“There are very few places where business can be said to be blooming at present, but there is no doubt that these are busy days in the bankruptcy courts. The recession, the high interest rates, and the soaraway pound are accounting for a growing army of failed companies and people in unmanageable debt. The interim report of the Insolvency Law Review Committee chaired by Sir Kenneth Cork, which was published yesterday, furnishes an unanswerable case for saying that many of those people who are brought to this pass could well have their cases sensibly resolved, to the satisfaction of themselves and of their creditors, without troubling the bankruptcy process at all. The trial of hapless consumers who, as the report puts it, have ‘succumbed to the blandishments of the providers of credit,’ whose only asset is their earning capacity, and who have nothing of note to reveal through the rigorous invigilation of their affairs, or the small traders sunk in an unexpected storm ought not to be subjected to procedures devised to deal with substantial debt or positive malpractice.
The Cork Committee has therefore come up with a three tier system for handling personal bankruptcies which would possibly reduce the present annual toll of 1,900 cases…….That solution might have suited the Labour government which appointed the Cork Committee, but it is not to the taste of the present government. In a sentence which comes near to sullying Sir Kenneth and other eminent city colleagues with the taint of bureaucratic socialism, the Government yesterday published its report…………The solution it has reached, therefore, is to remove the Official Receiver (public therefore undesirable) from the administration of personal bankruptcies altogether, and turn the work over to the private sector.
That solution fits perfectly with the Government’s ideology and enables it to advertise a saving of 570 staff and some £3 million a year………. It looks, in other words, as though the Government’s saving of £3 million is likely to be bought at the cost of perpetuating a more inefficient and inequitable system than the Cork Report would provide. Meanwhile, spending of many times this magnitude is allowed to continue in places where vested interests are strong and carefully constructed bureaucratic empires continue to be effectively protected against every threat. Where this leaves the Cork Committee, which is now at work on the rest of insolvency law, is anyone’s guess. In despair, very likely.”
Picture Credit: http://images.npg.org.uk/120_120/2/9/mw08129.jpg