Key Facts

• The government has provided over £10 billion in grants to small businesses.
• Over £14 billion has been paid out through bounce-back loans.
• The Bill allows for the extension of temporary measures by statutory instruments.
• The Bill includes measures supported by business representatives' organisations.
• Temporary provisions will be in place for one month after Royal Assent.
• A moratorium provides companies threatened with insolvency a chance to arrange refinancing or rescue, initially lasting 20 days and extendable.
• The moratorium measures will be in place for a month after Royal Assent and can be extended if necessary.
• Companies can propose rescue plans as long as certain thresholds are met, sanctioned by the court, and not making dissenting creditor classes worse off than the next most likely outcome.
• Termination clauses will prevent suppliers from terminating contracts or raising prices due to insolvency, with exemptions for small suppliers during the pandemic based on criteria from the Companies Act 2006 (up to 50 employees, £10.2 million turnover, and £5.1 million gross assets).
• The suspension of serving statutory demands and restriction on winding-up petitions will be retrospective from 1 March and 27 April respectively.
• Small suppliers are exempted during the pandemic.
• Wrongful trading provisions suspended from March 1 until one month after Royal Assent.
• Companies can hold AGMs and other meetings digitally or postpone them until September 30, 2020.
• The Bill allows extensions to filing requirements deadlines for accounts, confirmation statements, event-driven updates.
• Extensions to charge registration period at Companies House is set to 31 days.
• The Bill aims to help reduce insolvencies during a potential recession necessitated by public health measures.
• One-fifth of businesses temporarily paused or ceased trading during lockdown and another quarter reported turnover down by at least 50%.
• The Bill includes permanent measures like moratoriums, preventing suppliers from sending firms into liquidation, suspending ipso facto provisions, and temporary measures such as removing threats around winding-up orders.
• There is a need for proper safeguards in the restructuring plan provision to protect employees' rights including pensions.
• Miliband's new clause 5 aims to ensure mandatory consultations between companies and trade unions during restructuring.
• The proposal is to reserve 30% of the proceeds from the sale of assets for unsecured creditors, removing a financial limit on this provision.
• Pension schemes should be prioritised as creditors in cases of insolvency.
• The current provision allows up to 20% recovery for unsecured creditors with a limit of £800,000.
• Labour proposes increasing the proportion to 30%, removing the limit but ensuring it does not affect secured creditors.
• In 2018, the Government consulted on corporate governance safeguards in response to scandals at Carillion and Thomas Cook.
• The CLBIL scheme has provided loans of over £45 million but only £1 billion out of £9.6 billion requested.
• Only 191 firms have received loans compared to 579 applications.
• Up to 40% of Britain's pubs cannot survive beyond September without additional support.
• One third of jobs in tourism-related areas are at risk.
• 70% of the 290,000 jobs in the theatre sector are estimated to be at risk.
• The Bill introduces a 20-day moratorium period which can be extended up to a year with court approval.
• Monitors oversee the moratorium process and must assess whether it is likely that the moratorium would result in rescuing the company as a going concern.
• A change from 'would' to 'could' might help in rescuing more companies.
• The speaker mentions a constituency case involving a design business owed £36,000 by an individual.
• R3, the industry insolvency practitioner, warns that making HMRC a preferred creditor could negatively impact business rescuing and lending in the UK.
• Clause 95 of the Finance Bill reintroduces HMRC as a preferential creditor.
• £30 billion has been lent through both schemes.
• £9 billion through the CBILS and £21 billion through bounce-back loans.
• Wimbledon and Putney Commons is a charity set up in 1871 by an Act of Parliament.
• UK Finance estimates that HMRC preferential status could hit business lending by over £1 billion per annum.
• The scheme has failed to reach many people who need it.
• The Scottish National party supports calls for overdrafts, direct grants and/or equity investments for firms unable to access finance.
• Public confidence is critical for businesses to continue trading.
• The Bill introduces significant changes to insolvency rules not seen in over 20 years.
• Practitioners have noted that detailed scrutiny is needed due to the complexity of the proposals.
• The bill includes two complicated proposals published only a day before recess, totaling 170 pages.
• The remaining provisions were not consulted on despite raising serious issues of principle.
• The Bill includes measures on wrongful trading, statutory demands, winding-up petitions.
• More than one in five companies across the UK have been forced to temporarily cease trading.
• Some sectors are expecting high business closures and may need bespoke support.
• The speaker declares interests in the aerospace and transport sectors.
• A comprehensive recovery and growth plan will be introduced before the summer recess.
• Extensive work was done by the BEIS Committee on corporate governance reforms following Carillion and Thomas Cook collapses.
• The Corporate Insolvency and Governance Bill aims to help businesses during the pandemic.
• It includes corporate governance measures giving directors more flexibility.
• The north-west will face a potential economic slump of up to 10% according to KPMG, but Deloitte notes that it is also the most optimistic region for recovery.
• The UK steel industry employs 32,000 people.
• It contributes £3.2 billion to mitigating our balance of trade deficit through exports.
• Each job pays on average 28% higher than the average UK job.
