R3 Election Manifesto 2019

10 December 2019

Ahead of the upcoming General Election, R3 has set out what we believe should be the priorities vis-à-vis the UK's personal and corporate insolvency and restructuring landscape for the party which wins on 12 December. You can read R3's manifesto for the 2019 general election here.

With economic uncertainty predicted to continue into the beginning of the new decade, having a robust, responsive, and adaptable insolvency and restructuring framework will play a key role in helping to assist businesses and individuals when things get difficult financially. Our manifesto sets out a roadmap for politicians, on issues ranging from a 'breathing space' for indebted individuals to the proposed reintroduction of priority for tax debts in insolvency, with clear demands for actions and suggestions on what to do next.

R3's Press, Policy and Public Affairs team will be doing our best to ensure that - whoever sits on the Government benches post-election - progress on reform is made, and the profession's voice is listened to.

Manifesto priorities

R3 believes that the next Government should...

• Press ahead with reforms to the corporate insolvency framework

The next Government should prioritise the introduction of long-awaited improvements to the UK's corporate insolvency framework, in order to ensure that it remains internationally competitive - and that the profession has the tools available to support business rescue in the years ahead.

• Protect the value of CVAs and pre-packs to the UK economy

Any changes to the way in which CVAs and pre-packs - insolvency tools that attract significant public attention - operate, should be evidence-based and recognise their value in supporting business rescue.

• Rethink plans to tackle 'tax abuse and company insolvency'

Existing plans to give HMRC greater powers to pursue tax debts in company insolvencies need recalibrating to ensure that genuine entrepreneurs and those professionals who support business turnaround aren't unfairly targeted - which could in turn damage business rescue.

• Tackle late payment culture

The next Government should build on the efforts of the Small Business Commissioner, the Chartered Institute of Credit Management (overseeing the Prompt Payment Code) and other organisations to discourage late payment, which is a root cause of much financial distress.

• Protect access to finance and the foundations for a growing economy, by dropping plans to make HMRC a preferential creditor in insolvencies

The next Government should drop existing plans to establish HMRC as a 'preferential creditor' in insolvencies, or otherwise take steps to mitigate the threat this policy poses to returns to creditors, business rescue, and the ability of businesses to access finance.

• Reform and strengthen the powers of Companies House

The next Government should continue with plans to reform and strengthen the powers of Companies House, including the introduction of director and ultimate owner ID verification. These reforms will improve the integrity of the companies register and support the profession's fight against fraud.

• Make greater use of the insolvency framework to tackle fraud

Making greater use of the powers available to insolvency practitioners under insolvency legislation, and encouraging more effective public-private sector engagement, could significantly increase the amount of fraud that could be tackled.

• Ensure the new 'Breathing Space' for indebted individuals is fit for purpose

Plans for a Breathing Space should be amended so that sole traders with business debts above the VAT threshold are able to benefit from the policy.

• Keep the framework of insolvency regulation fit for purpose

The next Government should ensure that any changes to the framework of insolvency regulation are evidenced-based and focused on outcomes rather than how regulation is delivered.

• Ensure a joined-up approach across Government on insolvency issues

Insolvency touches every sector of the economy and a wide range of policy areas. Creditors, stakeholders, individuals and the profession would benefit from a cross-government approach to insolvency issues.

Following three years in which, quite understandably, the Brexit debate has dominated the political agenda, we believe the time has come for insolvency and restructuring issues to be given the parliamentary time and attention they need.

Hopefully the next Government agrees - regardless of who forms it.