The Rt Hon Harriet Harman QC MP on bankruptcy during Prime Minister's Questions this week

Whilst covering Dr Gordon Brown MP this week at Prime Minister's Questions, the Rt Hon Harriet Harman QC MP strayed onto the topic of bankruptcy. In response to a statement by the Rt Hon William Hague MP on the the US bank bailout attempts, Ms Harman noted (Hansard, 27 Jan 2010 : Column 804):
"When the right hon. Gentleman was in government and sitting in the Cabinet, there were double the number of repossessions; when he was in government, there were three times as many bankruptcies; and when he was in government in a recession, there were four times as many job losses. I have to say that his reversing is even worse than mine. We are building up Britain, and the Conservatives are trying to talk it down."
Is this bankruptcy claim true? To assess this we must revisit Mr Hague's ministerial career. He was last in power in 1997. Before his party was ousted he held the following ministerial positions:
  • Parliamentary Private Secretary to Norman Lamont, Chancellor of the Exchequer, 1990-93
  • Joint Parliamentary Under-Secretary of State at the DSS, 1993-94
  • Minister of State for Social Security and Disabled People, 1994-95
  • Secretary of State for Wales, July 1995 – May 1997
So Mr Hague held ministerial office between 1990 and 1997, a period of seven years. The table included to the right, which includes figures drawn from the Insolvency Service statistics database, notes that the total number of bankruptcies over that period per year was:
  • 1990: 12,058
  • 1991: 22,632
  • 1992: 32,106
  • 1993: 31,106
  • 1994: 25,634
  • 1995: 21,933
  • 1996: 21,803
  • 1997: 19,892
The total figure for bankruptcies in 2008 (the last total year data available) was 67,428. Even in Mr Hague's worst bankruptcy year his administration achieved a relatively lowly 32,106.That is half Harriet's figure for her peak year to date. Even a brief view of the statistics reveals that Ms Harman is clearly wrong. How on earth can it be the case that the Leader of the House of Commons, whilst sanding in for the Prime Minister, can cite statistics in this manner?

Picture Credit: Insolvency Service.


Adrian Walters said…
Probably worth checking the comparable figures for liquidations. Being charitable it could be that HH was referring to bankruptcies in the US sense, i.e. including corporates. Even so, off the top of my head, I can't imagine there will be any radical difference for the figures for liquidations during the last recession and during this one. Best wishes.
kingstonpeople said…
HH is bad at basic statistics. We all know this from the rubbish she sprouted last year about the difference in working men and women's wages. Therefore anything she says involving figures should be ignored.
Anonymous said…
This comment was not meant to be on bankruptcies but instead on company liquidations. Insolvency Service data gives a liquidation rate in the early nineties of 2.7% [liquidations against active companies] whereas the latest figures on the insolvency service website has the rate at 0.9%