South West business expert 'not surprised' by record low of new start-ups

Concerns have been raised about the lack of new businesses being created in the UK by a business expert in the South West.

A record low number of businesses were created across the UK in the final quarter of last year, Office of National Statistics data shows.

65,450 new businesses were created across the UK between October and December - down 8.5% from the same quarter a year earlier.

Phil Smith from Business West says it's not a surprise.

"Business confidence is generally low," he said, "It's a combination of the general UK malaise, lack of growth has been talked about, and the Government is struggling to get us on the right foot."

Mr Smith added that existing companies are facing big pressures, including the higher National Insurance contributions and minimum wage increases, as well as uncertainty from the possibility of tariffs being imposed by United States President, Donald Trump.

He added that it all adds up to the general conditions for business being on the back foot.

Mr Smith also told Greatest Hits Radio that the cost of doing business has spiked alongside the cost of living.

"Just the standing cost of doing business, so rents and energy and things like that, are just increasing," he said.

He told us that the cost of living crisis may also be holding some people back from starting their new venture.

Mr Smith said he's hopeful that mortgage rates would continue to drop, following a recent cut of 0.25%, could encourage more people to start a business.

"If people have got less formal outgoings every month and they and their mortgages fall hopefully in the next year down to, I don't know, 3.5%, they might have an extra few hundreds of pounds and they might feel a bit more comfortable giving up that 40 grand job and taking a punt."

He said the business sector is a confidence driven industry, saying that it's 'animal spirits', and that when things are going well, they tend to keep going well.

Mr Smith has urged the Government to continue investing in the infrastructure which allows businesses to connect both locally and further afield.

Pre-election the current Labour Government spoke of wanting to 'get Britain building', and Mr Smith told us it's vital they do.

He said: "Yes, government needs the wealth creators, needs the businesses to pay the taxes, but businesses need government to put in place those fundamental bits of infrastructure like roads and our hospitals.

"Without that, we're stuffed!"

Mr Smith insisted that, with a bit of luck, fortunes will change for businesses and more would soon be set up.

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