External Affairs update: Spring 2023

23 May 2023

A consultation on cryptoassets, two roundtables, and a presentation at R3’s Southern Forum are just some of the things that have kept R3’s External Affairs team busy in the months of March and April…

Building political capital for our members

March saw the PPP team hold its annual President’s Lunch at the Cinnamon Club in Westminster.

This event is an opportunity to build relationships with parliamentarians, help improve understanding of the insolvency profession and its work, and correct certain misconceptions about the profession.

And this year’s was no exception: 14 MPs and Peers joined senior members from R3 to discuss a range of issues that included regulation and the future of Personal Insolvency.

We were also delighted to have Ben Chu, journalist and Economics Editor for BBC Newsnight, as our keynote speaker, who provided an insight into the trends behind the current economic picture and outlined his thoughts for improving productivity and boosting UK economic growth.

Addressing the question of MVLs

On 28th March, R3 ran a roundtable with around 15 members on MVLs and their place within the insolvency toolbox.

Companies House data shows that over the past decade MVL numbers have fluctuated from year to year, but there has been a steady overall increase in recent months.

It was clear at the roundtable that the current climate has created an opportunity for the profession to work more closely with HMRC to streamline the MVL procedure, which will benefit everyone involved. 

We’ll be looking at this issue in more detail over the coming weeks and months…

Continuing the debate on economic crime

As the Economic Crime and Corporate Transparency (ECCT) Bill continues its journey through Parliament, we are currently briefing and engaging with Peers in preparation for the Bill being debated in the Lords.

In March, we issued a news release about our concerns with the Bill, which was picked up by a range of outlets including Accountancy Age, TRI Strategy, and Lexis Nexis.

We believe that companies who have not met Companies House’s deadlines for accounts and confirmation should be entered into compulsory liquidation to deter and detect director misconduct.

Without this loophole closed, we believe the Bill will not go far enough to stop company law from being abused – and we’ll keep raising this point while the Bill goes through the House of Lords.

Presenting to the profession

R3’s Head of External Affairs Anthony Walters joined our President and CEO to present an update on R3’s work and plans for the next 12 months at the Southern Forum in Reading in March.

During his part of the presentation, Anthony outlined our activities and wins for 2022, and provided an outline of the team’s plans for the next year.

It’s been a busy 12 months for the External Affairs team, with Government planning to evolve the role of Companies House, review the profession’s regulatory framework, and review the Personal Insolvency Framework.

All of these issues will continue to be a prime focus for the team in 2023, alongside our ongoing work to promote and defend the profession in the media and local and national Government, and our Diversity and Inclusion work with the Insolvency Service.

A voice in the cryptoasset debate

April saw our PA team busy at work on our response to the Government’s ‘Future financial services regulatory regime for cryptoassets’, which is the next stage of the Government’s commitment to establish a new regulatory framework for this sector.

We organised a roundtable on this issue, to gain views from our members on the Government’s proposals, which was attended by eight members with experience in this area of the economy.

It quickly became clear that developing a regulatory framework – especially one that provides guidance for the profession on managing cryptoassets insolvencies or in insolvencies – will be a challenge given the breadth of assets in this class and the range of different insolvency regimes that cover the sectors of the economy that use them. 

This is a point we made in our response to the consultation, while also calling for companies operating in the UK to follow UK rules even if they are based in different jurisdictions, for Part 24 of the FSMA to be revised and flexibly applied to cryptoasset businesses where appropriate, and for more clarity on who the main regulator in this space will be.

Thank you to all the members who attended our round table or worked with us on our response to the consultation.

R3 in the media

Media interest in the profession and its work continues to be high.

In addition to the coverage around our concerns around the Economic Crime and Corporate Transparency Bill, our commentary on insolvency trends continues to be popular.

Our response to the February and March insolvency statistics featured in stories in the Financial Times, the Times, the Daily Mail, the Daily Express, City AM and Reuters to name a few.

And at the end of April, our comments on the Q1 insolvency statistics for England and Wales featured in stories in the I newspaper, Independent, Evening Standard, and various trade and regional publications including Credit Connect, Lexis Nexis and TRI Strategy.

In the R3 nations and regions, our comments on business trends featured in stories in a number of outlets, including pieces in the Yorkshire Post, Scottish Business News, and Business Live, among others.

Meanwhile, our comments on the annual Scotland corporate and personal insolvency statistics were covered by the BBC, the Times, the Sun, and a range of Scottish and trade publications.