Insolvency Act 1986 Part A1 Moratorium (Eligibility of Private Registered Providers) Regulations 2020

Lord Bhatia Excerpts

Friday 24th July 2020 Lords Chamber

[Lord Bhatia (Non-Afl) [V]]

My Lords, in these difficult times, private registered providers should be protected. They could suffer losses due to the coronavirus affecting their tenants, who are unable to pay their rents, but the tenants should also be protected from being evicted. This provision will protect the tenants in their houses, along with providers such as housing associations and registered providers.

However, I wish to talk about the insolvency Act on the wider stage. During these difficult times, many businesses are suffering as they are having to deal with decreasing numbers of customers. Existing customers are unable to repay their debts; this poses cash flow problems for the companies, which in turn are unable to pay their creditors. It is a very vicious circle. The Act stops the creditors from taking legal action against such companies and forcing them into insolvency. Often, such companies are unable to pay their VAT and taxes to the Inland Revenue, which often takes priority over all other creditors. This Act is in some ways identical to the Chapter 11 legislation in the USA. This provision will allow many good companies the time to survive, as it will enable them to raise finance from other sources while finding new customers in the UK and abroad.