HC Deb 15 September 2003 vol 410 cc599-600W
Mr. Laws

To ask the Chancellor of the Exchequer (1) what his estimate is of the total revenue cost of introducing enterprise management incentives in the March 2000 Budget to allow smaller high risk companies to issue the tax-advantaged share options to key staff, for each year from 2000–01 to 2005–06; what assessment has been made of the economic benefit of this scheme; and if he will make a statement; [130128]

(2) what the total cost of the Enterprise Management Incentives is for each year from 2001–02 to 2005–06; what assessment has been made of the benefits of this scheme; and if he will make a statement. [130131]

Dawn Primarolo

Estimates of the exchequer cost of tax and national insurance relief on options granted under Enterprise Management Incentives (EMI) were published in Budget 2000 for 2000–01 to 2002–03 (Table A.13). The additional costs of subsequent changes to the EMI rules were published in Budget 2001 (Table A.13) and the pre-Budget report 2001 (Table B4). These estimates are of the taxable salary sacrificed in lieu of EMI option grants and no further estimates have been made on this basis.

Each year, estimates of the tax and national insurance relief cost of gains made by employees upon exercise of their EMI options are published in Inland Revenue Statistics on the Revenue's website at:www.inlandrevenue.gov.uk/stats/emp_share_schemes/menu.htm. Only a very small number of employees exercised their options in the early years of EMI, so the estimated costs were negligible for 2000–01 and 2001–02. These costs will rise as the scheme matures.

As stated in the Full Regulatory Impact Assessment (RIA), published in March 2000, a full review of the success of EMI will take place during 2005. In the meantime, the Inland Revenue continues to monitor the administration, take-up, and exchequer costs of the initiative. To date, around 4,000 companies have granted EMI options to around 60,000 employees.

Mr. Laws

To ask the Chancellor of the Exchequer what his latest estimate is of the cost of the expansion of the Enterprise Management Incentives announced in the 2001 Budget for each year from 2000–01 to 2004–05; and if he will make a statement. [130133]

Dawn Primarolo

The information requested is contained in the Financial Statement and Budget Report 2001.