New government figures show there was a net increase of more than 20,000 in the number of small companies operating in the UK last year.

The growth in small and medium sized enterprises (SMEs) is the equivalent of over 60 new firms starting every day, according to the Department for Trade and Industry's Small Business Service.

Forum Response: Federation of Small Businesses

A spokesman for the FSB told ePolitix.com: "We are encouraged by the number of SMEs starting up. However, the key point is the survival rate. Three out five small businesses close within five years and more work needs to he done to address this problem."

Forum Response: British Retail Consortium

Mark Bradshaw, deputy director general of the British Retail Consortium, told ePolitix.com: "Retail businesses are a large, vibrant part of the small business sector and retail SMEs not only play a key role within the economy but an essential part of the retail mix that consumers can chose from.

"Whilst these figures are good news, SME retailers still face a number of challenges - amongst them the burden of regulation, retail crime and proof of age - where more government action is needed to ensure that they can continue to increase their productivity and play an active role in the economic and social fabric of their communities.

"The BRC will continue to work with our trade association members to ensure that the government takes the action needed to create a positive climate for continuing SME retail growth."

Forum Response: Institute of Directors

Richard Wilson, business policy executive at the IoD, told ePolitix.com:

"The IoD welcomes the figures released by the government showing an increase in the business population in the UK. However, the government's figures are at odds with data produced by some of the major banks, whichshow a decline in the overall stock of businesses in 2001 (see Finance for Small Firms - a Ninth Report (Bank of England, April 2002), pp. 7-8).

"If the government is intent on fostering an increase in the business population it needs to reduce the tax and regulatory burden in order to give individuals an incentive to set up enterprises and to expand their firms."