HC Deb 02 March 2000 vol 345 cc551-2
18. Mr. John Wilkinson (Ruislip-Northwood)

What assessment he has made of the trend in the number of business failures in the current financial year; and if he will make a statement. [111549]

The Minister for Competitiveness (Mr. Alan Johnson)

Business failures in October to December 1999, the third quarter of this financial year, were lower than in either of the two previous quarters. The figures are well below those seen as a result of the 1991 recession.

Mr. Wilkinson

I am grateful to the hon. Gentleman for his answer, which is reassuring as far as it goes, to the end of the last calendar year. Can he assure the House that the disparity in the economy between the potentially overheating south-east and the rather more depressed midlands and north will not get worse? Will he, with the Treasury, ensure that the Government do not rely on interest rates set by the Bank of England alone to keep the economy in balance, and that the interests of small and medium-sized enterprises will be borne in mind, as they have a great burden of regulation and form-filling to cope with?

Mr. Johnson

It is good of the hon. Gentleman to join us. I can give him an assurance that the trend is good. In the same period, 26,000 more small businesses started than were made insolvent, which is one of the best records that we have seen. Because of the economic cycle, the trend for insolvency does not feed through for a while, so the upturn in the last quarter will be reflected more fully in the economic position in the year to come.

Mr. Owen Paterson (North Shropshire)

Are not more businesses likely to fail if 30,000 skilled IT workers are driven abroad by IR35?

Mr. Johnson