Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)

Marie Rimmer Excerpts

Committee stage
Tuesday 6th July 2021 Public Bill Committees

[Jeff Smith]

Q I am trying to get a picture of the scale of the issue. You mentioned that the Insolvency Service was involved in about 1,0000 cases in the last year. I appreciate that you said that that is a low number for the year. Then you said that there may be around 2,000 cases where the powers to investigate currently do not exist. That sounds like a significant increase in work for the Insolvency Service, and I wonder whether you think that it will be able to cope.

Stephen Pegge: I am not close enough to its work and resource. One thing that I would say is that the Insolvency Service has very good experience in these sorts of investigations. I would also say that the other element of work, if it has found problems that meet the threshold of evidence and it takes action to disqualify a director, does not necessarily need to involve a court process. In most cases, the Insolvency Service will be successful in getting an undertaking from the director involved to be disqualified. It then has the powers to put that into effect, but certainly people may want to consider whether the resources are sufficient to deal with the case.

The other point is that these are situations where dissolution has been successful. We are also looking to these measures to act, to a certain extent, as a deterrent, in order to make it less attractive for those looking to abuse the system to try it on, as it were. So it may be that this event becomes less frequent in due course.

In fact, one of the processes that is clearly available is for creditors to object to an application for dissolution—and, indeed, the Insolvency Service at the moment is also able to object—on the basis of complaints at that earlier stage, where they have evidence of doing so. And because of evidence of significant numbers of attempts here, those objections have been done on a mass basis.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

Q Good morning, Mr Pegge. Clause 2(14) states that the provisions

“have effect in relation to conduct…occurring, and in relation to companies dissolved, at any time before, as well as after, the passing of this Act.”

Do you support making these provisions retrospective and, if so, how should the Insolvency Service make use of these retrospective powers?

Stephen Pegge: As I understand it, the support for this measure was confirmed as early as 2018 and it has really been a lack of parliamentary time that has made it difficult for it to be put in place. Given that we are aware of abuse that has happened in the meantime, I support this measure being retrospective. I appreciate that that retrospectivity is not often applied to such Bills, but we are talking about a fairly high evidence threshold and about situations where natural justice would support this measure being made with retrospective effect.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

Q It is good to see you again, Stephen. That is an interesting point about the retrospective nature of the measure, given what you were saying about businesses taking on more debt throughout the pandemic. Obviously, the insolvency practitioners will work through things, as you have rightly said, in order of public interest. What do you think they may look to do to give lenders confidence, by approaching the pandemic response finance first?

Stephen Pegge: Clearly, when lenders are undertaking a credit assessment, they will consider both the willingness to repay and the ability to repay, the probability of default and the loss in the event of default. All those could potentially be, and I would say probably at the margin, factors that could be influenced by the use of dissolution as a means of avoiding liability.

Quite clearly, it is very difficult for a company that has been struck off the register to make payments under a loan, so there will be the avoidance of debt in those circumstances. Given that currently there is time and cost involved in restoring a company to the register, the ability then to take this action against directors after the event both to deter and, if the activity should still carry on, to investigate and take action against directors in a more timely and cost-effective way should reduce the ultimate losses to creditors. I think there has been an estimate that creditors could be saved around £1 billion as a result of this measure, which would be significant in terms of credit assessments.

The net effect is the ability to provide more finance with less time having to be spent on assessment up front, on better terms, and in circumstances that should help the recovery. However, I will emphasise, Minister, that this is only one factor and it is all operating at the margin. Nevertheless, it is certainly something that during the past year has become a matter of concern, especially in relation to bounce back loans.

Towns Fund

Marie Rimmer Excerpts

Thursday 4th February 2021 Commons Chamber

[Ms Marie Rimmer (St Helens South and Whiston) (Lab) [V]]

Like many towns, St Helens has been through good times and bad. We were at the heart of the industrial revolution when we were home to the first industrial canal, and we remain the home of glass. The security glass in the Chamber was produced in St Helens. We are also the home town of the best rugby league team in the country, which I make no apology for mentioning once again. We are a proud town with a welcoming community, yet there is no denying that the past decade has been tough for the town. The impact of austerity is still felt, and the last year has made things worse. The last year has thrown a brick through an already shattered window.

There are problems with the fund, particularly with transparency and with how fairly it is being distributed, but at its heart it is a good thing and the right thing to do. The UK has the most regionally unbalanced economy in Europe, and it is not sustainable to continue like this. Even Germany, which spent the majority of my lifetime as two separate countries, the eastern part of which suffered from poverty and severe economic difficulties, has less inequality than Britain today.

People in towns in the north have felt abandoned and forgotten for too long, and rightly so. The next few years present both challenges and opportunities. The economic woes that our town and many others have experienced will hasten changes that were already happening. The world and the economy are changing, and we must adapt with it. The recovery from this crisis will be green, and it will be global. It must and will bring good-paying, high-skilled jobs to the areas that need them.

I have had the honour of sitting on St Helens town deal board. Last week, we finalised and submitted our proposal. Being green and being global is at the heart of it. The centrepiece of our bid is Glass Futures, a research and development facility. Glass Futures will work with the global glass industry and supply chain. It will bridge the gap between research and development and implementation. As our economy recovers in a green and global way, glass will be the low-carbon global material of choice. Glass is more than just windows. In fact, I am seen today through a piece of glass that almost every screen contains. The whole country has spent the past year looking at friends and family through sheets of glass in their phones or computer screens.

The global centre of excellence in the proposal will put St Helens at the heart of the global glass industry, and we ask the Government to support this as part of the global Britain strategy. A few months ago, I was pleased to welcome the Secretary of State to attend our town board to hear about our proposals. As an MP, I cover two boroughs, St Helens and Knowsley, both of which deserve and need investment. I urge the Minister to fight on our behalf and on behalf of all the towns in the country, to get the funding needed, so that all towns can get their fair share of investment.