Dáil Éireann Debate, Thursday - 17 June 2004
39 Mr. Murphy asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the concerns of Enterprise Ireland concerning the effect that the suspension of the business expansion scheme is having on the emergence of start-up companies; and if she will make a statement on the matter. [17941/04]
View answerAs the Deputy will be aware, my colleague, the Minister for Finance, Deputy McCreevy, in his 2004 Budget Statement, announced that both the business expansion scheme, or BES, and seed capital scheme, or SCS, were being extended for a further three years to 31 December 2006 and that the maximum amount a company could raise under the two schemes was being increased from €750,000 to €1 million. I supported that decision, as there was a strong business case for extension of both the BES and SCS. Businesses, particularly small and start-up companies, often experience difficulty in accessing early stage development capital, and the BES and SCS help to bridge the financial difficulties experienced by new entrepreneurs. To that end, Enterprise Ireland has been actively marketing both schemes.
Following that announcement, the European Commission raised issues on a number of budget announcements on state-aid grounds, including the extension of the BES and SCS. Accordingly, the Finance Act 2004 provided that the extension of the schemes to 31 December 2006 and the increase in the company limit, along with some additional changes regarding the operation of the schemes provided for in that Act, would be subject to a commencement order being made by the Minister for Finance to allow clarification of the state-aid issues raised by the European Commission. Accordingly, the schemes are in effect in suspension from 5 February 2004 for new investments until such time as the Minister signs the commencement order.
I can assure the Deputy that my Department and Enterprise Ireland are working very closely with the Department of Finance to provide the clarification required by the Commission. The objective is to re-launch the BES and SCS as soon as the state-aid ruling is received. I fully appreciate the importance of both schemes to encourage entrepreneurs and private investors to invest in new start-up business and micro-enterprises.
In the meantime, Enterprise Ireland continues to work with client companies to identify alternate sources of funds, such as its seed and venture partners. Under the National Development Plan 2001-2006, Enterprise Ireland has committed €95.23 million towards the establishment of 14 new funds. However, the BES will remain a key source of start-up funding.
