To ask the Chancellor of the Exchequer, what recent estimate his Department has made of the (a) number of business exits, (b) number of insolvencies and (c) extent of consolidation within the business population as Government covid-19 support is phased out; and what assessment he has made of the impact of each of those categories on the employment rate.
25 November 2021
Support schemes such as the CJRS and government-backed loans kept insolvencies and business exits below normal levels throughout much of the pandemic.
To protect businesses from aggressive creditor action during Covid enforced restrictions there was a temporary ban on Winding Up Petitions (WUP) for Covid-19-related debt. As the economy returns to normal trading conditions, it is right that creditor powers are restored.
Insolvencies returned to pre-covid levels in September 2021, coinciding with the end of the WUP ban. It is too early to assess the full impact of support ending on business consolidation as some support schemes, such as the rent moratorium, are still in place.
Vacancy levels are higher than normal. As a result, we expect that the employment rate should remain relatively stable in the face of business exits and consolidation in 2022-23.