§ Mr. CranTo ask the Secretary of State for Employment, pursuant to his answer of 7 July,Official Report, column 695, what steps he plans to take to encourage venture capital investment in smaller businesses.
§ Mr. CopeThe Government's economic policies have created a climate in which enterprise is encouraged and rewarded and people are willing to invest in the wide range of opportunities that now exist. There has been significant growth in venture capital investment: from about £110 million in 1982 to £894 million in 1987.
The business expansion scheme facilitates the supply of equity by offering tax relief to individuals investing in unquoted companies. The proposed limit of £500,000 which can be invested per year per company will encourage those who are seeking the tax advantage of BES relief to examine smaller companies and gives a clear indication to investors and advisers that the BES is aimed at providing equity finance for smaller companies.
I will continue to encourage further funds for small firms through my regular contacts with venture capital organisations.