Business development · 31 May 2017

Labour constituencies produce most new businesses following two-year surge

Tech investment
Just ten constituencies saw a decline in the number of operating companies
A fuse lit after the 2015 general election saw 417, 309 new businesses registerat Companies House within just two years.

The volume of new founders over the last parliamentary term added 11 per cent to the total number of operating private companies in Britain, a figure reaching just over four million.

Record-keeping software firm Inform Direct analysed Companies House data to demonstrate how each constituency performed in terms of new businesses, survival rates and net difference in volume over the two years.

Finishing with the highest number of new ventures was Keir Starmer’s Holborn and St. Pancras constituency in London. The prolific home of Labour’s shadow Brexit secretary produced a net increase of 18, 965 new businesses adding a third onto its total prior to the 2015 election.

Other London Labour constituencies kept up, particularly in Hackney South and Shoreditch which registered 3, 1193 companies.

Outside of the capital, Labour’s smaller, regional constituencies also performed well. Oldham West and Royton saw a net increase in companies of 45.5 per cent thanks to strong new business registrations.

Despite adding 1, 716 companies to its ranks throughout the two-year period, Conservative constituency Spelthorne reduced its net total of firms by -17.7 per cent. In 2017, the North Surrey seat set up a number of initiatives to promote business growth in the area.

However, in the Conservative-held South West Wiltshire, the previous general election appeared a significant catalyst for company formations. The constituency saw 9, 077 new ventures a positive shift of 231.2 per cent after local entrepreneurs responded well to the area’s small business schemes.

Overall, Labour pulled away with an average net increase of 758 new firms per constituency. The Conservatives following with 609 and the Liberal Democrats third with 317 companies.

these figures show that over the two years of the last Parliament, we saw healthy growth in the formation of new businesses which demonstrates a favourable environment for companies to thrive, said Inform Direct operations director John Korchak.

In fact, just ten out of 650 constituencies saw the total number of companies decrease. Islington South and Finsbury, the London home of shadow foreign secretary Emily Thornberry, suffered most. The seat finished the parliamentary term with just 63 per cent of its businesses still operating, losing 1, 101 firms in two years.

The entrepreneurship shown in Labour’s heartlands was noticed Korchak, who explained the significance behind the trend.

it is interesting that the highest growth was in Labour constituencies a complete reverse of the previous parliament, he pointed out.

For the two-year period, the UK scored an average business survival rate of 79 per cent. A further look at the data suggested the presence of a party leader could boost the fortunes of newly-formed companies.

Theresa May’s constituency of Maidenhead had a survival rate almost six per cent better than the average, while Tim Farron’s Westmorland and Lonsdale produced a rate of 88.4 per cent. The prime minister recently praised her local business community’s contribution to the economy, which also stands to benefit significantly fromheathrow expansion and national rail developments.

Disappointingly for Labour leader Jeremy Corbyn, business survival in his Islington North constituency scored beneath his rivals at 77.7 per cent.

To find out more about the what the conditions have been like for a fledgling company founded since 2015, Business Advice spoke to Charlie Johnson, founder and CEO of graduate job platform BrighterBox.



Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.