Archive | August, 2012

Toby House of Commons

Shadow Minister discovers how Government rules frustrate attempts to improve ‘Dodgy Director’ disqualification process

Work on a new online form to report delinquent company directors scrapped by Insolvency Service, despite 82% of the profession supporting its introduction

Last year the insolvency practitioner’s professional body, R3, set up a working group to design a new online form which would save money, contain better information, and allow the Insolvency Service to access the information they need more quickly.

This work was recently cancelled as the working group were told by BIS that any redesign of the form would not be allowed under the moratorium on new regulation for micro-businesses – this is despite that fact that 82 per cent of Insolvency Practitioners want to change to an electronic system, according to R3’s survey. Indeed, the survey further reveals that 80% of micro-businesses within the insolvency profession, the very businesses the moratorium purports to protect in this case, also support the change.

Toby House of CommonsToby Perkins commented:

“The government’s approach to regulation means that even sensible changes, supported by the overwhelming majority of Insolvency Practitioners – including those who are ‘micro businesses’ –are thwarted.  This would have led to a more cost-effective service for the public.  You couldn’t make it up.”

R3 President Lee Manning added:

“We were disappointed when the Insolvency Service called time on our joint work on an online D1 form, and the strength of feeling within the profession is shared by four out of five (82%) of our members.

“The micro-business moratorium is designed to protect these businesses from the burden of new regulation. The introduction of a simplified online form would, though, actually reduce the administrative burden on them, as well as helping to more effectively tackle delinquent directors. An online form is good common sense in this day and age.

Protecting the wider business community from unscrupulous company directors is essential in maintaining public confidence.”

Outdated methods, huge costs

An investigation by Labour’s Shadow Small Business Minister, Toby Perkins MP, has also revealed how waste in the Insolvency Service (part of the Department of Business, Innovation and Skills) is costing the tax payer and letting down honest, hard-working businesses across the country.

The Insolvency Service have been found to be using out-dated and costly methods of collecting information on delinquent directors, which severely compromises their ability to disqualify those who have acted dishonestly.

When an Insolvency Practitioner (IP) is appointed to a case they have a legal duty to file a report on the conduct of the director.  If they believe the director to be guilty they must complete a D1 form and return it to the Insolvency Service.

The form used is huge and has not been re-designed in over twenty years.  It fills a box file and must be filled in by hand.  In addition to huge unnecessary printing costs and the additional time it takes to fill in forms by hand the Insolvency Service pays for motorcycle couriers to deliver these forms to the practitioners!

In answer to Parliamentary Question tabled by Mr Perkins, the Government admitted that they do not keep any records on this and have no idea how much these couriers cost.

Toby Perkins explained:

“It’s bizarre that in the age of wireless internet and online forms the Government is throwing away taxpayers money by delivering huge files by courier bike to then be filled in by hand.  This out-dated practice is deflecting scarce resources from what the Insolvency Service should be focussing on: disqualifying unscrupulous company directors.

“The government is letting down the public and honest hard-working businesses when it gets this wrong.  The government itself estimates that for every disqualified director there is an £88,000 benefit to the economy, in terms of the economic damage that would have otherwise been caused to honest small businesses.  But the number of reported directors who are disqualified has dropped to just 21% this year – down from 27% for 2010-11 and from 45% ten years ago.

“Anything that impacts on the Insolvency Service’s ability to go after unscrupulous directors is bad news for honest small businesses, who are the lifeblood of the British economy.”

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Toby Perkins with the bee Inspired breakfast

Chesterfield MP Creates Buzz at the Bee Breakfast

 

Toby Perkins with Volenteers at the Chesterfield bee Breakfast

Toby Perkins celebrated the contribution bees make to the UK economy as he joined volunteers from Friends of the Earth at the Chesterfield bee breakfast on Wednesday.

Toby heard from volunteers and experts about the crucial role that bees play in maintaining the ecosystem and supporting the economy before tucking in to a bee inspired split breakfast highlighting the buzz bees add to our morning diet.

Toby first experienced a sombre breakfast option which lacked bee influence and consisted of Weetabix and dry toast, before celebrating the vast range of foods that bees help to sustain through the pollination role they play.

Toby Perkins with the bee Inspired breakfast

The bee inspired breakfast contained the foods that we recognise as being aided by beepollination including British fruit and honey along with unexpected food which most people wouldn’t recognise as being impacted by bees including yogurt, jam and coffee.

Toby said “The bee breakfast was a great idea. It really illustrated the crucial role bees play in maintaining our ecosystem and adding colour and vitality to our daily diet and particularly our breakfast table.

“The decline in bee numbers is not just an environmental issue but one that affects us all as it has a knock on effect on the food available at our tables, the way we grow fruit, our natural surroundings and the global economy.

Chesterfield Borough Council and the Derbyshire Wildlife Trust are currently doing a sterling job in creating bee friendly habitats and are setting an example of what can be achieved in this area. Friends of the Earth always do a valuable job of raising awareness and creating campaigns that not only protect the environment but impact peoples’ everyday lives.

