Bankruptcies (Hansard, 8 July 1987)

§ 12. Mr. Ashdown
asked the Chancellor of the Duchy of Lancaster what is the latest available figure for bankruptcies among small businesses.

§ Mr. Kenneth Clarke
The provisional estimate of the number of bankruptcies in England and Wales for the first five months of 1987 is 2,940. Almost all of these related to insolvent individuals and we estimate that between 70 and 75 per cent. were unincorporated businesses.

§ Mr. Ashdown
Does the Minister realise that many have severe doubts about the accuracy and comprehensiveness of those figures—particularly the National Federation of Self-Employed and Small Businesses, which believes that the Government need much better figures to judge bankruptcies and the reasons for them, and that that could be done without increasing the burden on small businesses? Will the Minister take steps to improve those figures to ensure that the start-ups of today are not the bankruptcies of tomorrow?

§ Mr. Clarke
I prefer my figures to other people's. However, I am happy to examine what the National Federation of Self-Employed and Small Businesses says about the figures and to consider suggestions for improving them. My figures show a fall in the number of bankruptcies. In addition, any bankruptcy figures have to be set against the very encouraging increases in the number of new businesses and in the number of self-employed people.

§ Mr. Andrew MacKay
Does not the whingeing of the hon. Member for Yeovil (Mr. Ashdown) demonstrate the reason why the Liberals did so badly at the general election? The electorate is pleased that we have a very large number of new small businesses setting up and relatively few bankruptcies. The public are realistic enough to recognise that there will always be some bankruptcies, which is quite healthy in a free economy.

§ Mr. Clarke
Last year's VAT registration figures show a net growth of 20,000 new businesses, and there has been a growth in the number of new businesses every year since 1979. I agree that it was rather off-beat of the hon. Member for Yeovil (Mr. Ashdown) to ask a question about bankruptcies, but that is rather typical of the Liberal party's approach.

§ Mr. Allen McKay
Will the Minister confirm that when the poll tax is introduced there is to be a revaluation of business property, which will result in a tremendous increase in the rates on those premises? [Interruption.] No, business premises. In many instances the revaluation will increase the rates, and that will lead to further bankruptcies.

Mr. Clark
Like my hon. Friends, I am intrigued by the wide-ranging nature of questions to the Department of Trade and Industry. However, because of my interest I pay close attention to what is being proposed for business rates. We are, indeed, due for a revaluation of business rates, which is essential to bring the valuations up to date. However, I assure the hon. Gentleman that his constituents' interests are very much served by the proposals. The updating of valuations and the transfer to new national non-domestic rates will be of great advantage to large parts of northern England and its industry.