Tag Archives: business

A Case for British Chapter 11

It takes many years to develop a business and for it to grow. Enterprises employ millions of people who support their families and are the building blocks of our national wealth. Should we not be more supportive, as a society, when a company fails?

Since 2000, the number of businesses in the UK has increased each year, by 3% on average. In 2016, there were 2.2 million more businesses than in 2000, an increase of 64% over the whole period. Businesses actual employment of people has fallen since 2000 from around a third, to a quarter. This decline is due to the growth in self-employment. The total number of company’s insolvencies from 2013 to 2016 was just over 70,000 (Office of National Statistics).

In most countries, there are two tests for bankruptcy:

  • A company that cannot pay its debts because there is not enough money in the bank (this would tip a company in the UK into liquidation);
  • A company with liabilities that exceed its assets (the company can avoid liquidation if it can negotiate a deal with its creditors).

The UK’s insolvency system, on the whole, returns more money to creditors (as it’s more creditor centric) and is faster and cheaper than the United States, for example. However, a common complaint among struggling firms under the threat of insolvency is that the time for decision-making is too short. Critics believe firms need a longer period to consider their options and take decisions without jeopardising the company’s supply chain and increasing pressure on their cash flow, both of which will accelerate the commencement of insolvency. Therefore, there is a desire to ask the government to copy the Chapter 11 system in the United States, where companies are allowed 90 days’ grace.

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Vince Cable on Carillion: Shareholders are going to have to take a hit

Vince has been speaking about the Carillion crisis. The FT reports:

The Lib Dem leader’s intervention suggests the crisis at Carillion is about to become highly political; Sir Vince claimed last November that the government was “feeding” contracts to the company to try to keep it alive.

On Friday lenders to Carillion dismissed the company’s rescue plan and urged Downing Street to intervene.

But ministers will face fierce political criticism if they have to bailout a company which continued to receive major public contracts — including on the HS2 high speed rail line — after it issued a profit warning last July.

The government would also have to comply with EU state aid rules, but Sir Vince said that in the first instance the private sector should take a hit.

“The shareholders of the company are going to have to take a loss,” he told the BBC. “The creditors, the big banks who hold most of this debt, will have to write off some of it, perhaps replace some of it with shares.” 

You can watch his BBC interview here.

He’d earlier said on Twitter:

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Vince Cable: Lib Dems are the natural party of business

This morning, Vince Cable launched the Lib Dem Business and Entrepreneurs’ Network. It already has 80 leading figures from the business community, including angel investor Andrew Dixon and Chair of Allied Irish Banks Richard Pym.

He explained why the Lib Dems were the natural party of business:

And showed how the Government is letting business down:

Vince added:

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The Press Pack: A round-up of Lib Dem media comments – 22 August 2017

Here’s a roundup of  media comments made by Lib Dem parliamentarians and spokespeople today.

GP numbers

Norman Lamb slammed the Government for failing to deliver more GPs:

The government’s promise to recruit 5,000 more GPs by 2020 lies in tatters, with fewer GPs now than when this pledge was first made.

“The pitiful increase we have seen in recent months is nowhere near enough to cope with rising patient demand.

“This failure to recruit enough doctors will inevitably have a damaging impact on the ability of patients to access the healthcare they need.

“We are already close to breaking point, with people in many parts of the country struggling to get appointments with their GP.

“More doctors are urgently needed to guarantee a fully-staffed NHS that provides everyone with the care they need.

Swinson criticises UK support for Trump Afghanistan move

The government didn’t really get round to condemning Donald Trump’s appalling remarks in the wake of Charlottesville, but they were quick off the mark to support him sending more troops to Afghanistan. Jo Swinson said:

For once, sense seems to have prevailed in the White House.

“But to succeed in Afghanistan will require winning the hearts and minds of its people and working closely with neighbouring countries.

“On that front, Donald Trump has already done untold damage through his proposed refugee ban, Islamophobic comments and cack-handed approach to foreign affairs.

