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Businesses

Volume 448: debated on Monday 3 July 2006

To ask the Secretary of State for Trade and Industry how many businesses in (a) England and (b) Beverley and Holderness have (i) started up and (ii) ceased trading in each of the last nine years; and if he will make a statement. (81447)

Value-added tax (VAT) registrations and deregistrations are the best official guide to the pattern of business start-ups and closures. DTI data on the number of VAT registrations and de-registrations in (a) England and (b) the Beverley and Holderness constituency in each year from 1997 to 2004 are shown in the table. Data for 2005 will be available in autumn 2006. For comparison, the start of year stock of VAT-registered businesses is also given.

VAT registration and deregistration data do not capture all business activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold, which has risen in each year since 1997. Similarly, businesses that deregister will not necessarily have closed. Only 1.8 million out of 4.3 million businesses (42 per cent.) were registered for VAT at the start of 2004.

VAT deregistrations and registrations1997-2004

1997

1998

1999

2000

England

Registrations

159,730

160,235

155,390

157,615

Deregistrations

125,490

124,990

128,580

134,005

Start of year stock

1,376,795

1,411,035

1,446,280

1,473,090

Beverley and Holderness

Registrations

230

215

200

245

Deregistrations

230

190

195

205

Start of year stock

2,845

2,845

2,875

2,875

2001200220032004EnglandRegistrations148,835155,175166,505158,535Deregistrations132,995136,425146,390156,140Start of year stock1,496,7001,512,5451,531,2951,551,410Beverley and HoldernessRegistrations230265275260 Deregistrations220230205250Start of year stock2,9152,9302,9603,025 Note: Owing to rounding, the stock at the end of the previous year, plus registrations during the year, minus de-registrations during the year, may not exactly match the stock at the end of the year. Source: Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2004, Small Business Service, available from the Library of the House and also at http://www.sbs.gov.uk/vats.

In both England and Beverley and Holderness the stock of VAT registered businesses has increased or stayed constant each year since 1997, as registrations have matched or exceeded deregistrations in every year.

The number of VAT deregistrations in England has increased since 1997. However, business closures are part of the functioning of a dynamic economy and represent willingness among the business population to take risks or the displacement of less productive and innovative firms by more productive ones. Research indicates that improvements in productivity and economic growth are more likely to come from higher levels of both business entry and business exit.

Regional disparities in start-up and closure rates can have their root in the different economic histories and different opportunities available in each region. The Government’s aim is for every region to achieve success and good economic growth, which is why increasing resources have been put at the disposal of each Regional Development Agency.

To ask the Secretary of State for Trade and Industry how many new businesses registered in each London borough in 2005; and if he will make a statement. (81516)

Value-added tax (VAT) registrations are the best official guide to the pattern of business start-ups. The latest available figures for VAT registrations in individual London boroughs from 1994-2004 are shown as follows. Data for 2005 will be available autumn 2006.

However VAT registrations do not capture all start-up activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold. Only 1.8 million out of 4.3 million enterprises (42 per cent.) in the UK were registered for VAT at the start of 2004.

