§ 3. Sir Peter Blakerasked the Paymaster General what steps he will take to ensure that the current business expansion scheme does not disadvantage hotels.
§ The Parlimentary Under-Secretary of State for Employment (Mr. David Trippier)Under the Budget proposals for revisions to the business expansion scheme, hotel companies will continue to be eligible provided that they meet conditions on the backing of investments by property assets. Genuine risk-bearing investments will not be disavantaged.
§ Sir Peter BlakerWill my hon. Friend assure me that the hotel industry will not be put at a disadvantage compared to other industries by the proposals in the Finance Bill? Can he say the same for the self-catering accommodation sector?
§ Mr. TrippierI am anxious to give my right hon. Friend the assurance that he is seeking. Well planned hotel projects and projects related to tourism will still be attractive investments, and BES tax relief will obviously be a useful incentive. It is important to stress that BES was first introduced to attract those who would otherwise not have made safe investments to take the risk, and that is the reason for the tax incentive. The new proposals by my right hon. Friend the Chancellor of the Exchequer mean that risk-free investments are excluded, as I believe they should be.
§ Mr. RoweDoes my hon. Friend accept that the business expansion scheme is admirable but suffers from one great defect—that the people who would be most likely to make such an investment are those most closely related to the people running the business? Will he speak to his right hon. Friend the Chancellor of the Exchequer to see whether there is some device—for example, channelling through an enterprise agency—which will make it possible for parents to put their money into their children's enterprises?
§ Mr. TrippierThat point has been put to my right hon. Friend the Chancellor several times, but there is, of course, the additionality problem. My right hon. Friend has always said that such money would be invested in those companies in any event without the additional incentive of the tax relief. That is the argument, but I shall be happy to draw my hon. Friend's points to the attention of my right hon. Friend.