Anyone who shares an interest in this issue might like to sign the bee cause petition and see what simple steps they can take to help stop the bee population decline”

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Toby Perkins at the site of the new Chesterfield Panthers ground with Fred Pell Tresurer, Michele Lord Chair and Kevin Brown Secretary

Chesterfield MP visits the new Chesterfield Panthers ground and supports the Olympic legacy in Chesterfield

Toby Perkins at the site of the new Chesterfield Panthers ground with Fred Pell Tresurer, Michele Lord Chair and Kevin Brown Secretary

The once in a life time redevelopment of Chesterfield RUFC was given the thumbs up by Toby Perkins when he visited the £1.9 million sports ground development with Chesterfield Panthers Treasurer Fred Pell on Monday.

The Chesterfield MP helped to welcome a new era for Chesterfield Rugby as he was guided around the multisport and community facility development currently under construction in Dunston.

Toby was joined by a Panthers entourage led by Club treasurer Fred Pell, Secretary Kevin Brown and the Clubs first female Chair Michelle Lord. Toby congratulated the team of volunteers on making the construction possible by securing a range of funding and inward investment from local and national agencies and private investors.

The new sports complex has been partly financed by the Inspired Facilities Fund, part of the Sport England Olympic and Paralympic Legacy Fund which helps communities to take advantage and celebrate the inspiration of London 2012.

The £1.9 million project will see the creation of Chesterfields first multi-use floodlit training ground consisting of three new rugby pitches, an outdoor gym, Multi-use games area and multi sport training pitch.

Toby said “There is no doubt that the facilities being developed in Dunston will be a coup for sport in Chesterfield. I hope that facilities of this nature can help to encourage a new generation of people to become involved in sport and help the sports clubs in Chesterfield to thrive in the spotlight of the Olympic legacy.

“Projects like this are a terrific example of the wider benefit that sports clubs can provide within the community helping to develop facilities that will not only be recognised across the East Midlands but that will also provide benefits for the local community. There is a very dedicated team of volunteers at Chesterfield Panthers who have put a lot of time and effort in to this project and achieved a great deal up to this point.

“As a former youth Rugby coach myself I know how much passion exists in Chesterfield for rugby and sport in general. The creation of facilities like the ones being developed by Chesterfield Panthers are a valuable part of helping the people of Chesterfield to take part in sport at all levels and reach their sporting potential. I am proud to support the local rugby club and wish them continuing success in the completion of the project.”

Fred Pell, Treasurer of Chesterfield Panthers rugby Club said “On completion of the new Chesterfield Panthers ground we’ll have one of the best facilities in the East Midlands. It will be a facility that will not only launch a new era for the rugby club but will provide new facilities for the community and help to bring more jobs and investment into the town”            

Toby will be swapping business suit for a tracksuit as he takes a youth training session on Thursday evening to encourage more young people in Chesterfield to take advantage of Chesterfield’s current facilities and ensure the legacy of the London Olympics is celebrated in Chesterfield.

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The photo decoration outside Reeves with Cllr Allison Butler (Labour Group Deputy Leader) and Cllr Toni Letts (Labour's Shadow Cabinet Member for Economic Development)

Visiting Croydon – One year on from the riots

Last week, in his capacity as Shadow Small Business Minister, Toby visited Croydon to see how small businesses are getting back on their feet one year on from the riots.  Here he shares his thoughts on what he learnt.

 

At Surrey Street Market

Reflections on my visit to Croydon

We all looked on in horror this time last year as riots broke out in London and across the country. A year on, many of these communities are getting back on their feet, but one group who were severely affected by the riots have not received the help they deserve.  These are small business owners, many of whom saw their entire life’s work destroyed by mindless rioters.

That’s why I visited Croydon this week, an area still coming to terms with the legacy of the riots and a place where five small businesses go under every day.  I wanted to hear firsthand the experiences of local small businesses about how they overcame the legacy of the riots.

I talked to variety of small businesses in central Croydon, including market stall owners, jewellers, a small independent restaurant.  I was particularly honoured to meet two generations of the famous Reeves family whose iconic, 140-year-old House of Reeves furniture store was destroyed during the riots.  I also met with local Labour Councillors who have been fighting hard on the side of those small businesses who were attacked, and the Chair of the Croydon Business Improvement District (BID).

Meeting a local jewellers

I was struck by two things in particular.  Firstly, how important the businesses were to the local community.  The market stalls are undoubtedly the shop window for the whole high street, with many of the stalls owned and ran by the same families for generations, and the House of Reeves is very much a local icon.

Secondly, how the government, be it the Tory Prime Minister, Tory Mayor or Tory Council, has been conspicuous by its absence during the recovery process.  Help has not been offered to local businesses, they have had to fight for it.  Some businesses were only able to access loans to tide them over whilst they’ve waited months for compensation, thanks to the intervention of their Labour ward councillors.  There is also much frustration that riot recovery money offered by the Mayor was spent by the Tory Council on existing projects and did not find its way to the businesses who needed it.

