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Covid-19: Employment Support - Statement

Part of the debate – in the House of Lords at 12:38 pm on 19th March 2020.

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Photo of Lord Balfe Lord Balfe Conservative 12:38 pm, 19th March 2020

I wish to make a very minor but important point. At the moment, if a company is insolvent, the workers do not get paid. They can have worked for several weeks up to the date of insolvency but when insolvency comes, their pay is basically at the mercy of the receiver, or whoever is winding up the company. In the Statement the Minister said that any business that needs cash to pay salaries will be able to access a government-backed loan. In other words, a company that cannot pay salaries but is not becoming insolvent will apparently be able to access it. I know that in its submission to the Government the TUC has asked for a relaxation of the rules on insolvent companies, and I realise that it will probably be beyond the Minister’s pay grade to agree that that will be done, but will he agree to reflect to the Government that this point has been raised and possibly to write to let us know what has been decided? This is a small category, but companies are going to go bankrupt and workers may be denied their wages, while others in companies that have not gone bankrupt will be able to access a loan. It is a small point, but it is very important.