Dáil Éireann debate -
Wednesday, 5 Apr 1995

Vol. 451 No. 6

Written Answers. - Business Expansion Scheme.

Kathleen Lynch

Question:

50 Kathleen Lynch asked the Minister for Finance the number of projects aided in 1994 by the business expansion scheme; the criteria by which private companies operating business expansion scheme funds and projects are selected; the criteria according to which companies are selected to participate in business expansion scheme funds; the number of jobs directly attributable to the business expansion scheme since its inception; the proposals, if any, he has to review the scheme; and if he will make a statement on the matter. [5491/95]

Minister for Finance (Mr. Quinn)

Statistics on the business expansion scheme are compiled by the Revenue Commissioners on the basis of amounts invested in the scheme as formally notified to them in the tax year ending 5 April each year. On that basis, the total number of companies for which investments were notified to the commissioners in the tax year 1993-94 was 211. The corresponding number arising in the tax year 1994-95 up to 29 March last is 367.

Individuals may invest in BES qualifying companies directly or invest through a designated investment fund. However, in all cases it is the company itself that decides whether to seek BES funding. Investors will qualify for relief under the scheme only if they invest in qualifying companies either directly in individual companies or indirectly through a designated fund which generally undertakes a portfolio of investments. The criteria applied by investors in choosing either particular BES projects or designated investment funds is one of individual choice. Likewise, the criteria to be applied by a designated investment fund in making BES investments is a matter for the managers of the fund concerned.

I am informed by the Revenue Commissioners that reliable statistics relating to the number of jobs created by the business expansion scheme are not available to enable the information requested by the Deputy to be provided. In late 1990, a general review of the scheme was conducted by my Department with the Revenue Commissioners and the Department of the Marine, the Department of Tourism and Transport and the Department of Industry and Commerce. The review identified growth of approximately 4,240 jobs in 347 companies which had received almost £95 million investment under the scheme at a cost of some £49 million to the Exchequer.

Since 1992 the Revenue Commissioners have been collecting figures with a view to assessing the growth in employment in firms assisted by the BES. While the figures available so far do not, in themselves, provide reliable indicators of the total number of jobs saved or created solely because of the BES, they will provide a basis for the more detailed review of the economic efficiency of the BES, promised in the Government programme. That review will be completed in time for its conclusions and recommendations to be considered in the context of next year's budget and Finance Bill.