Small Businesses: Closures Lorely Burt To ask the Secretary of State for Business, Enterprise and Regulatory Reform (1) how many small business closures there have been in each region in the last five years; (2) how many small businesses have closed in the last five years during their first (a) 12 months and (b) five years of trading, broken down by region; (3) what assessment he has made of the impact of the rate of small business closures on (a) each region and (b) England. Mr. Timms Data on small business closures by region are not available. However, data on the number of businesses of all sizes that de-register for VAT each year, and the proportion that remain registered for 1 and 4 years, in each UK region, are published by BERR. The following table shows the number of VAT de-registrations in each UK region and country 2001-05. ---------------------------------------------------------------------------------------------------------------------------------------------------------- | |De-registrations| ---------------------------------------------------------------------------------------------------------------------------------------------------------- | |2001 |2002|2003|2004|2005| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |United Kingdom |155,890 |162,405|165,530|163,400|152,945| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |England |136,520 |142,375|144,740|142,870|133,230| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |North East GOR |4,110 |3,995|4,010|3,850|3,600| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |North West GOR |15,500 |16,220|15,955|15,650|14,265| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |Yorkshire and the Humber GOR |11,160 |11,560|11,140|11,225|10,745| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |East Midlands GOR |9,905 |10,155|10,695|10,615|9,765| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |West Midlands GOR |12,740 |13,130|14,255|13,860|12,610| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |East GOR |15,225 |15,475|16,115|15,995|14,690| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |London GOR |30,825 |32,625|31,760|32,145|30,230| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |South East GOR |23,970 |25,410|26,540|25,855|24,605| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |South West GOR |13,080 |13,810|14,265|13,680|12,720| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |Wales |5,465 |6,425|6,670|6,015|5,555| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |Scotland |10,955 |10,820|10,930|10,920|10,160| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |Northern Ireland |2,955 |2,785|3,190|3,595|4,005| ---------------------------------------------------------------------------------------------------------------------------------------------------------- |Source:Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2005, available at: http://stats.berr.gov.uk/ed/vat| | ---------------------------------------------------------------------------------------------------------------------------------------------------------- The following table shows the number of businesses that de-registered for VAT within one and four years of registration, for each UK region and country, by year of registration for the latest five years worth of available data. Data for five years after registration are not produced at regional level. ---------------------------------------------------------------------------------- |Number de-registering for VAT within one year|2000 |2001 |2002 |2003 |2004 | ---------------------------------------------------------------------------------- |United Kingdom |16,996|14,621|13,977|13,385|14,519| ---------------------------------------------------------------------------------- |England |14,992|13,003|12,306|11,778|12,685| ---------------------------------------------------------------------------------- |North East GOR |428 |405 |373 |353 |348 | ---------------------------------------------------------------------------------- |North West GOR |1,870 |1,583 |1,356 |1,254 |1,428 | ---------------------------------------------------------------------------------- |Yorkshire and the Humber GOR |1,188 |1,120 |1,070 |983 |1,045 | ---------------------------------------------------------------------------------- |East Midlands GOR |1,150 |945 |898 |911 |941 | ---------------------------------------------------------------------------------- |West Midlands GOR |1,314 |1,257 |1,197 |1,138 |1,198 | ---------------------------------------------------------------------------------- |East GOR |1,463 |1,282 |1,301 |1,218 |1,300 | ---------------------------------------------------------------------------------- |London GOR |3,887 |3,407 |3,197 |3,075 |3,285 | ---------------------------------------------------------------------------------- |South East GOR |2,364 |1,962 |1,920 |1,876 |2,073 | ---------------------------------------------------------------------------------- |South West GOR |1,369 |1,041 |1,058 |1,014 |1,038 | ---------------------------------------------------------------------------------- |Wales |610 |536 |495 |493 |486 | ---------------------------------------------------------------------------------- |Scotland |1,089 |944 |902 |887 |1,030 | ---------------------------------------------------------------------------------- |Northern Ireland |249 |220 |244 |235 |332 | ---------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- |Number de-registering for VAT within four years |1997 |1998 |1999 |2000 |2001 | --------------------------------------------------------------------------------------- |United Kingdom |72,524|74,340|71,651|71,920|65,966| --------------------------------------------------------------------------------------- |England |63,814|65,748|63,341|63,757|58,439| --------------------------------------------------------------------------------------- |North East GOR |1,661 |1,691 |1,720 |1,757 |1,618 | --------------------------------------------------------------------------------------- |North West GOR |7,700 |7,650 |7,290 |7,222 |6,660 | --------------------------------------------------------------------------------------- |Yorkshire and the Humber GOR |4,732 |4,899 |4,696 |4,922 |4,479 | --------------------------------------------------------------------------------------- |East Midlands GOR |4,469 |4,541 |4,250 |4,507 |4,185 | --------------------------------------------------------------------------------------- |West Midlands GOR |5,888 |5,951 |5,778 |5,707 |5,507 | --------------------------------------------------------------------------------------- |East GOR |6,764 |6,630 |6,384 |6,770 |6,112 | --------------------------------------------------------------------------------------- |London GOR |15,727|17,413|16,620|16,457|14,830| --------------------------------------------------------------------------------------- |South East GOR |11,085|11,188|10,836|10,782|9,892 | --------------------------------------------------------------------------------------- |South West GOR |5,802 |5,845 |5,779 |5,691 |5,088 | --------------------------------------------------------------------------------------- |Wales |2,431 |2,435 |2,350 |2,491 |2,241 | --------------------------------------------------------------------------------------- |Scotland |5,092 |5,086 |4,832 |4,583 |4,315 | --------------------------------------------------------------------------------------- |Northern Ireland |1,077 |1,120 |1,069 |981 |987 | --------------------------------------------------------------------------------------- |Source:BERR analysis of VAT and survival rate data| | | | | | --------------------------------------------------------------------------------------- VAT registration and de-registration data for 2006 will be published on 14 November 2007. Survival data will not be produced again until 2009. New VAT registrations exceeded de-registrations in the UK (and in all regions) between 2001 and 2005. The stock of VAT registered businesses rose by 4 per cent. during the period. VAT registrations do not capture all business activity. Businesses are unlikely to be registered if they fall below the compulsory VAT threshold, which was £60,000 at the start of 2006. Similarly, businesses that de-register may not have closed. Only 1.9 million out of 4.5 million UK enterprises (41 per cent.) were registered for VAT at the start of 2006. Although data on the number of VAT de-registrations are routinely collected and monitored, there is currently no general information on the impact of business closures at regional and national level. However a study commissioned for the London Development Agency in 2005l showed that out of the 790,000 jobs lost through SMEs closing down in London between 2001 and 2003, 88 per cent. found immediate employment elsewhere, 8 per cent. went in self-employment and 1 per cent. into training. Only 3 per cent. went into unemployment. At appropriate levels, business closures are a necessary part of the productive churn process, creating space for more productive and innovative firms to expand, and therefore an important step in boosting regional and national productivity. Data on closures, including data at a regional level, are routinely collected and monitored. 1 Business Closures in London: Final Report, 2005, TBR Economics