New Businesses: North West Region

Mr. Wallace
To ask the Secretary of State for Trade and Industry how many business start-ups there were in the north-west in each year since 1997.

Margaret Hodge
Value added tax (VAT) registrations and de-registrations are currently the best guide to the pattern of business start-ups and closures. DTI data on the number of VAT registrations, and the start of year stock of VAT registered businesses in the north-west from 1997 to 2005 are shown in the following table. Data for 2006 will be available autumn 2007.

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|                                                                                                                                                                          |1997   |1998   |1999   |2000   |2001   |2002   |2003   |2004   |2005   |2006   |
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|Registrations                                                                                                                                                             |17,700 |17,545 |16,875 |17,155 |16,485 |17,385 |19,005 |18,080 |17,500 |n/a    |
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|Stock                                                                                                                                                                     |159,055|161,155|163,125|164,645|165,945|166,925|168,095|171,145|173,575|176,805|
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|Source:Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2005, Small Business Service, available at: http://www.dtistats.net/smes/vat/index.htm|       |       |       |       |       |       |       |       |       |       |
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Although numbers of registrations in the north-west have remained fairly constant, the start of year stock has risen by 11 per cent. over the period.

VAT registration and de-registration 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 de-register may not have closed. Only 1.8 million out of 4.3 million businesses (42 per cent.) were registered for VAT at the start of 2005.