Lord Taylor of Warwick

This Government is focussed on harnessing the creativity and brilliance of every woman in our country, and that includes ensuring they are able to access high paying sectors and roles. There is a wide array of work across Government which contributes to realising this ambition, whether that is by supporting start-ups, female entrepreneurs, or getting more women into, or returning to, highly-paid STEM careers.

In terms of work focussed solely on this issue, the Government continues to support the FTSE Women Leaders Review. This business-led framework sets targets to support talented, diverse leadership in the UK’s top companies.

Additionally, our Invest in Women Taskforce, is ensuring women-led start ups get the funding they need. The Taskforce is establishing a funding pool of more than £250 million for female-founded businesses through private capital, making it one of the world’s largest investment funding pools aimed solely at female founders.

The King’s Speech announced our intention to publish draft legislation this session that will introduce mandatory ethnicity pay gap reporting for large employers (those with 250 or more employees). This will help businesses to identify and close ethnicity pay gaps within their workforces.

The Windsor Framework provides a wide range support for business between GB and NI.

The UK Internal Market Scheme already enables businesses to move goods from Great Britain to Northern Ireland without being subject to customs duties. This is being expanded into the full UK internal market system which will further simplify the movement of goods for businesses.

There will be a competitive procurement exercise for provision of the Trader Support Service, which provides free support and guidance to businesses, to ensure continuity of service from 2026 onwards, and the current service has been extended to the end of 2025.

Last week, the Chancellor of the Duchy of Lancaster delivered a speech to the NATO Cyber Defence Conference in which he set out the Government's commitment to strengthening cyber resilience. We continue to work closely with allies to expose cyber attackers from across the world, whether that’s through public attributions, calling out hostile actors, or through sanctions. And we are constantly looking at where we can bolster our own digital defences here in the UK. In the King’s Speech, we announced that the Government would bring forward a Cyber Security and Resilience Bill, which will strengthen the UK’s cyber defences, and, working with industry, help make the UK the safest place to live and work online.

The Chancellor of the Duchy of Lancaster also announced a new Laboratory for AI Security Research at the University of Oxford (LASR), backed by £8.2 million of funding from the government’s Integrated Security Fund. The lab will bring together experts from government, industry and academia to seize the national security and economic opportunities of secure AI, underlining our commitment to stay one step ahead in this new AI arms race.

The information requested falls under the remit of the UK Statistics Authority.

Please see the letter attached from the National Statistician and Chief Executive of the UK Statistics Authority.

The Lord Taylor of Warwick

House of Lords

London

SW1A 0PW

14 October 2024

Dear Lord Taylor,

As National Statistician and Chief Executive of the UK Statistics Authority, I am responding to your Parliamentary Question asking what assessment has been made of the levels of small businesses closing since (1) the start of the COVID-19 pandemic, and (2) the UK’s departure from the EU (HL1421).

The Office for National Statistics (ONS) produces an annual Business Demography, UK publication1. The data are produced from the Inter Departmental Business Register (IDBR) which contains all businesses registered for VAT and/or PAYE. Unfortunately, the numbers of business deaths shown in this release are not broken down by size band, so it is not possible to show the number of small businesses which have closed down since the start of the pandemic.

However, we have provided figures in Table 1 showing the total number of business deaths since 2020. The latest annual figures available are for the year 2022. As the start of the COVID-19 pandemic was in March 2020 and the UK’s departure from the EU was on 31 January 2020 it is possible to cover the two periods using the same data.

The ONS also produces a quarterly publication on business births and deaths2. The quarterly figures are useful because they provide up-to-date business demography estimates. Please note though that the figures are regarded as ‘Official Statistics in Development’ and should be considered as less reliable than the annual business demography numbers.

We have provided, in Table 2, the number of business deaths, by quarter, from the first quarter of 2020 until the second quarter of 2024. We do not have these figures available by sizeband and hence are not able to show the number of small businesses which have closed over this period.

Yours sincerely,

Professor Sir Ian Diamond

1https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/business

demography/previousReleases

2https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/business

demographyquarterlyexperimentalstatisticsuk/latest

Table 1: The total number of business deaths, annually, from 2020 until 2022, UK.

