R3’s Press, Policy and Public Affairs Update July 2020
05 August 2020
The big news for the UK's insolvency and restructuring profession in July was undoubtedly the passage of the Finance Act, containing the legislation to grant secondary preferential status to HMRC for some tax debts as of 1 December. R3 has steadfastly opposed the move to place the taxman above many other types of creditor ever since it was first announced in late 2018 – our post here sets out the wide-ranging campaign that we undertook to try and get the Government to change its mind.
Throughout the Act's legislative journey, we highlighted the potential damage the proposals would do to floating charge funding, business rescue and the economy in the UK. We also made a point of making parliamentarians aware of the damage Crown Preference would do to businesses, jobs and the economy as part of our work on the Corporate Insolvency and Governance (CIG) Act as it made its way towards achieving Royal Assent, as the business rescue culture the Government is trying to build through it is undermined, we believe, by the proposal to restore Crown Preference.
As a result of our briefings and discussions with MPs and Peers, the issue of Crown Preference - and the profession's opposition to it - was raised more than 25 times in debates in both Houses, and Alison Thewliss MP tabled amendments to the Finance Bill which aimed to mitigate the impact of the plans to change HMRC's creditor status.
Sadly these amendments weren't adopted, but R3 will continue to campaign against Crown Preference, and highlight the potential consequences of the policy for businesses, jobs and the economy as the UK attempts to emerge from the COVID-19 pandemic.
July is traditionally a fairly quiet month for press and media interest, but R3's press team nonetheless were kept busy with journalist enquiries, issuing press releases, and responding to breaking news stories.
R3 spokespeople briefed journalists from outlets including The Times, the Independent, and the New York Times, while R3 was mentioned in The Times (on the topic of pre-pack administrations); the Press Association and Dow Jones (for our commentary on the monthly and quarterly insolvency statistics); and The i and the Press Association (for our press release explaining the results of our member survey looking into the effect of the pandemic on personal insolvency). Our survey press release on the outlook for corporate insolvency practitioners also received wide pick-up in the regional and trade press, as did our comments on Crown Preference, and on the monthly and quarterly insolvency statistics.
Value of the Profession survey
We launched our Value of the Profession survey in July - our thanks to all members who have already filled it in on behalf of their practices. The survey is still open and your responses are vital for its success. If you work in personal and corporate insolvency and/or restructuring, or for a law firm providing insolvency and restructuring advice, and have not yet completed the survey, we would urge you to do so - the more responses we get, the better, and the more useful our report on the contribution the insolvency and restructuring profession makes to the UK economy will be. (If you work in one of the aforementioned areas and have not received a survey link, please email us.)
We are very much looking forward to showcasing the final report, which will be indispensable as an educational tool for our work to promote the profession.
R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.