Tory MPs call for overhaul of bankruptcy laws
Insolvency profession defends bankruptcy laws while group of MPs prepares proposals to revamp them
BATTLE LINES have been drawn between a group of conservative MPs and the insolvency profession over proposals to overhaul bankruptcy law.
The group wants to update the law so that it would be fairer to unincorporated business owners and sole traders. Their proposals will be published today by the “Free Enterprise Group of Tory MPs” led by George Eustice, David Cameron’s former spokesman, The Financial Times reports.
However, the insolvency profession has hit back that personal insolvency laws in the UK are some of the best in Europe.
Frances Coulson, (pictured) president of insolvency trade body R3, said the changes would be unnecessary and expensive.
The group proposals would see the UK adopt a US style Chapter 11 bankruptcy which gives companies breathing space from their creditors without facing liquidation.
Adam Marshall, policy director at the British Chambers of Commerce said the ideas were a “step in the right direction”.
However, KPMG restructuring partner Jim Tucker said the UK already has a mature and respected insolvency regime.
“In fact a number of European companies migrate to the UK to complete their restructuring,” he said.
Eustice hopes the changes to bankruptcy law will help overcome the fear of failure that discourages entrepreneurs.