The Business Start-up Scheme (Hansard, 19 October 1981)

§ Baroness Sharples
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Minister of State, Treasury (Lord Cockfield)
My Lords, considerable interest has been shown in the scheme and the Government are confident that it will be of great benefit in encouraging investment in new trading ventures. It is not possible at this stage to give particulars of investment by individuals as claims will not be made until next year. But two funds have already been launched which are seeking to raise £16.5 million for investment in this field.

§ Baroness Sharples
My Lords, I thank my noble friend for that reply, which is extremely encouraging for this very enterprising start-up scheme. Will he please say whether he considers the amount of capital that will be invested in these companies to be sufficient for their needs—risk capital?

§ Lord Cockfield
My Lords, we keep this matter under continual review. In the last two Budgets a whole series of measures have been introduced, designed to encourage the flow of new capital into small enterprises. This is an entirely new departure and one without parallel anywhere else in the industrial world. We wish it well and will watch its progress with great interest.

§ The Earl of Lauderdale
My Lords, can the noble Lord tell us whether the considerable interest he has referred to is really unparalleled? Can he also perhaps put some flesh on the bones of a rather bare statement?

§ Lord Cockfield
My Lords, it is the scheme itself which is without parallel elsewhere in the industrial world. So far as putting flesh on the bare bones is concerned, the simple truth of the matter is that the scheme has only just been embodied in legislation but the first claims by individuals investing under this scheme can be made only after April of next year. It is only then that we shall be able to gauge how successful the scheme has been; but it has made a good start.

Lord Bruce of Donington
My Lords, while welcoming the general thrust of the entire scheme, may I ask the noble Lord whether the Government have given 556 consideration to significantly increasing the loan limits that are at present in force? May I also ask whether the noble Lord has fully taken into account the extra interest burden that seems so far to be inevitable?

§ Lord Cockfield
My Lords, I hope I may be forgiven if I say, with respect, that I believe that possibly the noble Lord may have in mind the loans guarantee scheme rather than the business start-up scheme. The business start-up scheme is designed to encourage raising new equity capital, and indeed there is a strong argument for saying that it is in the lack of equity capital that the weakness lies. But the loans guarantee scheme has already made a very good start, with more than 800 loans having been already agreed, amounting to approximately £30 million.

§ Lord Kennet
My Lords, is the noble Lord aware that while all parties are, or should be, in agreement with the general purpose of this scheme, most of us who are actually trying to operate it are finding the drafting extremely cloudy and are in some doubt as to whether we are doing the right thing?

§ Lord Cockfield
My Lords, I am grateful for the welcome given by the noble Lord. If I may, I would make two comments on the specific points he raises. First of all, a large number of amendments were made on Committee stage in another place which were designed to meet many of the criticisms which had been made, with the result that the scheme as it finally emerged represented a noticeable improvement on the scheme as originally introduced. Secondly, as my honourable friend Mr. John MacGregor, Parliamentary Under-Secretary of State for Industry, announced on 22nd September, a series of 14 regional conferences and 50 smaller conferences have been set up in order to explain the terms of the scheme to people who are interested.