Limited Companies

Oral Answers to Questions — Trade and Industry – in the House of Commons at 10:30 am on 22nd February 2007.

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Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin 10:30 am, 22nd February 2007

How many limited companies ceased trading between January 2006 and January 2007.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The number of company insolvencies in England and Wales in 2006 totalled 17,819, while 190,742 companies were struck off the Companies House register.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

I am grateful to the Minister for that response. Does he acknowledge that many of those companies were small companies? Given that small companies are the driver of the British economy, does he agree that any new tax on small or medium-sized companies would be a retrograde step? What discussions has he had with his counterparts at the Treasury about the possibility of a new local business tax resulting from the Lyons review? Would he oppose any such tax?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The hon. Gentleman is asking me to anticipate the outcome of the Lyons review and to make pronouncements before it has been completed. We are in close touch with the Treasury on all business matters, and it is certainly the role of the DTI to provide business support. We do that through Business Link, which is attracting a great deal of interest and received more than 700,000 hits last year from businesses, helping them to stay in business and to develop. We have also published our better regulation simplification plan for all businesses, and the small business forum is part of the ministerial challenge panel that I chair, and helps to ensure that small businesses can survive in today's competitive market.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

Does my hon. Friend agree that the figures that he has given to the House provide only a partial picture of what is going on in UK business, because much business formation consists of sole traders and partnerships, rather than limited liability companies? To put the matter in context, will he tell the House how many limited liability companies were registered during that period, to give us an in-and-out measure?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

My hon. Friend is describing the positive position of British business, and I can tell him that the three-year survival rate—a key indicator—for businesses registered in 2002 was 71 per cent., and that three-year survival rates have been increasing since 2000. The number of registrations at Companies House has exceeded the number of deregistrations each year between 1995 and 2005. That is a very positive image of British business.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

With both individual and corporate insolvencies now on the increase, is it not the case, as my hon. Friend Mark Pritchard said, that the small business man is increasingly feeling the heavy weight of this Government's regulations and stealth taxes and, in many cases, simply closing up shop?

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Employment Relations & Postal Services)

The hon. Gentleman gives me the opportunity to say a little more about the Government's priority of better regulation. We are the first Government to quantify administrative burdens and publish the results, and we have committed ourselves to a 25 per cent. reduction by 2010. Business has always identified the administration burden as one of its top priorities. The DTI's contribution to the £2 billion of savings that we have identified to be achieved by 2010 is £700 million a year, and we are working closely with all levels of business to ensure that we are addressing this issue. If the hon. Gentleman has any suggestions for improvements in better regulation, he can either hit the better regulation website or drop me a line. I will be very happy to hear from him.