In Focus Collections
Reforms placed in doubt
The government should not neglect its business-rescue reform plans as it prepares for Brexit
Adrian Hyde President, R3
Plans to introduce the government’s year-old reform proposals – or any other corporate governance reforms – appeared to be absent from last month’s Queen’s Speech. As this will be the only Queen’s Speech for two years, this could put the UK economy on a less competitive footing as the country prepares for Brexit. We have long argued that action to update
the UK’s restructuring framework is needed to ensure the UK remains an international insolvency and restructuring hub post-Brexit. The plans, originally put forward in May
2016, included proposals to give directors last-chance protection from creditors in order to turn their business around before an insolvency procedure, reforms to ensure struggling businesses receive vital supplies, and the introduction of a new court-based restructuring procedure, similar to the US’s Chapter 11 bankruptcy proceedings. We have one of the world’s best insolvency
and restructuring frameworks. It attracts both businesses and investment to the UK by ensuring businesses’ financial difficulties can be resolved quickly and effectively. We welcomed the government’s reforms
when they were first proposed, and with some alterations they could make an incredibly valuable addition to the UK’s business landscape. They could make business rescues more viable and will be attractive to international companies and investors. The challenges of minority government
and the pressure that Brexit will put on the legislative timetable threaten to delay these much-needed changes. Both the government and opposition parties should back these reforms and get them onto the statute books so the UK can show it is open for business. The business-rescue reforms are a key
change, but they are not the only ones the insolvency and restructuring profession wants to see. Reform is also needed, for
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www.CCRMagazine.co.uk July 2017
The challenges of minority government and the pressure that Brexit will put on the legislative timetable threaten to delay these much-needed changes
example, to make it easier to intervene earlier to help firms with pension scheme
deficits, but it is not clear from the Queen’s Speech whether proposals from this Spring’s pension consultation still feature in the government’s plans. We welcome the inclusion in the Queen’s
Speech of plans to push ahead with consumer reforms, including the creation of a ‘Single Financial Guidance Body’. Any new body should also look at how
people in debt sort out their situation and at the stigma associated with debt and insolvency. CCR
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