To ask the Chancellor of the Exchequer, what recent assessment he has made of the effect on the economy of the number of businesses ceasing trading in their first year in the 2019-20 financial year.
19 January 2021
HM Treasury regularly monitor a range of sources to assess the health of businesses and the wider corporate sector.
Official business demography statistics relating to the period 2019-20 are not yet available. The latest Office for National Statistics (ONS) Business demography series extends to 2019; this series is typically updated in November each year.
However, the ONS Business insights and impact on the UK economy statistical series regularly captures information on the impact of the coronavirus pandemic on UK businesses and the economy. This series records the proportion of businesses that have permanently ceased trading, disaggregated by industry. This series can be found here: https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/businessinsightsandimpactontheukeconomy
The Government has announced unprecedented support for public services, business and workers to protect lives and livelihoods. Our economic response to the pandemic is one of the most comprehensive globally.
The independent Office for Budget Responsibility (OBR) noted in its Autumn Economic Fiscal Outlook (EFO) in November 2020 that “in the short term, this extra spending will cushion the blow to household incomes and business finances arising from the pandemic. And in the medium term, it should reduce unnecessary job losses and business failures, thus limiting any persistent ‘scarring’ of the economy’s supply capacity and future tax base.”