Meeting the Reeves family

This is all despite the assurances of both the Prime Minister and the Mayor that they would stand by businesses who were targeted during the riots.  Almost exactly a year ago the Prime Minister stood at the despatch box and declared:

“I give the people affected this promise: we will help you repair the damage, get your businesses back up and running and support your communities.”

As late as this February, the Mayor of London, Boris Johnson, said:

“…all uninsured claims submitted under the Riot Damages Act have been processed through a bureau set up by the Home Office. MOPC officers have been instructed to treat these applications as a matter of priority and they guarantee that once a complete and documented claim is received an offer (Discharge Form) will be sent within five working days.”

These promises will be ringing hollow in the ears of the small businesses in Croydon and elsewhere as the government seems to have completely absented itself from the riot recovery process.  If a promise to get businesses back up and running  does not include action to speed up the compensation process then what is it worth?

The photo decoration outside Reeves with Cllr Allison Butler (Labour Group Deputy Leader) and Cllr Toni Letts (Labour’s Shadow Cabinet Member for Economic Development)

This is why I have also written to the Prime Minister this week, highlighting many of the struggles that small businesses are facing because of the riots and asking him to finally take action to support small businesses which are the lifeblood of many local economies and communities.

As someone who ran my own small business for five years before entering Parliament I understand the responsibility small business people feel.  They need to ensure that their business prospers every day to put food on the table for their families.  Business people thrive on this responsibility, it drives them to succeed, but they simply want a level playing field where they are not penalised by the actions of others.

There is no doubt that Croydon is getting back on its feet and maintains a great sense of community spirit and pride in its local businesses.  The new House of Reeves store is a potent symbol of this as the building has been covered with 4,000 images of young people holding positive statements.  It’s just a shame that the government’s absence has made this struggle so much harder than it should have been for local small businesses.

By Toby Perkins MP
Shadow Small Business Minister

 

This article originally feature on Labour List at: http://labourlist.org/2012/08/croydon-a-year-on-from-the-riots/

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despatchbox

Just one in five reports on delinquent directors result in disqualification, Shadow Minister learns

New figures uncovered by Shadow Small Business Minister Toby Perkins show that in the last year, just 21% of reports submitted by Insolvency Practitioners against delinquent and unscrupulous directors resulted in a disqualification or undertaking by the Insolvency Service – down from 27% for 2010-11 and from 45% ten years ago.

These reports are known as “D1 Reports” and submitted against directors that are observed to be involved in poor or dishonest behaviour, they do not include insolvencies through honest failures.

In 2011-12, out of the 5,401 D1 reports submitted by Insolvency Practitioners only 1,151 (or 21%) resulted in a disqualification or undertaking, according to answers to Parliamentary Questions tabled by the Shadow Minister.

Mr Perkins and insolvency trade body R3 have joined forces to speak up for the majority of small business who suffer when delinquent directors are allowed to get away with their actions.  They are demanding action over falling disqualification rates for unscrupulous directors.

Commenting, Labour’s Shadow Small Business Minister Toby Perkins MP said:

“The vast majority of British businesses are fighting hard to survive in this time of recession.  Of those businesses which have unfortunately gone under, a small minority are a result of malicious practice by the company director.  The actions of these directors threaten other businesses and suppliers.

“The public need confidence that the Government and the Insolvency Service are taking tough action against unscrupulous directors to protect them and the millions of honest, hard-working small businesses who are the lifeblood of the British economy.

“These new figures demonstrate that more and more delinquent directors are walking away from their responsibilities each year.  This is a trend that cannot be allowed to continue.”

R3 President Lee Manning commented:

“In each report the Practitioner believes the Director’s behaviour ‘merits further investigation’, for potential misconduct. In fact, during the downturn, the number of D1 reports increased dramatically, reflecting an increase in fraudulent or delinquent behaviour – the disqualification process has simply failed to keep up.”

“This is a crucial area to get right in terms of protecting the public – no-one wants to see a delinquent director left unchallenged and free to continue to cause damage to other well-run businesses.  In fact Government estimates that for every disqualified director there is an £88,000 benefit to the economy, in terms of the economic damage that would have otherwise been caused.”

New figures also show 20% of disqualified directors flouting the law

Alongside low numbers of disqualifications, there are concerns that the disqualification process is not robust enough in preventing directors from repeating the same behaviour. Figures from R3 show that in the past 12 months, 20% of UK Insolvency Practitioners have seen disqualified directors’ breaking the terms of their disqualification.

In one instance, an Insolvency Practitioner submitted a D1 form against a director who had presided over seven failed businesses, only to be told by the Insolvency Service that it was not in the public interest to pursue the case.

R3 President Lee Manning said:

“The disqualification process in the UK is just not followed through, which is leaving consumers, suppliers and the public at risk. These Directors who then break the terms of their disqualification should feel the full force of the law.

“We need to push up disqualification rates and then make sure those who have been disqualified do stick to their terms if we are to maintain public confidence.”

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Welcome

I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries in Chesterfield and Staveley so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

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