1994

1995

1996

1997

1998

1999

Inner London

16,720

16,285

17,500

18,830

20,160

20,205

City of London

1,100

1,015

1,030

1,065

1,220

1,275

Camden

1,895

2,035

2,230

2,420

2,405

2,285

Hackney

1,000

970

980

985

1,130

1,110

Hammersmith and Fulham

820

805

825

985

1,135

1,030

Haringey

840

800

925

945

975

975

Islington

1,185

1,155

1,260

1,555

1,595

1,445

Kensington and Chelsea

1,120

1,020

1,070

1,095

1,130

1,195

Lambeth

740

735

795

865

915

890

Lewisham

515

490

530

635

665

635

Newham

530

505

485

530

580

560

Southwark

835

775

970

1,015

1,090

1,025

Tower Hamlets

880

835

900

980

1,095

1,095

Wandsworth

1,015

960

1,040

1,160

1,220

1,235

Westminster

4,245

4,190

4,470

4,600

5,005

5,450

Outer London

14,550

14,585

14,785

17,065

17,610

16,135

Barking and Dagenham

270

370

260

290

310

345

Barnet

1,795

1,980

1,970

2,330

2,315

1,995

Bexley

510

485

515

650

580

560

Brent

1,015

1,005

1,005

1,200

1,185

1,150

Bromley

895

920

940

1,060

1,125

920

Croydon

970

910

960

1,045

1,070

985

Ealing

1,075

990

1,065

1,245

1,230

1,190

Enfield

720

710

750

815

865

845

Greenwich

415

430

455

560

570

525

Harrow

915

840

850

950

1,050

895

Havering

575

570

600

715

755

655

Hillingdon

835

760

795

905

915

840

Hounslow

695

730

695

800

845

820

Kingston upon Thames

540

515

560

680

695

610

Merton

570

635

600

750

835

725

Redbridge

740

740

765

835

930

860

Richmond upon Thames

820

890

900

970

1,010

955

Sutton

565

490

510

595

610

535

Waltham Forest

625

615

585

670

725

730

2000

2001

2002

2003

2004

Inner London

20,045

17,870

17,680

19,635

19,235

City of London

1,460

1,085

1,045

1,090

1,120

Camden

2,215

1,870

1,900

2,035

1,995

Hackney

1,155

1,015

1,030

1,075

975

Hammersmith and Fulham

1,015

995

940

965

1,065

Haringey

970

880

830

895

905

Islington

1,365

1,190

1,230

1,240

1,310

Kensington and Chelsea

1,225

940

1,095

1,160

1,175

Lambeth

845

1,000

875

900

1,025

Lewisham

605

605

595

600

625

Newham

575

530

545

650

635

Southwark

1,100

955

975

1,085

1,080

Tower Hamlets

1,095

935

970

1,110

1,045

Wandsworth

1,195

1,115

1,115

1,235

1,350

Westminster

5,225

4,765

4,535

5,590

4,930

Outer London

16,360

15,390

15,365

16,270

16,225

Barking and Dagenham

370

320

320

360

355

Barnet

2,045

1,760

1,700

1,635

1,610

Bexley

590

620

540

570

535

Brent

1,175

1,090

1,030

1,160

1,150

Bromley

955

965

950

985

995

Croydon

960

945

985

1,070

945

Ealing

1,195

1,150

1,185

1,315

1,295

Enfield

900

820

845

900

905

Greenwich

530

490

485

515

560

Harrow

945

915

920

1,045

1,205

Havering

650

640

620

620

600

Hillingdon

865

760

845

850

870

Hounslow

825

815

800

855

845

Kingston upon Thames

625

600

595

575

630

Merton

770

690

640

720

700

Redbridge

860

795

770

850

815

Richmond upon Thames

955

890

995

1,010

985

Sutton

505

505

490

540

535

Waltham Forest

650

630

650

685

695

To ask the Secretary of State for Trade and Industry, pursuant to the answer of 19 June 2006, Official Report, column 1576W, on the Business Review, how he plans to ensure that the information on companies' relationships with suppliers will be comparable (a) between companies and (b) over time. (80697)

As clause 399 (4) of the Company Law Reform Bill sets out, the Business Review is required to be a balanced and comprehensive analysis of the company's business consistent with the size and complexity of the business. There is no explicit requirement for companies to report on their relationships with suppliers. Where reporting on relationships with suppliers is necessary for an understanding of the development, performance or position of the company's business, it will be for the directors to consider what type of information to include in their review. The purpose of the Business Review is to inform members of the company and help them assess how the directors have performed their duty under clause 158 (duty to promote the success of the company). The statutory provisions therefore set out the framework of the Business Review, but it is for directors of each company to determine its content according to the circumstances of the particular company. These are matters for the directors' judgment and it is for the company's shareholders to hold the directors to account.

To ask the Secretary of State for Trade and Industry, pursuant to the answer of 19 June 2006, Official Report, column 1576W, on the Business Review, what (a) financial and (b) non-financial key performance indicators companies will be required to use when reporting on their relationships with suppliers in the Business Review; what estimate he has made of how many companies will be required to report on their relationships with overseas suppliers under the provisions of clause 399 of the Company Law Reform Bill; what types of information companies will be required to include in their reports on relationships with overseas suppliers within the Business Review; what the provisions are of the Company Law Reform Bill which will oblige companies to include information on relationships with suppliers; whether he plans to introduce statutory guidance on what types of information on supplier relationships must be included in the Business Review; and if he will make a statement. (80865)

Companies must include financial and non-financial key performance indicators in their Business Review to the extent necessary for an understanding of the development, performance or position of the company's business. The review is required to be a balanced and comprehensive analysis of the company's business consistent with the size and complexity of the business, but there is no explicit requirement for companies to report on their relationships with suppliers. Where reporting on relationships with suppliers—whether domestic or overseas—is necessary for an understanding of the development, performance or position of the company's business, it will be for the directors to consider what type of information to include in their review. This is a matter for the directors' judgment and it is for the company's shareholders to hold the directors to account. We will be debating the Business Review provisions in Committee.

