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Fergus fights back on those start-up figures

Fergus Ewing, Minister for Energy, Enterprise and Tourism, is a keen reader of Scot-Buzz. “I do enjoy Scot-Buzz”, he writes. “The thought provoking jargon-free prose makes it a good read.”

But he has taken issue with our “Wakey, Wakey” comment seeking more Scottish start-up business statistics. And he has obtained figures from his officials to set out the position in Scotland.

He says the 380,420 figure we cited from StartUp Britain website is not a “reliable statement of new businesses “for the simple reason that they cover limited companies and do not therefore cover those who go into business as a sole trader or partnership, or other non-incorporated basis.”

While we do not accept the criticism of the StartUp Britain figure we gave, we are happy to set out the key points in the  note from his officials thus (with their emphasis):

The official start-up statistics for the UK and Scotland are based on the number of businesses newly registering for VAT/ PAYE each year.  These statistics, published by the ONS, measure all new registrations above the VAT threshold (currently £79,000) and businesses operating PAYE schemes. The latest official start-up figures from the ONS show that there were 16,940 new business registrations in Scotland in 2011 (UK: 261,370).

Note that the UK figure is significantly lower than the UK StartUp Tracker figure so far this year (380,420) – this is largely because not all companies will register for VAT/PAYE. The official 2012 figures will be published by the ONS in December.

However, there are more up to date sources of information used by the Scottish government to gauge start-up activity in Scotland.   

Businesses in Scotland – this Scottish Government National Statistics publication provides an annual snapshot of the number of businesses operating in Scotland. It is the only source of estimates of the entire business base operating in Scotland – which includes all companies as well as sole traders, partnerships and charities.  The Businesses in Scotland figures for March 2013 will be published on October 30. 

The latest figures, as at March 2012 (which we covered extensively on Scot-Buzz when they were first released) show that:

  • The total number of private sector enterprises in Scotland was estimated at 341,360 – the highest level since 2000 (earliest estimate available).
  •  Between March 2011 and March 2012 the estimated number of enterprises increased by 9.9 per cent (30,835 enterprises).
  •  Business stock estimates for the UK as a whole are published by the Department for Business Innovation and Skills (DBIS). These show that for the UK as a whole the total number of businesses (registered and unregistered) increased by between 4.4 per cent and 5.6 per cent between the start of 2011 and start of 2012. This compares to an increase in total number of businesses of 9.9 per cent for Scotland between March 2011 and March 2012 (as per the Businesses in Scotland results).

Although the DBIS figures are on slightly different basis to the Scotland results Scotland’s business stock between 2011 and 2012 has increased at a higher rate compared to the UK as a whole.  However, Scotland’s business stock of 769 enterprises per 10,000 adults is lower than that for the UK as a whole - 935 per 10,000 adults.

The Annual Population Survey provides an estimate of the number of self-employed people on a quarterly basis. The latest figures show that, in the year from April 2012 to March 2013, there were 293,300 people in Scotland reporting to be self-employed (11.9 per cent of all those in employment) compared to 4,160,000 in the UK (14.1 per cent of all those in employment).

We appreciate the Minister’s reply and look forward to the update on October 30.