Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to Begbies Traynor Group PLC's Business Health Statistics, what assessment he has made of the implications for his policies of the findings that the number of businesses in critical financial distress has risen 25 per cent year on year between the third quarter of 2021 and the third quarter of 2022.

The Government monitors a wide range of data sources in order to inform its policies, including national statistics and industry surveys. These confirm the pressures faced by SMEs from increased input costs since the invasion of Ukraine in February 2022, notably food ingredients, fertilizer and energy, as well as the ending of measures introduced during the pandemic to protect businesses from their creditors.

The SME Finance Monitor notes that the proportion of SMEs using external finance is down year-on-year, at 38% in Q2 2022 (the most recent period available) compared to 45% for the equivalent period in 2021. Of those using finance in Q2 2022, 16% were concerned about repayment, down from 19% in Q2 2021.

Measures introduced by government between the third quarter of 2021 and the third quarter of 2022 include the Energy Bill Relief Scheme, to protect small businesses from high energy costs over the winter, and the third iteration of the Recovery Loan Scheme.