Ahead of the General Election, the major political parties are looking at ways to strengthen the insolvency process to better protect customers, suppliers and taxpayers from the fallout when a business folds.
The Conservative party has said that in the wake of the recent collapse of Thomas Cook, it will strengthen the UK’s corporate governance regime, as well as shaking up insolvency rules and the audit system to help prevent such occurrences happening again.
If elected, it will also tackle the substantial bonuses often paid to company bosses, even when a firm is in trouble, as this was a major focus of criticism in the case of Thomas Cook’s collapse.
The Labour party has said it will let struggling companies go into protective administration, so they can be sold as a going concern rather than collapsing into insolvency.
The party also says it will tackle regulatory capture and streamline regulation by creating a new Business Commission, responsive to parliamentary select committees.
In addition, it says it will legislate to establish a Business Commission, containing a Companies Commission, Finance Commission, and Enforcement Commission in a bid to close the gaps in regulation and establish and more robust and independent regulatory system.
Meanwhile, all the parties have rallied around the great British pub and have promised changes in regulation that will stop them going bust at the current rate of 18 every week, with a spokesperson for the Liberal Democrats saying that far too many people have seen their local shut its doors, which was echoed by a spokeswoman for the Green party, who said that “this steady decline has to be stopped”.
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