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House of Commons, Wednesday, February 9th, Grand Committee Room

The next meeting is Thursday March 9th, Committee Room 4
- Flaws in the Practice of Insolvency Practitioners

Apologies - 7 apologies received
Present : Gill Hankey (Speaker - BAS); Sabine McNeill [Co-ordinator];
Donald Martin [Chairman];  Lord Sudeley; Canon Peter Challen & David
Schoibl; [Minute Secretaries]; Keith Whincup [SAFE];  Julita Karol;
Lawrence Bloom [Adviser]; Damian Mearns; Robert Tait; Peter Travers; Robert
Arnold [BAMR]; Glen Segell [FT]; Ken Palmerton; Naomi Calligaro; Abdallah
Homouda (Journalist);  Anthony Chevasse; Iain Greenwood: Bernie Walsh;
Louise Taylor; Tim Knight; David Heathfield; John Stafford-Haworth; Reza
Adil; Waheed Quaiser; Peter Browne; Jane Taylor; Tony Pritchett; Frank
Gelli; Sarah and Maurice Blackburn;Christopher Houghton Good; James de la
Mere; Bill Toye; David Weston;  E Bednarik (37)

Sabine updated us on all the initiatives that are being undertaken:
-- the Financial Services and Markets Bill with Lord Caithness, Lord Ahmed
and Tim Lawson-Cruttenden, the harassment lawyer
-- the Welsh Pound with Jane Taylor, Bernard Lietaer, Margrit Kennedy and
David Weston
-- the website http://intraforum.net/money

A welcome was extended to new participants and introductions made.

Before the Speaker for the evening we reviewed the situation now so much
more widely recognised after Seattle. Up to two trillion $s change hands
every day on world currency markets. Of that about 95% is unproductive
speculation - buying and selling to make a profit - betting on boom or
bust.  In 1970 90% of this level of global trading was like blood to a
genuine economy and 10% the cancer of speculation. By 1997 5% was for
useful purpose and 95% the cancer.

A variety of people spoke of work to effect change in various localities,
which was encouraging, even while indicating how massive the problem and
relatively small the number of serious propositions to effect fundamental

Sabine recommended the Early Day Motion web site that helped us to see
where change could be sought with which MPs, as appropriate. There was no
sense of dissent when it was suggested in summary that financial capitalism
as now rampant is the mortal enemy of democracy.

Gill Hankey from the Bankruptcy Advisory Servicing , speaking from the
intense personal experience which drove her to try to confront the problem
and seek prevention of the expanding disastrous situation, outlined the
need for urgent action. Huge numbers of bankruptcies  to innocent business
people are occurring because of a combination of reasons mounting over the
last twelve years:-
- new shopping style is a death for many small independent retailers
- cheaper international travel
- lease agreements too long and long term loans often have hidden immediate
demand clauses
- personal guarantors now needed even for Ltd Companies
- credit availability and irresponsible lending more serious than
irresponsible borrowing
- knock-on effect of price cutting under acute competitiveness
- cost of bankruptcy to individuals in physical and mental stress
- loss of tourism in many areas
- high utility costs in low economically active areas
- legal aid withdrawal
- sudden random demands to deal with unconnected problems
- banks often have competing clients - this must be banned.
- the loss of proper jobs is leading many to doomed attempts to turn
hobbies into businesses.

From 1500-2000 per year in the 80s, bankruptcies now running at 30,000 per
year. The proposal to shorten the term before discharge to six months is an
important step for bankrupts. She estimates that 90 - 95% of them are
innocent ! And credit reference agencies must now be forced to accept this.
A change of attitude is required and an Insolvency Practices Council will
be formed to monitor and review. The Society of Practitioners of Insolvency
will change to the Business Restructuring Service.

Less than 5% of bankruptcies are judged to be contrived, though there is a
worrying trend for consumer debtors to be taking the way of bankruptcy when
they have already benefited

Enforced voluntary insolvency was not recommended as often more stringent
conditions are imposed and can push back to the five years term again.
Informal negotiation more effective.  There are deals to be done for lower
fees than insolvency.

Inspection and administration roles must be separated.