Bill Jamieson: Start-ups betray weak pulse of the economy

The Scotsman covers our 2017 Companies House data analysis

Since the recovery from the 2008-09 recession, the start-up story across the UK has been strongly positive, helped by support from organisations such as Start-Up Britain. ONS figures show that in 2016 the number of business births rose from 383,000 to 414,000, a rise from 14.3 per cent of businesses to 14.6 per cent. Although business deaths were also up, from 283,000 to 328,000, or from 10.5 per cent to 11.6 per cent.

But more recent data points to a distinct fall in momentum. Last year business start-ups UK-wide fell more than 10 per cent to just over 589,000, according to figures from the Centre for Entrepreneurs (CFE) think tank. Data from Companies House showed 589,008 new businesses set up shop in 2017, down from 657,790 the previous year – the first drop in business launches since 2010.

The CFE’s analysis suggests this was caused in part by the government’s clampdown on so-called “disguised employment” among public sector workers. The measures, which stopped businesses from being classified as contractor accounting firms to avoid tax, came into effect in April 2017.

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