Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020

Lord Stevenson of Balmacara Excerpts

Tuesday 27th October 2020 Grand Committee

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I thank the Minister for introducing the SI in his customary clear way. We support the measures that are in it. The speeches from the Minister and other noble Lords who have spoken today have recalled for me the happy days, and indeed nights, that we spent on the Bill. It is good to see that some of the debate’s issues are still very live.

Most of the questions that I was going to ask have been asked by others, and I look forward to them getting a response from the Minister. The two that were most interesting, in my mind, included why the Government had chosen not to extend the measure about wrongful trading from directors. We had reservations about that when it was introduced in the Bill in the first place; it has not been continued, and I wonder whether he could explain the Government’s thinking on that point, a point made by the noble Lord, Lord Bourne of Aberystwyth as well.

On the Explanatory Memorandum, the noble Baroness, Lady McIntosh, raised the question of the numbers. We do not seem to know quite how many companies are taking advantage of the breathing space; perhaps the Minister could throw a bit more light on to that. She also raised the arrangements for temporary procedural rules to enable an operational moratorium and the question of whether they might become permanent—and, if so, on what timescale.

The noble Lord, Lord Bourne, asked why we were not moving forward with the technology to allow AGMs to be held virtually. I note that at paragraph 11.1 in the Explanatory Memorandum, the Government plan to produce best practice guidance on holding AGMs flexibly—better late than never, perhaps. I would be grateful to know what the timetable might be for making it permanent.

I have two points to finish. My noble friend Lord Blunkett’s points were really interesting. I hope that the Government will think hard about how they might anticipate the differential effect of the crisis across the country. My noble friend talked about the north, but it is also true in Scotland, Wales and Northern Ireland, where there are very different responses by companies, corporate bodies and individuals to this. Some consideration will need to be given to the differential impact of tiers 1, 2 and 3—and, possibly, 4 and 5, if they ever come—on companies big and small, and how we might deal with that. I hope that there has been some thinking done.

Finally, I noticed that the word “viable” comes a lot from Ministers when speaking about the crisis and on funding that might be available from the Government to take us through. What definition of viable is being used here, exactly? I am an accountant by background, although I did not practise very much, but I do not recognise viable as a term used in the accountancy profession. It is usually much harder edged and backed up by figures. “Viable” seems a very soggy way in which to approach this. Perhaps the Minister could expand on that when he comes to respond. However, to reassure him, we back this SI.