Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020

Baroness Ritchie of Downpatrick Excerpts

Tuesday 19th January 2021 Grand Committee

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering. I thank the Minister for his explanation of these regulations, which simply prolong the period in which the temporary provisions that restrict the issuing of winding-up petitions under the Corporate Insolvency and Governance Act are to have effect to 31 March 2021.

While the regulations are welcome, like the noble Baroness, Lady McIntosh of Pickering, I wonder about the Government’s exit strategy and the need to support companies that have had to endure—along with their management and employees—severe restrictions as a result of the Covid pandemic. This was raised during the passage of the Bill, and the debate on subsequent regulations, because of the nature of the pandemic, the need to bear down on infection rates, and the problems faced by many businesses in such a difficult trading environment. Therefore, why not extend for a longer period, as lockdown could last for a significant time, given the concerns around the level of transmission of the new variant of Covid.? I fully appreciate that there is a balance to be struck between having an exit strategy and protecting companies from insolvency.

Unfortunately, we are discussing this statutory instrument in retrospect, because of the nature of the pandemic—it came into force on the 31 December. However, is there not a better, more effective system, whereby we can debate and affirm such statutory instruments before they come into effect, to ensure greater accountability?

The noble Lord, Lord Bourne of Aberystwyth, referred to the briefing we received from R3. It suggests that a key way for the Government to help manage the process is the invocation of HMRC to take an engaged and supportive approach in its role as a creditor in most insolvencies. With its new preferential status, HMRC’s support as a creditor will be required to ensure that viable restructuring proposals can be agreed—proposals that could potentially save thousands of jobs and businesses as the UK adjusts to a post-Covid environment next year.

As the noble Baroness, Lady McIntosh of Pickering, said, there are other issues. There needs to be a multi-departmental approach across BEIS, the Treasury and HMRC to address the regeneration of our high streets, where many of these businesses are located. What discussions have taken place about a root and branch review of the business rates system, the continued freezing of commercial rates, an underpinning and pump-priming of our high streets, the extension of the Towns Fund beyond 101 locations and the expansion of business improvement districts? All these measures would help pump-prime and underpin not only retail but our wider business environment, which has had to endure the impact of Covid and the consequential financial restrictions, and a loss of income. In many instances, independent retailers and small businesses have had to compete with those much larger businesses that are currently operating, such as the large supermarkets—but they cannot compete because, in most instances, they are not allowed to.

So I hope the Minister can provide some answers today; if not, I hope he can provide some answers to me in writing.