To ask the Secretary of State for Trade and Industry how many firms in the Carlisle district council area have (a) started and (b) ceased trading in each year since 1995. (80328)

Value-added tax (VAT) registrations and deregistrations are the best official guide to the pattern of business starts and closures. DTI figures based solely on VAT registrations and deregistrations for Carlisle local authority are shown in the table for 1995 to 2004 inclusive. Data for 2005 will be available in autumn 2006. For comparison, the VAT-registered business stock in Carlisle is also shown.

Registrations

De-registrations

Registered business stock at end of year

1995

205

250

3,075

1996

180

220

3,030

1997

210

195

3,045

1998

210

195

3,060

1999

215

215

3,060

2000

220

210

3,060

2001

245

195

3,115

2002

260

200

3,175

2003

280

215

3,240

2004

285

210

3,315

Source: Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2004, Small Business Service, available from the Library of the House and also at http://www.sbs.gov.uk/vats. Owing to rounding, the stock at the end of the previous year, plus registrations during the year, minus deregistrations during the year, may not exactly match the stock at the end of the year

In Carlisle local authority the stock of VAT- registered businesses has increased every year from 2,000 onwards, as registrations have exceeded deregistrations throughout this period.

VAT registration and deregistration data do not capture all business activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold, which has risen in each year since 1997. Similarly, businesses that deregister will not necessarily have closed. Only 1.8 million out of 4.3 million businesses (42 per cent.) were registered for VAT at the start of 2004.

According to Barclays Bank's latest survey of business creation, which includes non-VAT registered businesses, Carlisle local authority had 400 business start-ups in 2005. Barclays business closure data are not available for local authorities. Barclays business start-up data are not available for local authorities before 2005.

To ask the Secretary of State for Trade and Industry how many small businesses that began trading since 1997 have subsequently ceased trading in (a) England and (b) Beverley and Holderness; and if he will make a statement. (80452)

Value-added tax (VAT) registrations and deregistrations are the best official guide to the pattern of business starts and closures. Latest VAT data on the total number of registrations since 1997 and the number of these registrations that subsequently de-registered, covering the period up to 2004, are shown in the table for (a) England and (b) Beverley and Holderness constituency.

VAT registration and deregistration data do not capture all business activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold, which has risen in each year since 1997. Similarly, businesses that deregister may not have closed. Only 1.8 million out of the 4.3 million businesses in the UK (42 per cent.) were registered for VAT at the start of 2004.

VAT registrations and subsequent deregistrations, 1997 to 20041

Registrations/deregistrations

England

New registrations 1997 to 2004

1,261,665

Number deregistering by end of 2004

429,510

Percentage still registered, end of 2004

66

Beverley and Holderness constituency

New registrations 1997 to 2004

1,910

Number deregistering by end of 2004

520

Percentage still registered, end of 2004

73

1 VAT registration and de-registration data are not available by size of business. However, 98 per cent. of the total stock of VAT registered businesses are small (0-49 employees). Source: Office for National Statistics, UK Business: Activity, Size and Location—2005, available from http://www.statistics.gov.uk/StatBase/Product.asp? vInk=933 Source: New analysis of VAT Survival Rates data 1994-2003, Small Business Service, available at http://www.sbs.gov.uk/survival: SBS analysis of ONS Inter Departmental Business Register data.

Business closures are part of the functioning of a dynamic economy and represent an increased willingness among the business population to take risks or the displacement of less productive and innovative firms by more productive ones. Research indicates that improvements in productivity and economic growth are more likely to come from higher levels of both business entry and business exit.

Regional disparities in start-up and closure rates can have their root in the different economic history and different opportunities available in each region. The Government’s aim is for every region to achieve success and good economic growth, which is why increasing resources have been put at the disposal of each Regional Development Agency.