Clause 28
Finance Bill
10:30 am
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
The clause increases the limit for enterprise investment schemes from £400,000 to £500,000. It is one of a series of changes that have been made since the scheme was introduced in 1993. The limit was increased to £150,000 in April 1998, to £200,000 in April 2004, and to £400,000 in April 2006. Can the Minister advise the Committee why the Treasury increased the limit to £500,000, not to any other amount? The scheme is covered by European Union state aid rules and the clause makes it clear that the increase is subject to approval by the EU. When will clearance be given, and has it been applied for to date? What is the reason for the delay between clearance being applied for and its being granted? There is some ambiguity about the meaning of paragraph 10 of the explanatory notes, which states:
“The EIS has been notified to the European Commission as a State aid, but not yet approved.”
Does that mean that the increase to £500,000 has yet to be approved or that the scheme itself has yet to be approved? It is important for the Committee to know that. Have the Government commissioned research on the effectiveness of the relief in stimulating investment in high-risk businesses?