§ Mr. Brightasked the Chancellor of the Exchequer whether any evidence has been brought to his attention of investment proposals under the terms of the business expansion scheme being made to unquoted companies with access to other sources of funds; and if he will make a statement.
§ Mr. MooreUnquoted companies have in principle many possible sources of funds. For example, equity capital may be provided by proprietors, their close family, directors and employees and corporate and institutional investors. Similarly, loan finance may be available from banks and other institutions, companies and individuals. The business expansion scheme was directed at one specific area within this broad field: new full-risk equity investments, by individuals not otherwise connected with the company, for a period of at least five years. As a result many unquoted trading companies have been able to raise money on terms more favourable to new and expanding activities where the rewards may be more distant and uncertain, and require a greater commitment from investors. If my hon. Friend has a particular case in mind perhaps he would write to me.
§ Mr. Brightasked the Chancellor of the Exchequer how much of the investment provided under the business expansion scheme has been through professionally organised funds and how much through other sources, including individuals.
§ Mr. MooreFunds approved under the business expansion scheme have so far raised over £30 million of new money. Other funds and direct individual investors are not required to inform the Inland Revenue of148W investment until tax relief is claimed. It will therefore be some time before the amount provided by these sources is known.
§ Mr. Brightasked the Chancellor of the Exchequer how many funds have been set up to provide investment capital to small and medium-sized businesses under the terms of the business expansion scheme.
§ Mr. MooreThirty-four investment funds have received approval under the business expansion scheme.