Three-quarters of venture capitalists believe the government is not doing enough to encourage investment in UK businesses, new research shows.
In its latest confidence and attitudes survey the British Venture Capital Association (BVCA) singled out Chancellor Gordon Brown for his failure to rein in public borrowing.
A survey by the group revealed that 78% of private equity investors think levels of public borrowing are too high.
It says there has subsequently been a decline in investor confidence towards fundraising, with only 43% of respondents believing that the climate for fundraising has been favourable in the past three months.
John Mackie, chief executive of BVCA, said: "While we welcome the chancellor's emphasis on entrepreneurship in his pre-budget report, are concerned that public borrowing should not undermine confidence in the economy or lead to any further increases in interest rates.
"As a result we will continue to call the chancellor to rule out any further increases in business taxation or any new imposition of regulation on business."
Overall, says the BVCA, the business climate for private equity has continued to improve over the last three months, with confidence up another 8% over the quarter.
Just under three-quarters of respondents, found the business climate favourable or very favourable for investment and 68% expect this to remain so for at least the first few months of 2005.
