Small Businesses

HC Deb 01 November 1995 vol 265 cc345-8W

22. Mr. Butler

To ask the President of the Board of Trade what initiatives he is taking to assist small business. [38672]

Mr. Ian Taylor

A complete outline of the range of initiatives introduced is published in "Small Firms in Britain 1995", copies of which are in the Library of the House.

The business link network is the single most important industrial initiative to be introduced by any UK Government. The national launch of the network took place on 31 October and by the end of the year every business in England will have access to the wide range of services available to assist their prosperity and growth.

24. Mr. Evennett

To ask the President of the Board of Trade how many small businesses have been established since 1992. [38674]

Mr. Taylor

Estimates for business starts in England and Wales are produced by Barclays and Natwest banks. These show that in the two and a half years to end June 1995 approximately 1 million new businesses started up.

Mrs. Roche

To ask the President of the Board of Trade what advice his Department issues to employees of small businesses regarding(a) rights at work and (b) terms and conditions of maternity pay. [40543]

Mr. Jonathan Evans

My Department produces a comprehensive range of free booklets describing the rights of all employees under employment legislation. The booklet"Maternity Rights" was produced with the Department of Social Security, which is responsible for the maternity pay provisions, and the Health and Safety Executive, and gives information about all aspects of the statutory maternity provisions.

Mrs Roche

To ask the President of the Board of Trade how many small businesses there have been in Britain in each of the last 17 years; and, of these, how many had between(a) one and nine employees, (b) 10 and 99 employees and (c) 100 and 499 employees. [40545]

Mr. Page

Estimates of the number of businesses with fewer than 500 employees in the United Kingdom since 1979 are given ih the table. Separate figures are not available for Britain.

At the end of 1993, 791,000 businesses had between one and nine employees, 185,000 had between 10 and 99 employees and 14,000 had between 100 and 499 employees; the remainder have no employees. There are no comparable figures for earlier years.

Table 1: Number of businesses in the UK 1979–1993
Thousands
Year	Number of businesses
1979	2,420
1980	n/a
1981	n/a
1982	n/a
1983	2,880
1984	n/a
1985	n/a
1986	3,230
1987	n/a
1988	3,680
1989	3,830
1990	3,780
1991	3,600
1992	3,510
1993	3,570

Note:

n/a not available.

Source:

Small and Medium Sized Enterprise (SME) Statistics for the UK, 1993.

Mrs. Roche

To ask the President of the Board of Trade what assessment his Department has made of the number and proportion of small businesses which(a) have debt financed over five years and (b) have debt financed by overdraft; what comparable figures are available for European competitor nations; and what plans he has to ensure that longer-term financing is available to small businesses. [40537]

Mr. Page

A number of different surveys confirm that there has been a marked trend away from overdrafts towards term lending among small and medium-sized enterprises in this country in the last few years. According to figures produced by the British Bankers Association, term lending now accounts for 61.7 per cent. of total lending to SMEs compared to 40 per cent. in 1990. The Government welcome this trend and hope it will continue.

As regards the situation in other European countries, a recent survey carried out by 3i found that an average of 29 per cent. of SMEs are reliant upon overdrafts.

Although the Government believe that finance for any business venture is a commercial matter for the banks and other financial institutions, we continue to point out to SMEs the dangers of an over-reliance on short-term debt finance and to encourage them to consider longer-term alternatives. In appropriate cases, term loans over periods of two to seven years are available under the Government's small firms loan guarantee scheme.

Mrs. Roche

To ask the President of the Board of Trade if he will make a statement with regard to the small firms Ministers' network announced by his Department on 12 October on (a) what role each Minister will play, (b) how many times per year the network plans to meet, (c) when it last met, (d) what objectives have been set and (e) what effect the network will have on the public purse. [40539]

Mr. Page

The first meeting of the small business Ministers took place on Monday 30 October. It is envisaged that the full team of Ministers will meet approximately every six months with individual bilateral meetings being arranged as necessary to discuss specific issues.

The aim of the group is to discuss how each Department can develop its own programme to help small businesses and how such a programme can be taken forward.

The group itself will not have a direct effect on the public purse.

Mrs. Roche

To ask the President of the Board of Trade how many small businesses have failed within three years of starting up in each of the last 10 years; and what proportion this is of the total of new small businesses. [40544]

Mr. Page

Official estimates for business survival are produced from the VAT register and are given in the table. Figures for business failure rates are not the same as deregistration rates as many deregistrations are for reasons other than business failure.

Table 1: Deregistration rates of businesses registered for VAT
Year	Number deregistering within 3 years (thousand)	Per cent. deregistering within 3 years
1980	57	36
1981	57	37
1982	63	38
1983	69	38
1984	71	39
1985	71	39
1986	72	38
1987	78	37
19881	94	39
1989	110	43

Note:

¹ Deregistration rates for 1988 onwards will be inflated by additional deregistrations following the VAT threshold increase in 1991.

Source:

DTI Small Firms Statistics Unit.

Mrs. Roche

To ask the President of the Board of Trade what is his current estimate of the number of small businesses in each London borough. [40546]

Mr. Page

The best estimate of the number of small businesses by London borough is given by the number of VAT registered businesses. A copy of the most recent figures "VAT Registrations and Deregistrations, County and District Analysis 1992–1993" is in the Library of the House.

Mrs. Roche

To ask the President of the Board of Trade what assessment his Department has made of the cost to the public purse of the bankruptcy of small businesses as regard(a) write-off of tax debts, (b) tax relief to creditors on their losses in the bankruptcy and (c) the cost of statutory redundancy payments to the work force. [40548]

Mr. Evans

The information is not available.