Corporate Insolvency and Governance Bill

Lord Blunkett Excerpts

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

[Lord Blunkett (Lab) [V]]

My Lords, I concur with many of the comments that have already been made. I support the thrust of the Bill.

I want to talk about the immediate situation and, therefore, the moratorium. I welcome it but, like my noble friend Lord Stevenson, I think that, in its initial implementation, it is in danger of being too short to be meaningful to many small and medium-sized enterprises. It is about enterprise and entrepreneurship—that is, not just maintaining what we have now but encouraging and supporting those coming out of the virus crisis, as well as providing a bedrock for the future. Would the Minister be kind enough to say a little more about the intentions of using secondary legislation if the initial moratorium period is not to be extended in the Bill?

It would also be useful to know more about the positive role of insolvency practitioners, rather than their negative one. There is potential here to be extremely helpful to those who have a major part to play in the future of our economy but currently face a dangerous potential cliff edge if investors trigger their demise.

Mention has been made of corporate responsibility, not least by my noble friend; I agree in relation to employees but it also applies more widely. I wonder whether we could encourage larger companies to see their supply chain as crucial to them rather than sometimes exploiting their weaknesses, because this is very much about where power lies. I also wonder whether they could mentor and support as part of the recovery programme, and therefore be a positive gain.

I very much welcome at least temporary help with personal liability. For people taking up the opportunity to start a new business and those who are clinging on to survival by their fingertips, personal liability and the reputation that goes with it are important. If we can get this right and avoid those people who deliberately exploit the situation then come back in a different guise with exactly the same company—the bad eggs, to echo the reference made by the noble Baroness, Lady Neville-Rolfe—while ensuring that personal liability absolutely does not discourage people or create unnecessary fearfulness at this moment in time, that would be a very substantial step forward.

It is important that these measures, temporary as many of them are, are seen in the context of the long term. We should therefore see what works and try in future to build in those aspects that have been beneficial to both British enterprise and our wider social well-being.