The Analysis News & Opinions


‘Budget’s airline proposals must promote wider reform’


Plans to review the regulation covering the insolvency of airline companies should prompt the government to progress its work on wider reform of insolvency regulation, according to the insolvency industry’s representative body. Announcing his Budget, last month,


chancellor Philip Hammond said that the government would launch a review into consumer protection in the event of an airline or travel-company failure. This would include consideration of options to allow airlines to wind down in an orderly fashion so that they are able to conduct and finance repatriation operations without impact on the taxpayer. The move comes after the collapse of


Monarch Airlines earlier this year, where about 110,000 holidaymakers were left overseas. Monarch had reported a £291m loss in 2016. However, Adrian Hyde, president of R3,


said: “The chancellor must tie his new airline insolvency review into the government’s existing corporate insolvency reform efforts. Having announced welcome reforms in May 2016, the government has made almost no progress since. We do


not want to see an unnecessary duplication of effort. “The government’s stalled reforms would


boost the chances of business rescue, which could mean a smoother experience for passengers and higher returns to creditors. “The insolvency process can be


inconsistent for consumers where different sector regulators apply their own rules and regulations to the UK’s insolvency laws. The loss of regulatory licences upon entering insolvency, as happened with Monarch, can prevent business rescue and increase the impact of an insolvency on consumers, employees, and other stakeholders. This sort of issue can be found elsewhere, such as in the care or financial sectors, for example. “The government’s existing reforms


would potentially ‘fix’ this problem by safeguarding ‘essential


supplies’, like


operating licences, for those businesses in a rescue procedure. “The UK does have a world-class


insolvency and restructuring framework, but reform is needed to ensure we keep ahead of rapid insolvency and restructuring improvements being made in other countries. Reform would also help our


Digital debate opens


A new round-table debate will gather professionals from established and new- entrant creditors and utilities to discuss how digital technologies are bringing the way that the industry works into a new age. With digital communications now an


important focus across the industry, the debate, run by CCRMagazine in association with Zinc Group, will consider the key issues like self-serve and new communications channels and strategies. Stephen Kiely, editor of CCRMagazine,


said: “As consumers, particularly amongst the younger generations, become more used to spending a large part of their lives in the digital world, it is inevitable the credit and


December 2017 Philip Hammond


framework cope with the challenges posed by Brexit. The insolvency and restructuring framework underpins our economy, and without reform we will all lose out.” Meanwhile, also in the Budget, Mr


Hammond insisted that the government was committed to supporting competition in banking. In terms of Open Banking,


the


government had secured the commitment of the largest banks to extend Open Banking to more payment products, including credit cards. The second phase of the Nesta Open- Up Challenge would also award £2.5m to firms to develop Open Banking apps to support customer choice and fexibility Also, as agreed with the European


collections industry has had to adapt. Creditors and collectors must communicate with their customers in the channels they expect, so this debate will allow us to consider how well this message has been taken to heart, and what more is still to be done.”


www.CCRMagazine.co.uk


Commission in September 2017, the Royal Bank of Scotland would fund and deliver a £775m package of measures designed to improve competition in the UK business banking market. The Prudential Regulation Authority would seekk to make capital requirements more proportionate for eligible smaller banks.


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