What should the Insolvency Profession and stakeholders expect from the new government?
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What should the Insolvency Profession and stakeholders expect from the new government?
Mike Pavitt, head of Corporate Restructuring & Insolvency at Paris Smith Solicitors and Council Member for the Association of Business Recovery Professionals (R3), said following the election result:
“Unlike other, higher profile areas of law where it is possible to make quite meaningful predictions about planned legislative changes and to consider the likely impact of the new government’s proposed strategies, the Labour government’s agenda for the insolvency profession is not really known at this point, at least not in detail. For no doubt sound political reasons, financial rehabilitation and the shoring up of investor confidence in British business and its reputation for well, but fairly, regulated trade (in which the work of insolvency professionals plays a key part), never seems to be a particular vote winner on the doorstep.
What we do all know, however, is that two of the new government’s five manifesto ‘missions’ revolve around kickstarting growth for all and breaking down barriers to opportunity, and there is much that the insolvency profession can do – if allowed to work in concert with the relevant authorities – to be a catalyst for these, particularly through its work with small and medium sized businesses to alleviate pressures which act as barriers to investment and the affordability of a genuine living wage, and through assistance to individuals in genuine financial distress.
Any regulatory or other legislative steps which might stabilise the rising cost of services such as insurance and key input materials would obviously help struggling businesses, whilst on the flip side any intervention which tends to restrict the effectiveness of solutions that qualified insolvency practitioner accountants and solicitors can currently deploy would likely be counterproductive. We as a profession look forward to the first opportunity to sit down with local and national government decision makers, our new MPs and recently appointed councillors and policy writers to help shape agendas which can truly deliver on these laudable goals.
In the meantime, a post-election period will often bring with it at least as much uncertainty as opportunity so we would encourage everyone to keep a close eye on policy initiatives over the coming weeks and months and to consider carefully (rather than in a knee-jerk manner) – and with the benefit of professional advice where this would be helpful – the implications of such policies for their future business and how, if at all, this needs to adapt, to model the business and prepare for contingencies which demonstrate that at all times management have discharged their duties to all stakeholders.”
If you would like to speak to an insolvency specialist, do please contact one of our Insolvency team.
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