Vol. 416 No. 8
96 Mr. Durkan asked the Minister for Finance if he will outline his plans, if any, to expand the business expansion scheme; and if he will make a statement on the matter having regard to the urgent need for employment creation.
The business expansion scheme was extended in the 1991 Finance Act until 5 April 1993. The 1991 Finance Act also excluded asset-backed sectors, addressed the problem of multiple companies and the problem of companies raising BES funds for on-lending to qualifying subsidiaries. It reduced the company limit to £500,000 and introduced a £75,000 lifetime cap on investors to refocus the BES on generating capital for smaller, riskier companies and to reduce the cost of the scheme to the Exchequer. The indications are that these changes have been successful.
I have no plans to expand the scheme as this would dilute its focus on the sectors which currently qualify for it and would be difficult to justify given its very costly nature.
The BES must also be viewed in the context of the Government's policy of tax reform which involves reducing tax rates and extending the standard band financed by an extension of the tax base through abolition/curtailment of special reliefs. This policy has been recommended by such diverse bodies as the Industrial Policy Review Group, the Commission on Taxation, the EC, the OECD and the National Economic and Social Council. The Government is totally committed to this policy which will create and sustain the best environment for job creation.
