Corporate Insolvency and Governance Bill

Lord Blencathra Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Blencathra (Con) [V]]

My Lords, I have never considered my noble friend Lord Dobbs to be vulnerable to anything, but that is another matter.

I am honoured to be the chair of the Delegated Powers and Regulatory Reform Committee and we will consider the Bill tomorrow. Therefore, I cannot comment on what we might conclude but I want to inform the House that we will have a very important report to make on it, which noble Lords will wish to take into account for possible amendments in Committee. We hope to publish our report on Wednesday afternoon, so the noble Lord, Lord Stevenson of Balmacara, might wish to wait to see what we have to say. However, although I cannot say what our committee will decide, I anticipate that we might draw attention to the very large number of Henry VIII provisions—10 in the first 32 pages—and the very wide range of regulatory powers.

Speaking now in a personal capacity, I can say that I support the Bill. It is important that companies that are technically insolvent can get some breathing space to restructure, with the hope and expectation that they can carry on trading and resurrect themselves.

Although I support the need to make urgent legislation, all urgent legislation inevitably has flaws, which this House normally sorts out—if we have the time to do it. This Bill of 233 pages, one of the most complex we have ever seen, was rushed through the other place—all stages: Second Reading, Committee and Third Reading —in four hours, 45 minutes. The Committee stage to consider 47 clauses and 14 schedules took just 45 minutes. Our colleagues up the Corridor scrutinised this Bill at 12 seconds per page—surely a record. I know that we have a bit more time scheduled in this House, and the Bill must get better scrutiny than it did in the other place.

In the Explanatory Notes, the Government’s justification for all the regulation-making powers is that they might have to move at speed and do not want to bother Parliament. However, Parliament has ample time and can move at breakneck speed, as we are doing with this Bill. Emergency legislation is necessary on occasion and justifiable, and it is legitimate in this case, but that does not mean that every change in the future has to be rushed through by regulations, often using the negative procedure, when for major issues an Act of Parliament should be the norm. I agree with the important points made by my noble friend Lord Hodgson.

Finally, I am concerned about the provision in the Bill that a supplier has to continue supplying goods, with possibly no prospect of payment, to a company undergoing this procedure. If the company eventually fails, the supplier who was forced to continue supplying might not get any payment or will be behind a whole list of preferential creditors. We have all had the briefing note from R3, which says that HMRC is now legally the preferential creditor. The Government cannot have it all ways; they cannot compel a supplier to supply goods and then compel him to wait behind HMRC for payment. That is very unfair and, if I were a supplier, I would use the hardship excuse every time to cancel the contract if I was going to be stuck behind HMRC for payment.