R3’s Press, Policy and Public Affairs update, January 2021
05 February 2021
It was an eventful 2020 for the insolvency and restructuring profession and for R3's Press, Policy and Public Affairs team - and if the first month of the new year is any indication, the pace does not look set to slow in 2021.
In December, three linked consultations into the operations of Companies House were published, into implementing the ban on corporate directors, the powers of the registrar, and improving the quality and value of financial information on the UK companies register.
We have responded to the consultations, noting that we are disappointed that the recommendations we made in response to the earlier Companies House consultation have not been included in the new round of documents, something which we hope the Government will correct in due course. Enhancing the role played by Companies House in tackling fraud, and allowing greater access to insolvency practitioners in the course of their investigations into suspected financial wrongdoing, would be good news for all honest traders.
The Government announced in January that it is seeking views on changes to the eligibility criteria for Debt Relief Orders (DROs), in the form of another consultation, closing towards the end of February. The questions asked by the Insolvency Service are fairly straightforward: most importantly, whether the levels of maximum debt (currently £20,000), asset (currently £1,000, not including a car, which must not separately exceed £1,000) and surplus income (currently £50 a month) of anyone seeking to enter a DRO should be raised to £30,000, £2,000 (although any car must still be worth under £1,000), and £100 respectively.
Our view is that the thresholds should be increased, in order to allow more people in debt to access a DRO, and this is something we have long called for (see, for example, our Personal Insolvency Landscape paper from 2014).
As part of our continuing Back to Business UK campaign, R3 South West and Wales Chair Philip Winterborne gave a webinar on "how restructuring and insolvency procedures can help with financial recovery, and how to seek early advice when experiencing financial distress" to members of the Institute of Directors in the South West and Wales.
We hope to carry on facilitating similar webinars across the country, in order to get the message about the importance of seeking reputable and qualified advice if your business encounters difficulties, especially during this turbulent and unpredictable time.
We also held meetings with the British Property Federation, the London Chamber of Commerce, and ABTA - The Travel Association, in order to discuss areas of mutual interest in insolvency and restructuring.
R3 and the media
January began with a clutch of national media coverage on various topics. The Times quoted R3 President Colin Haig in a piece on the outlook for businesses in 2021, calling for a more creative approach for businesses with high debt levels. We commented on a rise in MVL numbers in the Financial Times, and Deputy VP Nicky Fisher talked to the Times on the same topic, while Colin was once again featured in the Sunday Times, in an article about the challenges for SMEs in the year ahead.
Our statement on the monthly insolvency statistics for England and Wales was picked up by the Times and the Independent, while Colin Haig's comments on the Q4 2020 England and Wales insolvency statistics were featured in the Times, the Sun, and the Press Association, and in many regional news outlets.
The comments from Tim Cooper, Chair of R3 in Scotland, on the 2020 insolvency statistics for Scotland were covered in the Herald, and in the trade press, while the launch of the R3 consumer debt advice resource was written up in a range of regional press titles including the Yorkshire Post and the Dorset Echo.
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