§ Mr. Brightasked the Chancellor of the Exchequer why investment trust companies are excluded from participating in the provision of personal equity plans.
§ Mr. Norman LamontThe prime aim of the personal equity plan is to encourage direct investment in British companies. Holdings of investment trusts in personal equity plans are allowed up to £420 a year or 25 per cent. of investors' annual subscriptions, whichever is the higher. The purpose of this limit is to enable small investors to have a reasonable spread of risk, without undermining the main objective of the scheme. Though investment trusts are companies under law, they cannot provide a sufficiently close relationship between the investor and the companies in which the trust invests. Also, many investment trusts have large holdings in foreign companies and gilts.