HC Deb 20 May 1996 vol 278 c50W
Mrs. Roche

To ask the Chancellor of the Exchequer when he expects the European loan guarantee scheme to begin in the United Kingdom; what will be the maximum size of loans; which companies will qualify; who will pay the premium for the guaranteed support; and if companies who receive loan guarantees under the small firms loan guarantee scheme will be eligible to apply. [29411]

Mrs. Angela Knight

The Commission recently published a proposal for a European loan insurance scheme for employment—ELISE. Detailed discussions with member states on its working have not yet begun and there are a number of issues to be resolved before the Council of Ministers can consider whether or not to adopt the proposal. It is therefore not possible to give information about a possible start date in the United Kingdom. The maximum size of loans covered is not mentioned in the proposal.

As proposed, ELISE would cover 50 per cent. of loans from private sector institutions, or up to 75 per cent. where the loan is transnational. Small and medium enterprises with plans to create permanent jobs with the help of loans from private sector institutions would be eligible to apply for the guarantee. It is anticipated that the scheme would focus particularly on SMEs with fewer than 50 employees. More detailed eligibility criteria are set out in Commission recommendation C (96) 261 final. Under the terms of the proposal, the premium for the guarantee would be met from the Community budget.

If the scheme were to be adopted, the Government would consider whether firms who had received loan guarantees under the small firms loan guarantees scheme would be eligible to apply for further assistance under ELISE.

Mrs. Roche

To ask the Chancellor of the Exchequer what has been the outcome of discussions between his Department and the European Commission regarding the European loan insurance scheme for employment. [29413]

Mrs. Knight

The proposal has only just been published. Therefore, as yet there has been no discussions either with individual member states, in a Council working group, nor with the Commission.