Wednesday, 23 May 2012


Spain’s King Juan Carlos has recently shown his complete inability to grasp the crisis at home by taking a holiday in Botswana to shoot elephants and other exotic animals.

“We all have to tighten our belts a bit because of the difficult times for the economy” the King told his subjects a few months ago,

The holiday was estimated to cost £8,000 a day while he as on his hush, hush, all expenses paid, hunting trip.

Unemployment has reached 24 % in Spain and the economy is heading towards a double dip recession. The monarch claims he lay in bed worrying at night about the plight of the jobless….

Tim Corfield May 2012

Monday, 21 May 2012

OFT Announce Revised Debt Management Guidance

The Office of Fair Trading (OFT) has estimated commercial fee charging debt management companies (DMC’s) make £250 Million a year from over-indebted clients.

Since the last review issues have continued to be raised over advertising and marketing practices as well as the quality of advice given by these firms.

Following the OFT’s earlier review, 129 warnings were issued to DMC’s while a further 67 warning letters were sent out. The OFT has since claimed 87 firms have left the market either voluntarily or due to enforcement action.

However, there remains concern over the quality of the management advice in this sector where there are “vulnerable consumers”.

The new guidance looks to clamp down on firms making “false or misleading claims” about the business such as operating websites which appeared to be run by a Government of a charitable body.

Any “unfair or improper practices” could lead to the loss of a firm’s consumer credit licence. Among the practices identified were the sending of unsolicited text messages, email or voicemails and the issue of inappropriate financial incentives to staff giving debt advice.

The latest guidance has been welcomed by the two leading trade associations for the industry: The Debt Manager Standards Associate (DEMSA) and the Debt Resolution Forum (DRF). The pair together represent some 46 DMC’s and aim to promote professional standards in the industry.

Tim Corfield

Monday, 14 May 2012


Standard and Poor have recently confirmed the UK’s AAA credit rating but have also warned that the Government’s austerity drive would continue to drag on growth for years to come.

S&P said the outlook for the UK’s AAA rating was “stable”.

George Osborne said S&P’s decision was a reminder that without austerity the UK would be lead into “an economic catastrophe”.

S&P acknowledged that household spending would be hit by weak wage growth, rising unemployment and a weak housing market.

Tim Corfield - May 2012

Friday, 11 May 2012

New High Court Ruling On Pension Pots

The High Court has recently ruled that untouched private pension pots of undischarged bankrupts can be used to pay off creditors.

Bernard Livesey QC judged that pensions of bankrupts yet to be accessed should no longer be off limit to a Trustee in Bankruptcy.

“Why should it be that a person who elected on the day proceeding his bankruptcy should be in a position where his entitlement to enjoy the fruits of his pension is liable to be subject to right of the trustee to apply for it to go to his creditors … whereas the person who had not yet done so is immune from the impact of the section and can enjoy the full fruits of his pension to the detriment of his creditors?”.

This case follows a Trustee who brought an application to force an undischarged bankrupt to draw his pension which he was eligible to do.

This judgement, which is subject to appeal, may have some far reaching consequences. We need to bear in mind that we need entrepreneurs to get this country bank on its feet. Many of these people will be sole traders and may not have been particularly well advised before they start out. The difference between such a person and one who take limited liability protection can have a massive effect if the business fails. For a great many, by the time they have decided to take the leap to set up their own business, they have accumulated a pension pot from previous employers. Why should they have to release this at a later date having fuelled the economy for a number of years in order the send the majority of this cash back to the creditors?

The whole question of risk and benefit needs to be taken into account when framing the law in this area.

I suspect there will be much more on this particular subject…

written by Tim Corfield

Thursday, 10 May 2012


“The problem is solved” said French President Nicholas Sarkozy just five weeks ago but we have seen recently that Spain is the next Eurozone country facing a crisis.

Spain is the fourth largest Eurozone economy and the twelfth largest in the world.

  • Spanish GDP last year was almost five times that of Greece.

  • Unemployment in Spain in March hit a record of 24% which is by far the highest in the industrialised world and more than doubles the 10% Euro average.  

  • Almost one half of Spain’s young people are unemployed.

  • Over 8% of banking loans are not being sustained.

In a bid to boost employment the Spanish Government passed new laws making it easy to cut wages and lay people off. The Spanish Unions have responded with a general strike and there have been serious political protests.

Spain has now tipped back into recession with GDP shrinking in the first quarter. The Government predicts a 1.7% contraction in 2012 which many analysts consider optimistic. As the economy slows, tax revenues fall and welfare payments rise which makes the fiscal position worse. The Government admit that the public debt will hit 80% of GDP by the end of the year.

Spain must repay nearly 12 billion Euro Bonds by the end of April and another 13 billion Euro loan at the end of July.

I hope Sarkozy has this all under control. The King of Spain obviously isn’t too bothered – he’s managed to get away from it all with a bit of elephant hunting!

Tim Corfield - May 2012

Saturday, 5 May 2012


Germany and France have moved towards a bruising and potentially destabilising showdown on how to tackle the European debt crisis.

Francois Hollande has made a presidential pledge to re-open the EU’s financial pact. Angela Merkel said in response “the fiscal pact has been negotiated; it has been signed by 25 Government leaders, and has already been ratified by Portugal and Greece. Parliaments all over Europe are about to pass it. Ireland has a referendum on it at the end of May. It cannot be negotiated anew”.

There is a backlash across Europe against austerity and a greater emphasis on boosting growth and job creation. If Hollande wins the French presidency and also secures a parliamentary majority in June he and his team are committed to not ratifying the EU pact unless it is modified to include growth boosting policies. Technically, the pact can come into force without French ratification but this is politically inconceivable.

The Dutch Government has collapsed recently over a failure to agree on spending cuts and comply with the new rules.

Spain’s credit rating has been revised downwards recently because the austerity is defeating the chances of economic growth.

The Romanian Government has recently been ousted in a vote of no confidence triggered by opposition budget cuts.

The Czech Government is fighting for its survival.

Herman Van Rompuy said “Over the past two and a half years the EU has had to react to the economic and financial crisis. This has not been easy and lead to some frustration at times and strains. We have had to deal with the urgent pressures of the sovereign crisis. The emphasis should now shift increasingly to measures that can boost growth and jobs.”

Hollande responded robustly to Merkel “it’s not Germany that decides for the whole of Europe”.