The claim
“There are more small businesses in this country now than there were a year ago.”
Gordon Brown, prime minister’s questions, 17 March 2010

The background
Today at prime minister’s questions, Gordon Brown talked up the help the government has given small businesses in the recession.

As a result, he said, there are now more small businesses than there were a year ago.

This sounds like a rare bit of economic joy amid the usual doom and gloom but is it right?

The analysis
We checked the official figures with the Department of Business, Innovation and Skills. At the last count, there were 4.8 million small and medium enterprises – companies with fewer than 250 employees.

That’s an increase of 104,000 on the previous year – which would seem to back Gordon Brown up.

However, this misses a big timelag in the way the figures were compiled. That most recent figure – the 4.8 million – related to the start of 2008.

That was before the pain of the credit crunch really hit: the UK economy didn’t start to shrink until the second quarter of 2008.

And the Federation of Small Businesses estimates – based on research from analysts at BDO – that one in 60 businesses went bust in 2009.

So is the Prime Minister’s claim past its sell-by date?

A Downing Street spokeswoman said the PM was in fact referring to more recent figures from Barclays.

Based on business bank account openings and closures, Barclays estimated there were around 55,000 more businesses in the third quarter of 2009, than there were in the same period in 2008.

The verdict
We haven’t been able to get chapter and verse from Barclays on exactly what kind of businesses their data was referring to. But at time of writing, it seems the PM has a point.  If we get an update we’ll keep you informed.