Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, whether she has made an assessment of the potential merits a statutory duty on insolvency practitioners to pay outstanding (a) wages and (b) notice pay as the first duty when a company ceases to trade as a result of insolvency.

Raising the priority of payment for employee claims would inevitably reduce the sums that may be paid to other unsecured creditors, including small businesses.

Former employees of insolvent employers can claim redundancy payments and other contractual debts from the National Insurance Fund, subject to statutory limits. Those claims will be paid whether or not there are sufficient funds in the insolvent company and will be paid much quicker than if they were elevated higher than other creditors in law.

As part of their statutory duties, Insolvency Practitioners must provide the necessary information to the government administered Redundancy Payments Service to facilitate the processing of employee claims as quickly as possible.