Oral Answers to Questions

Bob Blackman Excerpts

Thursday 31st March 2011 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

The hon. Lady is right to raise this matter. She will know from her time working in the citizens advice bureau in her area how significant this matter is. Some debt advice agencies out there—frankly—do not act in an acceptable way. We are considering this issue under the consumer credit and personal insolvency review, and will make an announcement after the Easter recess.

[Bob Blackman (Harrow East) (Con)]

T9. I am all in favour of encouraging enterprise and start-up businesses. However, what will my hon. Friend do about the current scandal of businesses trading, taking people’s money, closing down overnight, then starting up the next day with the same directors and defaulting on all due payments? That is a scandal in society and we must stop it.

[Mr Davey]

My hon. Friend is exactly right, so I hope he welcomes the statement that I have made today on this very issue. Following a consultation launched by the previous Government, we have concluded that action needs to be taken on phoenix companies when assets are sold to connected parties without open marketing. Our proposals, which are in the statement, include insolvency practitioners giving three days’ notice to all creditors before the sale, which we think will be valuable.