Skip to main content

Business Insolvencies

Volume 730: debated on Thursday 23 March 2023

In total, 22,109 companies entered insolvency in England and Wales in 2022, which was 57% higher than in 2021. There were lower rates of insolvency in 2020-21 because of the measures that we put in place to prevent the foreclosure of certain businesses. The trend over the last three years is pretty consistent with previous trends, but it is something that we are looking at very closely.

Notwithstanding that the trend may be consistent, in the last quarter of 2022, 313 companies in Scotland were insolvent. In my Edinburgh West constituency, companies are struggling, particularly those in the hospitality sector, in which there is high energy use. The Federation of Small Businesses has criticised the Budget by saying that there is nothing for businesses once the energy prices support ends at the end of next month—there is nothing for cashflow; there is nothing for tackling late payments. For the sake of small businesses, will the Government review their decision to take away support for businesses at the end of the month?

The Government have not taken away support; they have replaced one scheme with another. The scheme we have now reflects the fact that wholesale prices have come down significantly since the peak between July and December last year. Of course, we are concerned about businesses that are suffering, particularly those that entered into contracts between July and December on fixed rates that last up to a year. We are working with Ofgem and suppliers to see what can be done to ensure that those businesses are not unfairly treated.

Does my hon. Friend agree that the tax cut for business worth £25 billion in the Chancellor’s Budget will benefit national and international businesses in the new powerhouse city of Southend such as Olympus KeyMed and ESSLAB, incentivising investment, boosting growth and delivering more jobs not just in Southend but across the UK?

What an excellent question—I absolutely agree with my hon. Friend. In previous Budgets, the Chancellor has set the annual investment allowance effectively for SMEs at £1 million; that is permanent policymaking. He has now introduced full expensing across the piece, which, as she says, costs around £9 billion a year. We are the only country in the developed world, to my knowledge, that has done full expensing across the board in that way, and it will be a massive boost to business investment, not least in Southend.

Our great British businesses are being let down by 13 years of Tory failure, with little to help but sticking-plaster policies. The Minister may not be aware, but insolvency numbers are at their highest level in four years, which is perhaps no surprise when we look at this Government’s record on small businesses, with Help to Grow: Digital ditched, energy bill support slashed and business investment the lowest in the G7. It is no wonder that the Federation of Small Businesses says that the Budget has left many businesses feeling “short-changed”. It is clear that for this Tory Government, small businesses are an afterthought, so will the Minister follow where Labour leads—reform business rates, boost skills, make Brexit work and make Britain the best place to start and grow a business?

I wish I could say I was surprised that the hon. Lady is once again talking Britain down. The reality is that UK growth since 2010 has been the third fastest in the G7. The private sector is now bigger than it was pre-pandemic. Private sector growth has been on trend in terms of other countries, with businesses growing. The FSB says that three out of five businesses are more resilient than they were pre-pandemic. Of course, we would all like to reform business rates, and it has been looked at on a number of occasions, but simply saying that we will scrap something that would cost £22 billion a year without putting in place a replacement for that funding is irresponsible. What will she do to replace business rates—[Interruption.] She made the point. She wants to scrap business rates, but what will replace it with, given that it would cost £22 billion a year?