Draft Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2017

Jonathan Reynolds Excerpts

Monday 5th February 2018 General Committees

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is lovely to see you in the Chair this evening, Mr Hosie. I thank the Minister for his introduction to the regulations. It is a sad fact that more and more individuals and businesses are dealing with problem debts, and the robustness of all our insolvency systems is of the utmost importance.

As I understand it, the regulations enable financial services firms to be covered within the provisions of the Small Business, Enterprise and Employment Act 2015. Those provisions make insolvency proceedings more flexible by allowing, for example, for different approaches to creditors’ meetings and the receipt of notice by creditors about insolvency proceedings. The regulations either directly implement the requirements or disapply the 2015 Act to enable sufficient time to design appropriate mechanisms, as the Minister said, for financial sectors where it will be more complex to apply the requirements to existing insolvency provisions.

I completely understand the fairly reasonable points made by the Minister about holding a physical meeting, which is often neither practical nor appropriate given the modern methods of communication now available and given that insolvency proceedings are not now purely local matters as they would have been in Victorian times, when the insolvency regime was initially created. Furthermore, it is peculiar that office holders must produce and dispatch information to creditors even if they have no continuing interest in an insolvency and have already written off their debt. The opt-out regime allows for those with an interest to continue to receive notices regardless. The 2015 Act’s amending of the Insolvency Act 1986 to reflect that seems appropriate—we have no objections to that—as does the application of the 2015 Act’s requirements to financial firms.

My only request of the Minister is in relation to his point on disapplying the 2015 Act’s provisions while the Treasury strives to produce the new measures and the impact assessment as quickly as possible. If he could give us some sense of the timings that the Treasury has in mind, that would be particularly useful and appropriate.