Businesses: Start-ups

Lord Mendelsohn Excerpts

Monday 20th November 2017 Lords Chamber

[Lord Henley]

I welcome what my noble friend has to say and I hope that noble Lords on the other side of the House take note of it.

[Lord Mendelsohn (Lab)]

My Lords, as welcome as the rise in numbers is, is it not the case that under close examination the data shows some very worrying trends? Professor Mark Hart of the Enterprise Research Centre, one of Britain’s leading academics on this matter, points out:

“Too many of these businesses do not create jobs or do anything for UK productivity”,


and that our entrenched problem is,

“turning start-ups into high growth companies”.

Can the Minister confirm what proportion or number of start-ups in these figures was for structuring purposes—holding companies, special purpose vehicles, personal service companies and partnerships—and can he set out the Government’s plans to reverse the decline in the three-year company survival rate, the falling number of high-growth companies and the proportion of start-ups that scale?

[Lord Henley]

The noble Lord asked quite a number of questions and I will restrict my answers to two. He is right to express concern about productivity. This is something that we will want to address, and I hope that he will be ready for the Statement on the industrial strategy that I hope will come out later this month. He also expressed concern about companies progressing from small to medium and medium to large. That is why we made an announcement in last year’s Autumn Statement about patient capital and why we announced a review into it. We are waiting to respond to that in due course.