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KIRKLEES BUSINESS NEWS The business NEWSpaper for Kirklees
Slow recovery for debt-hit economy
BRITAIN is on the road to economic recovery, says an insolvency expert. But the recovery rate will be painfully slow as debt-hit individuals and businesses fight to revive their fortunes. Meltham man Peter Sargent, an insolvency practitioner and partner with Begbies Traynor, said the recent recession – billed by many insolvency experts as the worst in living memory – had failed to follow the pattern of previous downturns. Said Mr Sargent: “As part of the usual economic cycle both corporate and personal insolvencies tend to rise as the economy comes out of recession, and unemployment statistics also follow this trend. “This time, however, things have ■ HARD WORK: Peter Sargent, of insolvency practice Begbies Traynor been very different. It has been hard for businesses, very hard, but the including changes to legislation over the financial edge into insolvnumbers of companies entering some which reduced the period of bank- ency,” said Mr Sargent. “Some took form of formal insolvency procedures ruptcy from three years to one year, shelter in Debt Management Plans, has not hit the heights expected. On record amounts of domestic lending others opted for IVAs and bankruptcy the other hand, the number of indi- and the marketing of IVAs as a and for those with low level of debts viduals seeking an insolvency solu- domestic debt solution. and no assets or surplus income, the “As soon as the economy dipped Debt Relief Order was introduced. tion has reached record levels.” Mr Sargent said the increase was and those debts could no longer be “In previous recessions, most perdue to a combination of factors, serviced, the individuals were pushed sonal insolvencies had been connected
with a business in one way or another. This most recent recession was different. The statistics flipped and the vast majority of personal insolvencies are now of a domestic nature.” Mr Sargent said the anticipated increase in corporate insolvency at the end of the last recession had not materialised. “This is down to four factors,” he said. “Firstly, business was in better shape when the economy went into recession than in previous cycles and had more wool on its back. Secondly, the use of IT means management is better informed than ever before about how the business is performing. Thirdly, banks have tried to support business wherever possible. And finally, HM Revenue & Customs has also supported business where it can with the widening of the time to pay initiative.” Said Mr Sargent: “Current economic predictions talk of a long slow recovery with the debt burden taking its toll on both business and domestic spending. It is going to be hard work but the economy will recover.”
Survey says business rules ‘need simplifying’ MOST Huddersfield firms are upbeat about their prospects, it is claimed. But a large majority expect to see no benefit to their businesses from an extra £10bn in funding which has been promised by the banks. A survey conducted by TaxAssist Accountants in Huddersfield showed
that 56% of local firms expect to see their business grow in the next 12 months. But 81% said they did not expect to benefit from the banks’ recent pledges to support small businesses while 74% believed employment law needed to be simplified.
Only 23% of local businesses think they will be able to recruit new staff in the coming year. On business regulation, respondents highlighted employment law, health and safety and planning as the areas they would most like to see simplified.
The survey was part of a national poll undertaken by TaxAssist Accountants in partnership with Norwich North Conservative MP Chloe Smith. The results will be presented to the House of Commons to support calls for changes to business regulations affecting smaller firms.
INSIDE Graduate support GRADUATE Jessica Jubb has launched a business to help former public service executives re-launch their careers as consultants. She has embarked on the venture having gained management qualifications and practical experience working for local authorities and the NHS.
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WEST Yorkshire businesswomen have urged the Coalition Government to support small and new firms. The call came at a major conference led by networking group Forward Ladies.
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Solicitors for business inYorkshire www.chadwicklawrence.co.uk Huddersfield | Wakefield | Halifax | Leeds