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8th May 2015

After the Battle: Political Establishment to reign over Economic Middle Earth?


8th May 2015

After the Battle: Political Establishment to reign over Economic Middle Earth?

So who predicted that? Conservative outright majority, markets up, Nationalists whooping in the aisles, Red Ed, “I (no longer) agree with Nick”, and the other one (despite all his party’s votes across the country), all resigned. I predicted the first bit (I have witnesses), but none of the rest, not on this scale anyway. Politics, it seems, is no longer dull. But where will we be when the campaign room floors have all been swept and the champagne and tears have stopped flowing?

I honestly thought I would be able to resist the urge to jump on the “so what does the Election Result mean for…?” bandwagon. After all, such crystal ball gazing at this point is of no more value than Wednesday’s discredited opinion polls, now screwed up in the bin and forgotten. Isn’t it? That said, in my own practice area (Corporate Restructuring & Insolvency), which saw a vast number of consultations, proposed legislative changes and climb downs during the coalition years, it is just a bit too tempting to leap to a few preliminary conclusions about what the installation of a majority Conservative government, with potentially a very different agenda that we have seen hitherto, might mean for our profession.

If what we have been told about discussions in the darkened rooms which Mr Cameron will be so pleased to forget is even partly true, Lib Dems in government were acting as much as a brake on a number of changes proposed by Conservative ministers as were the Labour MPs galvanised, for example, to oppose the loss of recoverability of CFA uplifts and ATE insurance premiums in insolvency litigation. Even in coalition it seems that the outgoing government was able to bring its axe down hard on Access to Justice generally, as evidence of which we have, for example, the massive hike in Court fees just a few months ago, which has taken a good proportion of British justice out of the reach of the many. That is not to say, of course, that a majority Conservative government, especially with the relatively slim mandate it has, is just going to hack away at all the careful campaigning and groundwork done by our profession over the past 5 years, but it does mean that we will have to redouble our efforts to win the new ministers, and a very differently shaped opposition, around.

Similarly, with so much of English insolvency law now tied up with European law – see for example (follow this link) the recent ECJ ruling in the Woolworths litigation concerning the meaning and scope of an “establishment” for the purposes of collective redundancy legislation – we might well have to consider how the prospect of an in-out referendum on UK membership of the EU by the end of 2017 might affect progress towards the re-shaped EC Insolvency Regulation, and even the prospect of an independent Scotland operating insolvency laws which sit in with the acquis communautaire whilst our own move out of step. I for one hope it never comes to that, but whilst electoral majority offers short term certainty on the one hand, these greater uncertainties cannot be ignored.

Before I try to look much too far into the future, however, I will trade my crystal ball from a movie analogy which I think also offers something for business more generally, as well as for politics. This is where the ‘Middle Earth’ bit of the blog title comes in.

This election, not unlike any number of competitive struggles in business between competing groups and ideologies, put me in mind of military manoeuvres described by J R R Tolkien. Specifically, in this case, what we saw in this election, for me, was a re-run of the Battle of The Five Armies from The Hobbit. Before the gates and riches of the Kingdom of Erebor stood, at first, two opposing forces. The dwarves (who for the sake of argument only we can call the Lib Dems) were not a large force, but they held a strategic position. The mistrust between them and their tentative allies, the elves (Conservatives – go with me on this) ran deep, but they set aside their differences – briefly – to face the ravaging hordes of anarchy and destruction. The dwarves had endured a great deal of hardship already, throwing themselves on the mercy of ordinary men, women and children who held them in their power and having to make in the process promises they knew they could not keep; all to get to this point. However, they did not shirk from the fight and took it upon themselves, at almost suicidal personal cost, to dig in and form a shield wall to protect the Kingdom from the onslaught, turning their backs to the elves. The elves, meanwhile, to whose shining armour no blemish seemed to adhere, leapt over the shield wall and claimed the glory as their own, knowing that they would endure for many years until the time of men should come again, whilst the dwarves would be left to bury their dead and retreat into their mountain in lowly numbers, there to brood upon past greatness almost forgotten.

If you have not seen the film, I would urge you when doing so to give some thought as to which political parties you might ascribe to the common people who joined in the fight with purpose but with a leader who shunned the power they tried to give him, which the eagles who swooped in unbidden from the North in vast numbers raining destruction from the sky and flew off almost as quickly, and which the lumbering trolls who led a large but unruly army but knocked themselves out whilst trying to head-butt a breach into the city walls.

I very much hope that the insolvency and legal professions learn from the mistakes of the dwarves, do not turn their back on the elves but work with them cautiously, and continue to read the tide of battle well, positioning themselves with cautious and economical movements to ensure not only our own survival but also improvements in both fortune and justice for the people of our (United) Kingdom!

My apologies to anyone who has now had more than enough of election analysis (or fantasy films) already; please be assured I shall endeavour to get back to more mundane legal commentary next time. In the meantime, should you wish to discuss any of the related issues in person, please do contact me.

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