Despite the concerns expressed in recent research by the ESCP-EAP European School of Management and the University of Sheffield, the official data confirms that new business start-ups continue to be established faster than existing companies wither and die, indicating that the fertile conditions enjoyed by enterprise since the mid-1990s are still in place. The estimates of the number of enterprises registering and de-registering for VAT in 2006 were published this week by the Department for Business, Enterprise and Regulatory Reform (BERR). These figures are regarded as one of the key measures of business activity, and the number of start-ups has now risen every year for the past 12 years, with 21% more VAT-registered businesses in the UK than in 1995.
The data were published as start-up activity was being celebrated across the UK under the banner of Enterprise Week. Business groups welcomed the increase in business start-ups but warned that the credit squeeze, combined with the government’s proposals to raise capital gains tax and scrap taper relief, risked undermining the entrepreneurial spirit.
“Despite the increasing number of hurdles and burdens being placed in front of entrepreneurs, the attraction of private enterprise is still strong,” said David Frost, director-general of the British Chambers of Commerce.
