The Corporate Governance and Insolvency Act

First, I commend the Government on the UK Corporate Insolvency and Governance Act 2020 and for putting in place, at such speed, both temporary and permanent measures at such a deeply troubling time for businesses. My hon. Friend the Minister will be pleased, as I am, and possibly a bit surprised, as I am, to see that statistics from the Insolvency Service show that the number of registered company insolvencies in March 2021 was 20% lower than in the same month in 2020 and 37% lower than in March 2019. I certainly know of many businesses in my constituency that have survived the pandemic thanks only to the extraordinary measures put in place by the Department for Business, Energy and Industrial Strategy and the Treasury to help them get through.

In the call for evidence that is outstanding on the performance of CIGA, it will be interesting to see whether feedback from businesses suggests that they needed the temporary measures or the financial support, or both, and to what extent. Certainly, the evidence points to the fact that schemes such as bounce back loans, the coronavirus business interruption loan scheme and furloughing have done a critical job in protecting lives and livelihoods. There may be the need in the future for further flexibility and, I point out to the Minister, interest on coronavirus business interruption loans and potentially more support for weddings and events organisations may well be needed in future to protect them.

I briefly wanted to mention the bigger picture. The Minister will be only too aware that insolvency legislation is not like the proverbial London bus—we do not have none coming along for years and then lots all at once—so I worry that while there have been some good, permanent changes to the insolvency rules brought in with CIGA, there are nevertheless some areas, particularly of corporate governance, where, during my time in BEIS, I was keen to see real reform. I hope that the audit reform work that is under way and the forthcoming employment rights Bill might offer vehicles for wider corporate governance changes. In particular, I would be keen to have an update from the Minister on what is still being done at BEIS to consider some specific issues, such as the roles and responsibilities of directors, the speed of insolvency evaluations post-fact and consideration of the responsibilities of board directors. We have seen some major corporate failures in recent years, including companies such as BHS, Carillion and Thomas Cook, Toggle showing location ofColumn 422and very legitimate questions have been asked about the performance of the directors of those businesses, whose failures have had such a disastrous impact on lives and livelihoods.

There is also the very real question of whether companies should do more through new statutory responsibilities to protect employees’ pensions, to ensure diversity of the workforce and, of course, importantly, to address their carbon footprint. I hope that the Minister will be able to reassure me that these issues remain very live in his Department, and I would be keen to know, specifically, if he can point me to forthcoming opportunities to press these matters further.

In conclusion, I encourage all those who have an interest in the broader issue of corporate governance to take part in the current call for evidence on insolvency rules. It is a great opportunity for business owners and industry professionals to give their feedback on these two important areas. I hope that the imperative of putting in place excellent temporary measures to help businesses survive during the pandemic does not get in the way of consideration of the bigger picture of good corporate governance.