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In Focus Consumer Credit


Tackling the Queen’s Speech


The new government’s first Queen’s Speech set out a range of key issues for the industry – but much still needs to be addressed


Duncan Swift President, R3


As 2019 came to a close, the new government set out several important policy areas in its first Queen’s Speech.


Corporate insolvency reform We hope the government does not miss the opportunity to make progress with much- needed – and long-awaited – corporate insolvency and restructuring reforms. They do not appear to have been included in any of the planned bills, and we would urge ministers to include them in an appropriate bill as soon as possible. The insolvency and restructuring


framework underpins the economy: it helps rescue businesses and jobs, and creates the confidence to trade, lend, and invest by making sure creditors are repaid when things go wrong. We have a good framework, but the profession has been calling for new tools that will allow it to get on with its job. The government first proposed a package


of insolvency reforms in 2016, before updating them in 2018. While the proposals still require some improvement, we support the principles behind most of them. The reforms’ continued absence from


the legislative timetable is frustrating. The government really does need to make progress with these reforms if the UK is to remain one of the most attractive places in the world to do business after it leaves the European Union (EU).


Airline insolvency reform While we understand the rationale behind the government’s desire to ‘keep the fleet flying’, the feedback from our members is


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this idea is not entirely practical. While the option to do this might be there, insolvency practitioners are unlikely to make use of it as it is just too risky. Keeping planes flying after an airline


has entered an insolvency process makes them vulnerable to the local actions of their creditors. It could risk passenger and crew safety, and certainly increases the potential liability for the insolvency practitioner overseeing the process. The government’s other proposal, that


passenger repatriation be funded by the insolvent airline, could potentially make airlines less attractive to lenders and investors: there is a risk that, once repatriation costs have been paid, there will be nothing left to repay creditors what they are owed. The government’s separate plans for what


would effectively be an airline insolvency insurance fund could make a key difference here, but the details will be key.


Pension reform Tougher powers for the Pensions Regulator could be helpful, but it is vital that the government does not overlook how pensions reforms will affect the insolvency and restructuring framework. There is a risk that some of the


government’s proposals could make it harder for insolvency practitioners and restructuring experts to provide advice to struggling companies. We have also long called for changes to


make it easier to restructure a company’s pension scheme commitments. This would help companies avoid insolvency and could


www.CCRMagazine.com January 2020


The insolvency and restructuring framework underpins the economy: it helps rescue businesses and jobs, and creates the confidence to trade, lend, and invest by making sure creditors are repaid when things go wrong. We have a good framework, but the profession has been calling for new tools that will allow it to get on with its job


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