Downtown in Business has taken its campaign against serial “phoenix companies” to Westminster this week, meeting with MPs and Peers to press the case for tougher action against directors who repeatedly leave suppliers, contractors, and taxpayers out of pocket.
DIB group chairman and chief executive Frank McKenna met with a cross-party group of parliamentarians to discuss growing concerns from small and medium-sized businesses that current insolvency rules are being exploited by a minority of directors who repeatedly place companies into administration before re-emerging under new business structures.
The meetings form part of a wider campaign launched by Downtown in Business to secure reforms that better protect SMEs and ensure greater accountability for repeat offenders.
As part of the initiative, DIB has published an open letter to MPs, ministers, metro mayors, and civic leaders outlining a package of proposed reforms.
The proposals include:
• Automatic investigations where directors are linked to multiple insolvencies within a defined period.
• Tougher director disqualification rules for repeat offenders.
• Greater transparency around pre-pack administrations and successor companies.
• Enhanced powers and resources for the Insolvency Service and HMRC to pursue serial abusers.
• Stronger protections for SME creditors during insolvency proceedings.
• A wider national conversation about fair business practice and responsible capitalism.
The full open letter can be viewed HERE.
Frank McKenna said:
“Every week, we hear from businesses that have done everything right. They have delivered contracts, paid their staff, honoured their obligations, and contributed to their local economy.
“Yet when a customer goes bust, they are often left carrying losses that can run into tens or even hundreds of thousands of pounds. In some cases, they then watch the same directors start trading again under a different company name as if nothing has happened.
“That cannot be right.
“Let me be clear. This campaign is not about penalising genuine entrepreneurs whose businesses fail. Failure is sometimes an inevitable part of business. However, there must be a distinction between honest commercial failure and the repeated abuse of insolvency laws.”
McKenna said the response from parliamentarians had been encouraging, with a number expressing concern about the impact of serial phoenix activity on SMEs, local economies, and public finances.
He added:
“Governments have rightly taken action on late payments, but there is a growing recognition that serial phoenix companies represent another significant threat to small businesses.
“Every pound lost by an SME through repeated insolvency abuse is a pound that cannot be invested in growth, recruitment, training, or innovation. Every pound lost by HMRC is money unavailable for public services.
“Downtown in Business is determined to keep this issue firmly on the political agenda. We will continue to work with MPs, Peers, ministers, metro mayors, and business leaders to secure meaningful reform.
“The overwhelming majority of businesses play by the rules. They deserve a level playing field. We intend to ensure that policymakers understand the scale of this problem and act accordingly. “This campaign will not stop until we see real action, stronger protections for SMEs, and proper accountability for those who repeatedly game the system.”