Source: Annual Business Demography, Inter Departmental Business Register

Table 2: The number of business deaths, by quarter, from the first quarter of 2020 until

the second quarter of 2024, UK3

Source: Quarterly Business Demography, Inter Departmental Business Register

3Quarterly business demography estimates are regarded as official statistics in development.

Quarterly estimates, when summed over a year, do not add to the annual estimates obtained from the annual business demography output.

My Rt Hon Friends the Chancellor of the Exchequer and the Secretary of State for Business and Trade are responsible for this Government’s priority of growth and advancing opportunities for investment across the country.

Growth is the number one mission of the government. To encourage expansions, investment and recruitment, we are beginning to tackle barriers to investment, like skills, international talent, data, R&D, technology adoption, access to finance, competition, regulation, energy prices, grid connections, infrastructure, and planning – through a new Industrial Strategy that will support growth sectors to create more high-quality, well-paid jobs across the country, backed by employment rights fit for a modern economy.

The EU and the US are two of our largest trading markets, together accounting for over 64% of total UK trade. We are committed to strengthening our trade and investment relationships with both the EU and US and to working together to remove unnecessary barriers to trade

As set out by the Chancellor, we recognise that our markets are highly interconnected. This government’s main priority is growing the UK economy – strengthened trade with our most economically important partners is a major part of that.

Start-ups play a crucial role in fostering competition, inducing innovation and supporting the emergence of brand new sectors. The number of UK business births has fallen by 6%, to around 316,000 in 2023.

ONS UK Business Demography 2023, published 18 November 2024.

The Government is committed to hardwiring the voice of small business into everything we do. Our Small Business Strategy next year will set out our vision for all small businesses from tackling the scourge of late payments, tailored Business Support Advice, Access to finance, and Local Growth Hubs Networks, providing a strong business environment to drive economic growth in the UK.

The Government is creating a fairer business rate system by introducing permanently lower tax rates for retail, hospitality, and leisure businesses from 2026-27 and extending the current relief for 1 year at 40%. From 2026-27 the Government intends to introduce permanently lower tax rates for retail, hospitality and leisure properties with rateable values less than £500,000, which will be funded by the introduction of a Large Business Multiplier from 2026-27 on properties with a rateable value of £500,000 and above (less than 1% of all properties.)

The Government recognises the need to protect the smallest employers which is why we have more than doubled the Employment Allowance to £10,500, meaning more than half of businesses with NICs liabilities either gain or see no change next year. Businesses will still be able to claim employer NICs reliefs including those for under 21s and under 25 apprentices, where eligible. We will transform the apprenticeship levy into a more flexible growth and skills levy to support business and boost opportunity.

We are working further with the Hospitality Sector Council to address other strategic issues such as high street regeneration, skills, sustainability, and productivity.

The Government has developed a number of initiatives to increase the number of workers with AI-driven skills.

DBT’s Global Talent Network AI Futures programme attracts top young AI talents to the UK by focusing on exceptional international early to mid-career AI researchers, engineers, and entrepreneurs which will support the upskilling of our domestic workforce.

Skills England will build the highly trained workforce needed to deliver the national, regional and local skills needs of the next decade by setting both young people and adults up to succeed in an increasingly technology-driven world.

The AI Action Plan, commissioned by the Technology Secretary and drafted by the tech entrepreneur Matt Clifford, will set out, in part, the steps needed to equip our workforce with the right skills to support the AI sector’s growth.

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We have watched with interest the deals struck in the US to use new nuclear power for the increasing demand for low-carbon, reliable energy to support the potential expansion of the data centres required for artificial intelligence. In the UK, nuclear remains a key part of the energy mix. The Government is committed to working with industry to support potential projects.

The Government is working closely with Ofgem to ensure consumers are put first. My Hon. Friend the Minister for Energy Consumers meets regularly with energy suppliers to outline the Government’s expectations of the standard of service that should be provided to their customers. The impact of the energy crisis is still being felt by people across the country, and the Government, Ofgem and energy suppliers are working together closely to help vulnerable households this winter.

In November Energy UK, in collaboration with the Government, published a Winter 2024 Commitment for this winter which promises £500m of industry support to billpayers this winter. It also outlines how fifteen energy suppliers representing almost the entire market will continue to provide a range of financial support tailored to the needs of their customers.

Together with our Warm Home Discount, households who are struggling to pay their energy bills this winter will receive £1 billion of support.

