11% rise in North business start-ups; in association with RBS.

Byline: Peter McCusker

FURTHER evidence of the rise of the North East economy emerged yesterday with figures showing 15,600 new businesses were launched in 2007 - the fastest rate of growth in the UK.

The region saw an 11% rise in business start-ups, but the number was still far lower than other parts of the UK. So while the North East keeps its poor record for business creation, the new figures have been welcomed as a sign it is catching up.

Ross Smith, North East Chamber of Commerce head of policy, said: "We have seen for some time now that the North East is creating an ever more entrepreneurial culture and these figures bear that out.

"The regional economy has strengthened considerably in recent years and it is extremely encouraging to see that more and more people want to start their own businesses.

"It is important now that we back all these new businesses to grow and to become strong players in the economy in the future."

The figures from Barclays Bank are based on the number of new business accounts opened in the last calendar year and, because they capture businesses of all sizes, are higher than many other surveys which measure the number of VAT-registered firms. The smallest firms do not have a large enough turnover to pay VAT.

The 14,000 start-ups in 2006 rose last year by 11% to 15,600. The West Midlands saw a similar 11% growth to 45,800 start-ups. Our nearest neighbours Yorkshire saw business activity down 1% to 35,100 start-ups in 2007.

Carole Beverley, chief executive of the Entrepreneurs' Forum, said: "All our surveys show the North East economy is buoyant. There is now tremendous support available from Business Link North East and the Entrepreneurs Forum for businesses to start up and grow. Businesses do no longer have to do it on their own."

The Journal revealed last year how the number of businesses in the region at 46,000, is around 30,000 fewer than it should be.

One NorthEast has outlined plans to help encourage new business start-ups with its aim to see the total business stock of the region increase by at least 18,500 by 2016.

One NorthEast's head of business, enterprise and skills, Tim Pain, said: "The figures paint an encouraging picture, particularly as the growth rate in North East England is one of the highest in the country.

"There's no doubt that the next year is going to be tough and we still have a way to go to meet the target for new VAT-registered businesses, but these figures reflect the fact that progress is being made."

Alastair MacColl, chief executive for Business Link North East, said: "Clearly these figures represent just one measure of enterprise, but it reflects our own confidence in the range of start-up businesses in the region."

VAT MEASURE ONE NorthEast and the Government use the number of VAT-registered companies in the UK as their measure of business activity.

The latest figures available for 2006 showed 4,630 firms registered for VAT in the region in 2006. A total of 3,495 businesses folded in the year leaving a net gain of 1,155.

The figures used by Barclays refer to the number of new business accounts opened across the region in 2007 and do not show the number of business accounts closed. For a business to become VAT registered, it has to have a turnover in excess of pounds 62,000.

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