Corporate Insolvency and Governance Bill

Baroness Bowles of Berkhamsted Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 17th June 2020 Lords Chamber

I strongly urge the Minister to give as full and as expansive an explanation as possible—and in particular, to be clear about whether the Government are truly committed to the Pre Pack Pool’s continued existence, and whether they feel it is their responsibility or role to keep it functioning. I certainly urge him to give some indication of what they will do, not just to plug this obvious gap in the long term, but—in the short term, at this critical moment—to ensure that the measure, which should have been exercised previously, is at least available when it is most needed.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, there is little to add to what has been said. I signed both the amendments, and I agree with what the noble Lords, Lord Hodgson and Lord Vaux, have said, and with what they have proposed both in these and in their other amendments. I also associate myself with the remarks made by the noble Baroness, Lady Altmann, and the noble Lord, Lord Mendelsohn, about pre-packs. Profitable as they may be for some, and right in some instances, they are too frequently a blot on our corporate landscape. They are despised by the public, who recognise them as being too often against the public interest.

It is important to take forward a fulsome operation of the Pre Pack Pool, by mandating its use. As has been explained, there was a provision that could have enabled that, but it expired recently, possibly through unavoidable circumstances. As the noble Lord, Lord Hodgson, also explained, there is a greater need for that provision now, because otherwise even the moratorium, and the good intentions that lie behind it, could be undermined.

Who refers something to the pool could be left open, but it is probably better to specify, as the noble Lord’s amendment does. It does not have to be the purchaser; it could be a monitor duty, making the process look more independent.

As the noble Lord, Lord Hodgson, says in his amendment, there should also be some kind of positive response from the panel. He put “not unreasonable”. I tend to favour something a bit more positive, possibly that it is “fair and reasonable”, which carries an overtone both of an open market or arm’s-length value and of being viewed in the round—again, as the noble Lord, Lord Hodgson, explained in his speech. Indeed, he even used the word “fair” in explaining what should happen.

If we compare the two amendments, which I did when I signed up to both, it comes down to where they are placed in the relevant schedule and whether to link them to connected persons rather than to associates, as the noble Lord, Lord Vaux, has done. As “connected persons” was the language used in earlier debates on the Bill, that is the placing that caught my eye, but I would not bet against the noble Lord, Lord Hodgson, having found possibly the better spot. However, now that we are alert to it, an optimal draft could be produced, and I urge the Government to do that.