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Clause 5

Part of Finance (No. 2) Bill – in a Public Bill Committee at 4:45 pm on 19th October 2010.

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Photo of Alison McGovern Alison McGovern Labour, Wirral South 4:45 pm, 19th October 2010

It is a pleasure to serve for the first time on this Committee under your chairmanship, Mr Caton. I wanted to ask the Minister a couple of additional questions about the clause. The enterprise investment scheme was designed to help smaller, high-risk trading companies to offer relief to investors and it is a measure that could be particularly crucial at this time.

Creative and high-tech companies, especially smaller creative or high-tech science-led companies, could be crucial to our future. That is especially true in my part of the world in Merseyside and the north-west, where we have particular expertise and a creative, science-led economy. I wanted to ask more about proposed new section 180A, which introduces the requirement that was referred to and concerns companies based

“wholly or mainly in the United Kingdom,” rather than those that have “permanent establishment” in the UK.

Does the Minister have an estimate for the volume of companies that will be affected? Is there any sense of what the trend might be? Will he say more about the representations that he mentioned and whether any of them covered that point? It would be helpful for the Committee to be made aware of the scale of the companies that we are dealing with, and to know how far that has been tracked by the Department.

The Minister also mentioned negotiations with the European Commission. Have any discussions involved the expertise of colleagues in the Department for Business, Innovation and Skills? They have particular responsibility for the kind of companies that I am concerned about. Will the Minister clarify for the Committee what discussions have taken place?

On firms in difficulty, we are obviously at a time when that definition will be apposite to the position that companies find themselves in. Will the Minister indicate the number of companies in the UK that could be affected by the measure? It would be helpful to have a sense of size and scale, and to know what discussions have taken place so far on how the provisions might impact on those specific companies.