“The government’s rapid statement of support for Trump today contrasts with its failure to swiftly condemn his divisive views and actions in the past.

“Simply pouring more troops into Afghanistan will not work without a broader strategy involving careful diplomacy and redoubled efforts to build a stable government.”

Even Brussels must be tired of this waffle

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Cable: Tories and Labour have turned their backs on the economy and business

Vince Cable makes a major intervention in the election campaign today with a speech on the economy and Brexit. He is not going to mince his words.

He will

  • Accuse both Labour and the Conservatives of adopting a Brexit strategy almost designed to inflict maximum economic damage by rejecting membership of the single market and customs union, as well as other benefits of the EU
  • Warn that the economic storm clouds are already gathering once more from rising inflation, falling real wages and rising personal debt to slowing spending and growth
  • Highlight the Liberal Democrats’ positive economic plan, including boosting spending while still achieving a surplus on the current budget
  • State that “under Jeremy Corbyn, the Labour leadership’s model for economic management is the bankrupt, hyper-inflationary Venezuela.”

Here’s a flavour of what he’s going to say.

If we crash out of the single market and customs union and revert to World Trade Organisation terms, respected independent estimates suggest that our trade will slump by almost a third by 2030. Far from turning Britain into a centre for exports, the main thing we would export under Theresa May would be jobs.

Labour’s plans for a spending spree funded by taxing the rich and corporations have been described by the IFS as wholly unrealistic, and will certainly scare off the investment and talent that are fundamental to our global economy. The May-Farage extreme Brexit that Labour voted for will drive out high-earners and leading international companies, leaving lower tax receipts for public spending.

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Business leaders: Only Lib Dems are speaking for business and the people

In a letter, more than 50 business leaders, including Nicola Horlick and the founders of EBookers and Innocent Drinks, have said that they will be voting Liberal Democrat because of our stance on Brexit.

From the Times (£)

The 53 signatories who say they intend to vote Lib Dem include senior players in the investment and IT sectors, two industries that could be hit by a poor Brexit deal. They represent small and medium-sized businesses (SMEs) rather than FTSE 100 companies.

“The Conservatives’ failure to even mention a transitional deal threatens Britain’s status as one of the best countries in the world with which to do business,” the letter reads. “While we may not have voted Liberal Democrat in the past and we may not agree with the party on all issues, they are now the only party speaking for business and the majority of Britons on the key issue at this election.”

Richard Reed, the co-founder of Innocent Drinks and board member of Britain Stronger in Europe, Dinesh Dhamija, the founder of the Ebookers travel site and the businesswoman Nicola Horlick are among the signatories.

In response, Vince Cable said:

The Liberal Democrats now have support from a large number of serious figures in the business community, showing that we are rapidly emerging as the party of business, both big and small.

Theresa May’s determination to take us out of the single market would devastate the financial sector, while taking us out of the customs union would cause incalculable disruption to manufacturing .

Theresa May herself warned of the Brexit dangers to our exports in a speech at Goldman Sachs. Since then she has taken on the agenda of Nigel Farage, who has understandably declared himself delighted with her.

That is scary. It is vital that the next parliament contains enough Liberal Democrat voices to argue for Britain’s future in the world’s most lucrative single market. The more Liberal Democrat MPs, the better the deal we can secure on Europe.

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Rennie: We need to keep access to EU markets easy for business

Willie Rennie argues today that we need to make sure that we keep access to EU markets easy for business. We don’t want to be putting borders up, creating more red tape, which could cause problems and cut jobs. He says:

At the heart of the argument for remaining in Europe is a single market, making trade easier, and allowing businesses based on innovation and excellence to thrive is going to underpin our future success.

That was the argument that won the independence referendum and is just as powerful now.

Three million jobs in Britain depend on Europe. We need to make Europe easy for business.

As part of Europe we are part of an economic market worth trillions. There are 500 million customers.

It means that a Scottish company that is good and efficient at its job can expand across the continent.

Easy access to 500 million customers is worth millions of jobs in Britain.

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