Government called upon to publish Brexit insolvency forecasts

Top 10 firm Moore Stephens has called upon the government to publish its forecasts on what impact Brexit may have on UK insolvencies.

The firm asserts that it is crucial for the Department for Exiting the European Union (DExEU) to clarify potential insolvency outcomes of Brexit in order for public limited companies to do the appropriate contingency planning.

Moore Stephens contends that corporate strategies for a “hard” or “soft” Brexit will differ, and therefore companies need sufficient advance warning to prepare. They added that undertaking these estimates would be well within DExEU’s scope and they therefore have a duty to publish them to help businesses prepare for Brexit.

DExEU currently will not even confirm the existence of insolvency estimates, let alone reveal specifics about personal and business insolvency predictions under different Brexit scenarios.

With Brexit negotiations currently ongoing, it is possible that the DExEU is holding off providing forecasts until details of the final Brexit deal are a bit clearer.

Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, stressed the need for the government to be transparent, and stated: “How Brexit will impact the economy is the number one question of the next few years. The DExEU should share the calculations and data they are preparing with businesses.

“We need to know what a ‘soft landing’ and a ‘hard landing’ actually entails. Businesses expect transparency and deserve transparency.”

Expressing apprehension over the possibility that the estimates in question have not been made yet, Willmont added: “It would be surprising if these calculations over how the economy will be impacted were not made far in advance of the planned start of negotiations. If they have not been made, then that would be a concern.

“With the Insolvency Service regularly producing insolvency forecasts, it would be curious if the DExEU did not have this data.”