it could lead to the creation of one million new small or medium-sized businesses, she says.
The Government and the state-backed British Business Bank should consider creating venture capital funds with the specific purpose of improving diversity in capital allocation.
To restore confidence, venture captial needed to acknowledge “shocking” statistics which show that for every £1 of equity investment in the UK in 2021, all-female founder teams received just 2p, she said.
Citing 2019 figures which show that less than 2 per cent of venture funding went to black and ethnic minority-led business, is “unacceptable,” she will say.
“The best ideas, most viable businesses and most deserving causes are not always those of white male entrepreneurs. And this isn’t just about representation. It matters for our economy.”
Speaking to a conference of European women venture capitalists that “seeing this many female entrepreneurs and investment professionals gathered in one place is still too rare”.
“I entered Parliament because I saw that there were too few people like me making public policy decisions and I wanted to stand up and be counted. I was honoured to be asked join the Government in 2014 and in the role of Economic Secretary to the Treasury – the Minister for the City of London – I embraced the responsibility to encourage better, fairer representation in the sector.”
Praising the venture capital sector for the important work it does in “fostering growth, driving innovation, and championing bold ideas” she warns the industry was failing “when it comes to diversity”.
A truly representative sector can “spot opportunities where others may miss them” she argues.
“Recently, someone told me about investing in a kitchenware company. Everyone making the decision to invest was a man. In the real world, women make 80 per cent of the decisions on which kitchenware to buy. Replicating this disparity across investments in life sciences, renewable energy, or AI shows what VCs are currently missing out on.”
Firms failing to comply with the Women in Finance Charter, promoting gender inequality, should be barred from receiving government support and eligibility for tax reliefs relating to VC should be tied to transparency on diversity data she argues.
“We need to incentivise firms to tackle these problems. And we need intervention from Government, because it’s time we got serious in ensuring equality of opportunity in VC. The untapped millions of fantastic women and ethnic minority entrepreneurs both in the UK and across the world deserve nothing less,” she will argue.
The Treasury Committee is currently carrying out an investigation into sexism in the City to find out whether problems of a male workplace culture found to be present in the financial industry during an earlier inquiry into gender equality in 2018 – including “alpha-male behaviour, bonus negotiations, presenteeism, parental leave policies, flexible working and unconscious bias” – has improved.
