PPP update: November 2022

18 December 2022

The festive period is fast approaching, but work hasn’t slowed down for R3’s Press, Policy and Public Affair’s team, with ongoing engagement with the Government on economic crime, a presentation to the Debt and Personal Finance APPG and continuing to give the profession a voice on key issues in the media.

Mentions in the House of Commons

Welcome reforms to Companies House are on their way under the new Economic Crime and Corporate Transparency (ECCT) Bill, and in November the Bill finished its Committee Stage in the House of Commons.

We were pleased to see a number of our concerns with the Bill raised by MPs during debates last month, with R3 mentioned by name on four occasions.

On Tuesday 8^th November, Shadow Insolvency Minister Seema Malhotra MP mentioned R3 as she spoke on director disqualification as a poor deterrent to fraudulent directors. And in the Tenth sitting on the same day, Malhotra read from our written evidence directly, raising concerns around Company House’s automatic strike-off process in relation to economic crime.

Although the amendment was ultimately withdrawn, the Minister Kevin Hollinrake MP agreed that the issue should be considered further to see what might be done to help insolvency practitioners access information in a narrower set of circumstances.

Finally, R3 was briefly mentioned once more at the end of the month by Seema Malhotra during the seventeenth siting of the Bill, in relation once again to director disqualification.

Amendment tabled and debated

In addition to our Parliamentary mentions, we were also pleased to see an amendment to the ECCT Bill tabled based on our recommendations.

Seema Malhotra MP highlighted that disqualification does not deter rogue directors who often go on to commit repeat frauds and that instead, holding directors to account for the assets they have misappropriated by putting the company through an insolvency process would be a much stronger deterrent.

As it stands, creditors and liquidators can apply for a dissolved company to be restored, but this must be done through the court, which can be time-consuming and costly.

The amendment tabled would: “expand the categories of persons who can use the administrative route by allowing former creditors and former liquidators to apply to the registrar for a dissolved company to be restored to the register. At present, only former directors or members of the company can apply to the registrar.”

The Minister for Enterprise, Markets and Small Business Kevin Hollinrake MP responded that while Government feels the court is best placed to handle creditors, there may be instances where a liquidator’s interests in restoring a company might be in the wider interest of others, including potential creditors, and that “there may be a case for giving them access to the less cumbersome administrative process”.

Although the amendment was ultimately withdrawn, the Minister agreed that the issue should be considered further to see what might be done to help insolvency practitioners access information in a narrower set of circumstances.

APPG appearance

At the end of the month, R3 CEO Caroline Sumner was invited to speak at the Debt and Personal Finance APPG to express our views on the recently published personal insolvency framework call for evidence.

Chaired by Yvonne Fovargue MP and representatives from the Insolvency Service, the meeting saw stakeholders from across the profession, including charities and regulatory bodies, come together to discuss the call for evidence published by the Government in July.

Caroline shared the key views and concerns expressed in our call for evidence response, and we were encouraged to see most of our points echoed by the other speakers – particularly around cost of entry to certain processes and the lack of freedom of movement between the processes should a debtors circumstances change.

The Insolvency Service are now working through feedback and evidence presented in the 64 call for evidence responses to understand how best we can move forward to establish a framework that strikes the right balance between supporting both debtors and creditors.

R3 in the media

In November, R3 Chair for Northern Ireland James Neill was interviewed for a piece in Ulster Business, speaking on late payment data and other insolvency trends in Northern Ireland.

Our comments on the monthly insolvency statistics featured in the national media, picking up coverage including the Guardian, Bloomberg, and the Times, as well as a number of trade and regional publications including Accounting Web, Credit Connect and Business Matters.

Our comments on local business trends continues to be popular with the regional media, with a story on a rise in overdue invoices in Scotland featuring in articles in Insider, Scottish Business News and Scottish Financial News and our comments on the increase in new Yorkshire business start-ups picking up coverage in Business Up North and Yorkshire Insider.