PPP update: October 2021

15 November 2021

R3's Press, Policy and Public Affairs Team has had a busy October, with the Autumn Budget announcement, quarterly statistics, and a variety of policy debates, as well as continuing to give the profession a voice on key issues in the media...

Budget funds for HMRC

October saw the Chancellor of the Exchequer, Rishi Sunak MP, give his Autumn Budget statement to the House of Commons.

Although nothing in the Budget referred directly to insolvency, something of interest to the profession was the £900 million cash increase that has been allocated to HMRC over the next three years to ensure continued support for the taxpayer and uphold HMRC’s efforts to increase digitisation.

With its newly acquired status as a secondary preferential creditor, HMRC's support for viable restructuring proposals, as well as its effective processing of these and other cases, will be essential to helping save jobs, businesses, and maximise returns to creditors.

With this in mind, R3 will be making the case to Government for some of this budget increase to be put towards improving HMRC’s engagement in insolvency cases, building on the work we’ve carried out to date to highlight members concerns about HMRC’s recent record in this area.

Mentioned in the House of Lords

In the middle of the month, the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill began its passage through the House of Lords with its second reading debate.

R3 was mentioned by Baroness Pinnock, Liberal Democrat Spokesperson for Levelling Up, Communities and Local Government, who quoted directly from our briefing, stating that investigations into directors of dissolved companies should not come at the expense of investigations into directors of insolvent ones, and noting that R3’s “experience in this is welcome”.

Baroness Pinnock also cited our points on Compensation Orders, the need for Government to clarify if they will be used as the method of seeking redress from offending directors, and whether the legislation will be used to the benefit of all creditors.

This latter point was raised by other Peers, a number of whom highlighted the need for Government

Mentioned by a Shadow Minister

On Wednesday 27, a Statutory Instrument under The Corporate Insolvency and Governance Act 2020 ending the temporary restrictions on winding up petitions and statutory demands and introducing a new temporary debt limit for winding up petitions, was debated in the House of Commons.

Following our briefing to all MPs speaking at the debate, we were pleased to see Shadow Insolvency Minister Seema Malhotra MP echo R3’s message on the importance of businesses seeking early advice at the first signs of financial distress and mention us by name in the debate.

Other comments in the debate centred around what other support the Government is providing for struggling small businesses, and whether these regulations should be extended past their expiry date of 31 March 2022.

R3 in the media

As well as our comments on the Q3 2021 insolvency stats featuring in The Guardian and Bloomberg, R3 was featured in stories in a number of national, trade and regional publications in October.

We secured the publication of a letter from Nicky Fisher, R3’s Deputy Vice-President in The Financial Times, in response to a recent editorial on insolvency regulation.

The letter contended that, although we’re not opposed to a single regulator in principle, it would not be a silver bullet solution for concerns about insolvency regulation.

It also highlighted the strengths of our current regulatory framework, and outlined areas where it could potential evolve based on member feedback.

Our commentary on the Scotland insolvency statistics July-September 2021 also featured stories in a number of outlets – including in Scottish Legal News and Scottish Financial News – and our commentary on the monthly insolvency statistics for September was covered by Reuters, the Guardian and the Daily Mail, as well as a range of regional and specialist media outlets.