Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020

Lord Blunkett Excerpts

Tuesday 27th October 2020 Grand Committee

[Lord Blunkett (Lab)]

My Lords, I chose to re-engage with the legislation—in which I played a part as the Bill passed through Parliament—to make just two very small points, which I am reinforcing from the time when I contributed originally.

My first point is to agree to and support the regulations, as I supported the Bill, but to draw the Minister’s attention to the fact that there has been some change since we last debated this. In terms of the geography of impact, the situation has dramatically changed. Areas have been designated tiers 1, 2 and 3. Those areas which have moved into tier 3, primarily in the north of England —in fact, wholly in the north of England, with the exception of Nottinghamshire—face interestingly contrasting challenges. Some businesses will of course benefit from the compulsory closure and the compensation and support that will therefore be available, both to individual employees and to the businesses themselves. That is to be welcomed. With tier 2, those businesses that are not mandated to close will feel the impact of what is, quite dramatically, a change in the economic activity in the area.

The area that I know best, which is the city of Sheffield and the Sheffield city region, moved into tier 3 from midnight on Friday evening. It is quite clear that the message that goes out, which affects people’s general activity levels, is that they should effectively be in lockdown. The consequence of that, and the economic change that it has brought, means that we will have a differential impact. I wonder whether the Minister would feel that there could be a differential date on the aspects of the legislation which relate to 31 December in particular, but also to 31 March. What leeway exists for the Government to be able to come back if that is necessary? If not, parts of the country will be hit in a very different way from the south. We are painfully aware, I think—and if we are not, we live in a cave in Derbyshire—of the real concern about the divide in our country and the impact that has.

My second point is about the level of debt overall, which has grown exponentially. Obviously, this legislation is intended to assist in terms of the immediate impact on business and the capacity to be able meet legitimate bills. I share the concern, articulated by the Minister, in relation to the supply chain. We have a real challenge there. I also feel that given the accumulation of the debt, it would be useful if he could say whether the Government have any plans to deal with the cliff edge and the transition from the legislation as it stands at the moment to the spring of next year. As it turns out, what has changed over these weeks is the apparent extension of the challenge of the virus, throughout the winter and into the spring of next year. Action must be taken to prevent the exact calamities that he referred to in moving this Motion.