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Business Starts

Volume 127: debated on Thursday 11 February 1988

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9.

To ask the Chancellor of the Exchequer by how much business starts have exceeded stops between 1979 and 1986.

Over the seven years from January 1980 to December 1986 the net increase in the number of businesses registered for VAT averaged 500 a week.

I congratulate my right hon. Friend on creating the economic framework that has led to the successful figures that he has announced, and will he join me in congratulating those who create the wealth —mostly the self-employed, small business men and the enterprise agencies — on achieving that magnificent figure?

I am grateful for my hon. Friend's enthusiasm. Since 1979 the number of self-employed is estimated to have increased by more than a third to 2·7 million up to the end of 1986. Of those companies registered for VAT, a majority have a turnover of less than £250,000 and constitute 20 per cent. of the nation's turnover, and enterprise agencies now number 350. I agree with my hon. Friend on the contribution that all three have made to the creation of jobs.

Does not the right hon. Gentleman's original answer, that 500 extra businesses per week register for VAT, hide the real fact that there were more than 100,000 bankruptcies and insolvencies in the business sector between 1979 and 1986 — the highest record at any time in Britain's history? That is one reason why my hon. Friend the Member for Vauxhall (Mr. Holland) was able to point out that manufacturing investment is lower now than it was in 1979 when that lot on the Conservative Benches came into power.

The hon. Gentleman is correct in thinking that I was quoting a net figure. There is always an element of risk in setting up any business, but that is what enterprise is all about. The hon. Gentleman will be encouraged to hear that bankruptcies last year were falling.

Is my right hon. Friend aware that over 6,000 new firms come on to the market in the north-east of England every year and that about 10,000 people are self-employed on Teesside alone? Is that not convincing proof that the Government's policies in the north-east of England are working just as well as, if not better than, they are in other parts?

I salute my hon. Friend for his constant championing of firms in the north-east.