Vol. 545 No. 2
55 Mr. Quinn asked the Minister for Finance if he has received figures from the banks or financial institutions indicating the numbers of applications received for the special savings investment scheme; if, on the basis of such figures, his Department has an assessment of the likely cost to the Exchequer of the special savings investment scheme; and if he will make a statement on the matter. [29965/01]
On the basis of the monthly returns to date made by the qualifying savings managers under the new savings scheme, the total tax credits claimed by the institutions so far amount to some £43.5 million, 55.2 million, in respect of subscriptions of £173.8 million, 220.7 million. As I said recently when replying to a virtually identical parliamentary question, the number of special savings incentive accounts in operation will not be available until after 28 February 2002, when the first comprehensive annual returns giving details of individual accounts are furnished by the qualifying savings managers.
As I have indicated previously in replying to parliamentary questions regarding, inter alia, the likely cost of the scheme, it is difficult to estimate the Exchequer cost of the special savings incentive scheme because of its very nature – it is new and innovative and the size of the Exchequer contribution will depend on take-up by participants in the scheme. When the question was being looked at prior to the publication of the 2001 Finance Bill provisions, my Department considered various ranges of costs based on different assumptions. As I said earlier in the year when answering a parliamentary question on this matter, a tentative estimate for a full-year cost was approximately £100 million, 127 million, and that in so far as the take-up turned out to be very strong, I said that this figure might have to be revised upward.
Figures to date indicate that the cost to the Exchequer for the first six months of the scheme is some £43.5 million, 55.2 million. However, it is not possible to extrapolate reliably from these figures what the twelve-month cost to the Exchequer of the SSIA scheme will be. It is likely, however, that the £100 million, 127 million, figure that I have already referred to will be reached, taking into account that the latest monthly figure indicated a cost to the Exchequer of some £11 million, 14 million. If this level of tax credit claims were continued for the next six months, the total cost for the first 12 months of the scheme would be some £110 million, 140 million. To the extent that the number of claims increases further, the cost will also increase.
