A North East insolvency expert is calling on the Government to clarify its intentions for reforming the UK’s insolvency framework.
Andrew Haslam, regional chair of insolvency and restructuring trade body R3, was speaking after an expected announcement on the Government’s plans for the sector did not appear in the Queen’s Speech, marking the start of the new parliamentary session.
And he is also calling for the Government to ensure that the benefits to the insolvency process that come from EU membership are not lost when the UK leaves the EU, to ensure British creditors can retain the best chance of recovering monies owed by struggling firms or insolvent individuals, wherever their assets are in Europe.
Corporate insolvency framework reforms, which include a business rescue moratorium, a new court-based restructuring tool, and new measures to allow companies in a rescue procedure to continue to receive essential supplies, were first proposed by David Cameron’s government in 2016, before being updated last year, but there has not since been any movement on bringing them forward.
Andrew Haslam, who is also head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says: “We hope the Government does not miss the opportunity to make progress with much-needed – and long-awaited – corporate insolvency and restructuring reforms.
“While the proposals still require some improvement to reflect industry concerns, we support the principles behind most of them, but they don’t appear to have been included in any of the planned bills, and we would urge ministers to include them in an appropriate bill as soon as possible.
“The insolvency and restructuring framework underpins the economy: it helps rescue businesses and jobs, and creates the confidence to trade, lend, and invest by making sure creditors are repaid when things go wrong. We have a good framework, but the profession has been calling for new tools that will allow it to get on with its job.
“The reforms’ continued absence from the legislative timetable is frustrating. The Government really does need to make progress with these reforms if the UK is to remain one of the most attractive places in the world to do business after it leaves the EU.
“Given the importance that is being placed on maximising exports after we leave the EU, and the fact that the North East is already a net exporter, we also hope that progress is made on measures to facilitate cross-border recoveries after the UK has left the EU. This will help ensure that post-Brexit trading will continue to be underpinned by a strong framework, allowing for mutual recognition of judgments and appointments between the UK and other EU states.”