PPP update: September 2021

14 October 2021

A new policy announcement, a Budget submission, a roundtable event and an All-Party Parliamentary Group report on insolvency regulation – as well as continued increased media interest in the profession and its work – made September a busy month for R3’s Press, Policy and Public Affairs Team…

Temporary CIG Act measures end

On September 9, the Government announced it would lift its temporary insolvency measures and introduce a temporary debt limit for winding up petitions, which would increase the temporary debt threshold to £10,000 until 31 March 2022.

In our response to the announcement, which featured in stories in the Daily Telegraph and the Financial Times, we highlighted that the new threshold would provide a balance between preventing businesses facing the threat of winding up from creditors while also allowing those who are owed significant sums of money to take the action they need.

We also briefed parliamentarians ahead of the committee debate on the new legislation, and were delighted to see Shadow Insolvency Minister Seema Malhotra MP ask the Government what it intends to do to encourage distressed businesses to seek advice about situation and their options for resolving it.

APPG report into insolvency regulation

In the middle of September, the All-Party Parliamentary Group (APPG) on Fair Business Banking published its report on insolvency regulation, which was the result of its inquiry from earlier this year.

Its recommendations included the introduction of a single regulator along with an ombudsman, as well as placing the Code of Ethics on a statutory footing.

While some aspects of the recommendations represent interesting additions to the debate on the future of insolvency regulation, elements of the report showed a lack of understanding of the framework, the difficult circumstances in which the insolvency profession works, and the critical role it plays in business and the economy.

In our response to the report’s publication, which featured in a story in the Times, we highlighted the critical work carried out by the profession and members of it in rescuing businesses and preserving jobs, while our blog on the APPG’s report provides an analysis of their findings and recommendations, as well as our views on the future of the regulation debate.  

R3’s CEO Caroline Sumner spoke at a parliamentary roundtable discussion to mark the launch of the report, highlighting the need for a full debate on the future of regulation in the profession, and met members of the APPG and representatives from other industries and professions at the launch event at the House of Commons. 

Exploring solutions to pensions fraud issues

September also saw us hold a roundtable discussion that aimed to identify and address concerns about the increases in pensions fraud cases, an event which saw us bring together members of the profession and pensions providers with stakeholders from the worlds of fraud prevention and law enforcement.

Improved data sharing and intelligence on fraud were highlighted as being critical to better tackling all types of fraud, including pensions fraud. Individuals who commit fraud will often be repeat offenders, so data sharing to identify a single fraudulent individual could help to prevent many frauds.

It was suggested that a helpful addition to the framework would be a central database allowing IPs to easily establish every occupational pension scheme associated with an insolvent company. This is an idea we’ll be looking to develop further in the coming months.

What R3 wants from the Chancellor

Ahead of the Chancellor’s Autumn Budget and Spending Review this month, the PPP Team worked on R3’s submission, which outlines what we would like to see the Chancellor introduce in his speech.

We called on the Government to introduce two policies: a strategy to encourage directors to seek early advice, and for HMRC’s recently announced change in approach to supporting viable restructuring proposals to be maintained and strengthened.

Government promotion of the need for, and the benefits of, seeking early advice during times of financial distress will help to encourage many viable businesses to secure the advice and support they need to survive in the aftermath of the lockdown – saving jobs, businesses, and maximising returns to creditors in the process.

And HMRC has a vital role to play in this – especially in light of its recently acquired secondary preferential creditor status, a change which means HMRC's support for viable restructuring proposals will be particularly important.

This support has not been forthcoming historically, but HMRC has recently signalled a welcome change of towards supporting the rescue of viable businesses. Government support for maintaining this, and encouraging HMRC to accept or consider restructuring proposals where it will not receive the full return on its debt as a preferential creditor will be critical as a means of helping more companies to resolve their financial issues.

R3 in the media

In addition to being quoted in an article in the Times about the APPG report into insolvency regulation, R3 has featured in a number of stories in the regional, national and trade media this month. 

R3 Vice President Christina Fitzgerald was quoted in pieces about the new temporary insolvency measures were featured in stories in the Financial Times and the Daily Telegraph, while President Colin Haig’s views on the August insolvency statistics were featured in articles in the Times, Daily Telegraph, Daily Express and the Guardian, as well as a range of regional and specialist media.

Our comments on the end of the furlough scheme and the need for businesses to seek early advice also featured in a variety of regional and specialist media outlets throughout September.