• Tata Steel in Port Talbot asked for a loan of £500 million to cover its cash flow black hole caused by coronavirus.
• Project Birch aims to support larger companies that did not qualify for the business interruption loan scheme.
• 80% of manufacturing companies have seen orders fall.
• 20% of manufacturing companies have seen their order books halved.
• The Bill provides a moratorium during which no legal action can be taken for up to two months.
• Companies will receive a payment holiday during the moratorium period.
• The Bill guarantees suppliers will be paid once a monitor agrees on continued trading.
• Small companies are exempt from certain provisions in the Bill.
• Directors face concerns over personal liabilities if they continue to trade despite worsening financial conditions.
• The Bill includes provisions like providing insolvency breathing space and protection from creditor action.
• It temporarily relaxes rules surrounding meetings and filings for companies.
• The measures will expire in about 27 days if approved, necessitating extensions to September or end of the year.
• Clause 4 inserts new part 1A into the Insolvency (Northern Ireland) Order 1989 with similar provisions as GB.
• Clauses 11, 14 to 17 address liability for wrongful trading and termination clauses.
• The hospitality sector is losing much of its summer season revenue.
• Up to 1,400 players may be released without being re-signed.
• Clubs supplement their income through advance sales for the following season in June and July.
• Football clubs are struggling due to loss of income from no games being played.
• The Premier League is expected to lose £300 million in broadcasting revenue this season.
• Transfer liabilities exceed £1 billion.
• Clubs should be supported as community businesses.
• An independently run fund with public and football body money could acquire minority stakes in clubs.
• Independent directors can provide oversight of club finances.
• Football needs an independent financial authority to oversee spending.
• The statement addresses actions taken by Parliament 72 days ago to close down parts of the economy.
• The Corporate Insolvency and Governance Bill seeks to address the extreme consequences of these measures.
• Questions raised include maintaining UK's reputation for attracting foreign investment, updating annual accounts filing requirements, and considering employee protections.
• Richard Fuller questions if the Bill changes the requirement for unanimous consent among creditors to a majority vote.
• The MP inquires if temporary clauses will sunset automatically or require further statutory instruments.
• Concern is raised about the cost of debt under new arrangements, suggesting it might increase due to higher risk perception.
• HMRC's role as a preferred creditor and its treatment of businesses are highlighted with skepticism.
• The speaker acknowledges the effectiveness of UK government measures during the economic consequences of the virus.
• The speaker raises concerns about going concern judgments by auditors and advises caution regarding potential risks.
• The speaker mentions the need for more details on the role of monitors under the Bill.
• The average forecast for quarterly GDP growth in Q2 (April-June) was 16% based on Her Majesty’s Treasury’s survey.
• Northern Ireland has the highest rate of temporarily paused business trading at 25%, compared to London and the south-east with 16%.
• 78% of businesses are continuing to trade, while 20% have temporarily closed or paused trading.
• The largest fall in turnover was in accommodation and food services.
• CBILS and BBLS are a success but face issues with banks assessing viability based on pre-crisis conditions.
• There is a need for a single, truly independent regulator for insolvency practitioners.
• Conflicts of interest arise when insolvency practitioners appointed by major creditors (often banks) work in the interests of those appointing them rather than all creditors.
• Case study of Arthur Holgate and Son highlights improper administration by Deloitte and Barclays leading to loss of business and assets.
• Deloitte perjured itself in court regarding insolvency issues.
• The current regulation of the sector is through self-regulation.
• A single regulator—an ombudsman—is proposed to regulate professional bodies.
• Businesses should be allowed to challenge the appointment and approach of an insolvency practitioner.
• Large companies like Boots and WHSmith are abusing winding-up orders and forfeiture rights.
• The Bill provides a formal breathing space for businesses to restructure.
• The speaker mentions cross-class cram-down as an aspect of the bill that needs further consideration.
• Schemes of arrangement under moratorium processes take at least three months.
• The shadow Business Minister reiterates support for the Bill's objectives.
• Labour believes preventing insolvencies now will avoid future waves of bankruptcies.
• A second wave of support is required to rescue more businesses and ensure a strong recovery.
• Businesses are asking for more discretionary grant funding, flexibility with furlough schemes, and simplification of CBIL schemes.
• The Corporate Insolvency and Governance Bill aims to provide support for businesses during and after the COVID-19 crisis.
• The bill includes permanent and temporary changes to insolvency law and corporate governance.
• Support from business organizations such as the Institute of Directors and Federation of Small Businesses is mentioned.
• The Minister has a limited time in which to speak.
• Temporary suspension of wrongful trading liability.
• Prohibitions on creditors filing statutory demands and winding-up petitions for COVID-19-related debts.
• Launch of the bounce-back loan scheme providing up to £50,000 loans in days with over 700,000 applications approved by the time of statement.
• Chris Bryant raised concerns about the timing of parliamentary motions.
• Karen Bradley had tabled an amendment but withdrew it.
• Valerie Vaz initially opposed the motion but agreed to withdraw her amendment after further discussions with the Government.