HC Deb 03 July 1985 vol 82 cc328-9
13. Mr. Michael Brown

asked the Secretary of State for Trade and Industry whether he is satisfied with the geographical distribution of funds under the business expansion scheme to small firms.

Mr. Trippier

I am aware that many investments under the business expansion scheme have been located in the south-east and the midlands. I am keen to encourage greater use of the scheme in other parts of the country, and I am glad to note that more BES funds are now being launched outside London.

Mr. Brown

My hon. Friend's answer will be of great comfort to businesses in the north, Yorkshire and Humberside. Will he also consider whether there is scope within the business expansion scheme to enable companies to borrow sums of about £50,000? That could be of considerable assistance to them.

Mr. Trippier

The business expansion scheme is for equity investment from outside rather than for borrowing. Sometimes the supply of smaller amounts of capital is difficult because the procedure of appraisal and monitoring can be disproportionate. None the less, I am pleased that 30 per cent. of companies receiving BES investment received £50,000 or less, and that 50 per cent. received £100,000 or less. I do not suggest that we are complacent about the position. We must increase awareness of the benefits of the scheme, and we must encourage the start-up of more regional or sub-regional funds.

Mr. Rowe

Does my hon. Friend agree that the learning time for people to understand the schemes launched by his Department is longer than he probably expected? Does he further agree that we need an assurance that schemes such as the business expansion scheme and the loan guarantee scheme will be left in place long enough for people to understand fully the best way to exploit them?

Mr. Trippier

The learning curve is longer than I expected. Sometimes I think that I must say something seven times, and then people are on to it in a flash. It is important to increase awareness of some of our schemes, which we have simplified, wherever we can. The two schemes to which my hon. Friend referred have proved to be beneficial and are much appreciated by small firms.