In the short-term, we are continuing to deliver the Warm Home Discount which provides an annual £150 rebate off energy bills for eligible low-income households. The Government and industry have worked together to deliver a £500m Winter Support Commitment for customers, and we applaud suppliers stepping up on this matter.

Our Warm Homes Plan will transform homes across the country by making them cheaper and cleaner to run, rolling out upgrades from new insulation to solar and heat pumps. Next year will see a total investment of £3.2bn from government, social housing providers and obligations on suppliers.

We will continue to provide substantial funding to Local Authorities to support those most in need. At the Autumn Budget 2024, the Government announced that £1 billion, including Barnett impact, will be invested to extend the Household Support Fund (HSF) in England by a full year until 31 March 2026, and to maintain Discretionary Housing Payments in England and Wales.

Electricity imports enhance security of supply by providing access to a more diverse generation pool that complements our domestic energy mix. They provide system flexibility by responding to changes in supply and demand, which is vital as we continue to integrate more renewable energy sources with intermittent generation.

In their Winter Outlook, the National Energy System Operator expects full interconnector availability for most of this winter, with 6.6GW of capacity obliged to import if needed through the Capacity Market. This is up 1.5GW from last winter and underpinned by comprehensive legal and treaty protections to ensure the market remains open.

Winter Outlook | National Energy System Operator

As the first step towards the Warm Homes Plan, the Government has committed an initial £3.4 billion over the next 3 years towards heat decarbonisation and household energy efficiency, with £1bn of this allocated to next year. Additional funding will be considered in Phase 2 of the Spending Review, as the Warm Homes Plan is further developed.

In addition to the £3.4 billion of direct capital spend, the Government is ensuring continued further investment of up to £1.4bn through the supplier obligation schemes in 2025/26: the Energy Company Obligation (ECO4) and Great British Insulation Scheme (GBIS) which we are now reforming to improve delivery and ensure consumers save more on their energy bills.

• This Government recognises that AI presents incredible opportunities and benefits as well as risks that need to be considered. DSIT is working to address the cyber security risks to and from AI, and the National Cyber Security Centre continues to assess the cyber risks of AI.
• DSIT has recently published research, including a cyber security risk assessment on AI, and a voluntary Code of Practice setting baseline security requirements for AI systems.
• The AI Safety Institute's work is part of this Government's efforts to tackle cyber threats from AI. AISI's focus is how AI can meaningfully assist actors in causing harm, including cyber offense capabilities.
• The forthcoming Cyber Security and Resilience Bill will improve the UK’s cyber defences and help ensure organisations are better protected against cyber threats.

We are committed to building an AI sector that can scale and win globally, ensuring conditions are right for global AI companies to want to call the UK home. The AI Opportunities Action Plan will outline how we achieve this by securing the necessary infrastructure, talent and data access.

Our publicly funded portfolio of AI R&D investments is worth over £1 billion, with commitments extending beyond 2030. Key investments include £217M in two tranches of AI centres for doctoral training, £86M in AI research hubs, and £100M into BridgeAI, which supports businesses to adopt AI and develop cutting-edge AI technologies.

The Government believes that greater certainty over copyright and AI would support growth in both the creative industries and the AI sector.

This is a complex topic, and the Government is taking the time to hear stakeholder views and to carefully consider the issues, including the use of creative works to train generative AI models.

The Government is engaging with stakeholders to inform its approach and will soon be launching a consultation on a package of measures to address copyright and AI issues.

Artificial Intelligence (AI) is at the heart of the Government’s plan to kickstart economic growth, transform public services, and boost living standards. The AI Opportunities Action Plan will set out how we achieve these goals by securing the necessary infrastructure, talent and data access, and detailing steps to support AI adoption across the economy. The Government has secured over £24 billion worth of investment into digital and AI infrastructure at the International Investment Summit.

Artificial Intelligence (AI) is at the heart of the Government’s plan to boost economic growth, transform public services, and boost living standards. The AI Opportunities Action Plan will set out how we achieve these goals, by securing the necessary infrastructure, talent and data access, and setting out steps to support AI adoption across the economy.

In the King’s Speech we committed to introducing new, binding requirements on the handful of companies developing the most advanced AI models which will support growth and innovation by ending uncertainty for AI developers, strengthening public trust and boosting business confidence in AI adoption.