Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what plans the Government has to secure payments to subcontractors and suppliers owed money for work undertaken for Carillion prior to its liquidation; and whether he has made an assessment of the potential merits of amending the Insolvency Act 1986 to protect small and medium-sized enterprises.

Decisions regarding payments to subcontractors and suppliers to Carillion are the responsibility of the court-appointed Official Receiver. In his role as liquidator, the Official Receiver is an officer of the court and independent of Government.

The Government has also taken swift action to put in place support to those affected by this insolvency event. The Banks have made provision for nearly £1 billion of support to those affected and the British Business Bank will provide support of up to £100 million of lending to small businesses through its Enterprise Finance Guarantee programme. HMRC will provide practical advice and guidance to those who were contracted to Carillion and are now concerned about their ability to pay tax.

In its response to the Insolvency and Corporate Governance consultation on 26 August 2018, the Government announced that it will increase the current £600,000 cap on the proportion of funds that can be ring-fenced and paid over to unsecured creditors, including small and medium-sized enterprises, ahead of the usual order of priority in an insolvency. The increase will be in line with the impact of inflation on the current cap since it came into effect in 2003, increasing the cap to approximately £800,000.