Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability For WrongFul Trading and Extension of the Relevant Period) Regulations 2020

Lucy Powell Excerpts

Monday 14th December 2020 General Committees

[Lucy Powell (Manchester Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship for the first time, Dr Huq. I am going to race to see whether I can beat the Minister; I shall endeavour to do that so that colleagues can get elsewhere. We support the statutory instrument. In fact, I hate to say that I told him so, but on previous occasions we asked the Minister to introduce these measures. As much as I enjoy our exchanges on all the statutory instruments and Bills that we have been considering lately, I am sure that we could all have done without this today.

We welcome the measure to suspend wrongful trading and we also support the extension of measures introduced in the Corporate Insolvency and Governance Act on AGMs and so on. I briefly remind colleagues that we called on Ministers to extend the provisions during the passage of the original Bill back in the summer, and we have continued to do so when we have considered other statutory instruments.

Back in July, when we were debating the Bill, the sunset clauses were then for September and we asked the Minister to extend them to the end of the year, because we knew that September would not be long enough. We then had statutory instruments to extend all the other measures in the Bill, but not wrongful trading. Again, we warned the Minister that it would be necessary to do that. So here we are again.

I want to put on record my thanks to the Institute of Directors, which I know has been lobbying incredibly hard on these important issues. I met the IOD again this morning. Better late than never, however, so we will obviously support the regulations. But let us remind ourselves that many businesses face a huge cash crisis as a result of the pandemic, with their trading levels terrifyingly low or non-existent. It is therefore important that they are given this flexibility to wrongfully trade—because that is what they are doing when they have overheads but no income coming in. Whether they are hospitality businesses, those in their supply chains or those in the events and wedding industry, which the Minister and I have recently debated, we still need more support for these sectors. Measures such as the furlough scheme are welcome, but, as we have discussed before, if businesses go bust the furlough scheme will be of no use to the workers who will not have any job to return to.

Although today’s measures will provide some temporary relief for businesses worried about insolvencies, there is still a great deal of concern about the many cliff edges that businesses face all coming to a head at the end of March—the VAT referral, the business rate holiday, the measures in these regulations, measures on loan repayments and the furlough scheme will all come to an end. Can the Minister tell us what he is doing to ensure that we will not see wave after wave of insolvency as these cliff edges all come at once? As we hear today, London and other areas are going into tier 3 and that will concern many businesses.

I am sure that the Minister agrees with us that the best way for our economy to recover is to save businesses and jobs today. Rather than just talking the talk, we need to walk the walk and have a proper plan in place for businesses to recover. Instead of constantly returning to these Committee rooms to extend the cliff edges, will the Government pledge today to do something to deal with them rather than just extending the deadline further and further?

[The Chair]

Would anyone else like to make a speech? No, I call the Minister to respond.

[Lucy Powell]

I did beat him.