Covid-19: Small Businesses

Lord Sikka Excerpts

Wednesday 13th January 2021 Lords Chamber

[Lord Callanan (Con)]

I agree with my noble friend that, as soon as we possibly can, we need to lift these restrictions to get the economy moving again, but we are indeed facing a public health emergency at the moment, as he has said.

[Lord Sikka (Lab) [V]]

My Lords, SMEs are also destroyed by unfair insolvency laws, which enable secured creditors to walk away with most of the proceeds from the sale of a bankrupt business’s assets, leaving next to nothing for unsecured creditors, including SMEs. The Carillion bankruptcy affected nearly 30,000 SMEs. Will the Government consider legislating so that SMEs have a higher priority in corporate bankruptcies?

[Lord Callanan (Con)]

The noble Lord makes an important point, and, of course, we constantly review all these numbers. We last looked at the insolvency provisions in recent legislation, and it is always difficult to get the balance between different creditors right when there are insufficient funds available.