Calls being made for Wales specific data after insolvencies spiral in ‘England and Wales’

Calls are being made for Wales specific data to be released after the news that companies falling into insolvency in Wales and England has surged to its highest since 2009.

The Government data revealed the number of company insolvencies registered in 2022 leapt by 57% to 22,109 from the previous year.

The Welsh Liberal Democrats are calling for new statistics to be released separating the data for England and Wales, in order to fully understand the picture across Wales, which has a higher dependency on small and medium-sized businesses for employment than other parts of the UK.

Welsh Liberal Democrat Leader Jane Dodds said: “These figures show that we are in the middle of a full-blown financial crisis and that the Conservative Party is asleep at the wheel.

“Each one of the businesses isn’t just another statistic, but a valued part of a local community. It’s your local pub, restaurant or shop.

“This Conservative Government has an economic record which can only be described as shambolic. They have not an ounce of credibility left on the economy and business.

“Instead of helping businesses, the Conservatives have laden them with red tape and plan to slash energy support in April, a move that will surely lead to more closures.

“The Government urgently needs to get a grip and offer businesses with support. Once a local business is gone, the benefit that business brings to the local economy and the employment it generates is hard to replace.

Acceleration

The rise across the two nations was partly driven by the end of coronavirus support measures for firms by the Government during the pandemic as well as weaker consumer demand.

The increase was also partially linked to the higher number of companies operating in total during the year.

The Insolvency Service reported the rise was driven by the highest number of Creditors’ Voluntary Liquidations since records began in 1960.

Administrations also increased against 2021 but were lower than pre-pandemic levels.

The final quarter of 2022 showed that insolvencies continued to accelerate during the year, as they increased by 7% to 5,995 compared with the previous three-month period.

Christina Fitzgerald, president of insolvency and restructuring trade body R3 and partner at Edwin Coe LLP, said: “2022 was the year the insolvency dam burst.

“After nearly three years of trading through a pandemic, and in the face of the end of Government support, rising costs and a cost-of-living crisis, many directors simply ran out of road this year and chose to close their businesses before the choice was taken away from them.

“Alongside this, the end of the Government’s temporary legislation on winding-up orders has left creditors free to pursue unpaid debts, which is why compulsory liquidation numbers are at their highest in three years.”