Senedd approves emergency insolvency law to protect social landlords

(Title Image: Pixabay, Copyright Free)

The Welsh Government has recommended that the Senedd grants its consent to the UK Parliament’s Corporate Governance & Insolvency Bill (pdf).

Reforms to UK insolvency laws have been in the pipeline for several years, but the law has been brought forward (it’s already cleared the House of Commons) as it’s believed it would help companies facing serious financial problems caused by the coronavirus pandemic.

The Bill will give businesses otherwise facing the prospect of bankruptcy more time (a moratorium) to develop rescue plans, more protection from creditor action and eases requirements for AGMs and company filing.

However, there have been concerns that the Bill will allow companies to run roughshod over workers rights – such as firing and rehiring on lower pay and changing pension agreements.

While insolvency law is non-devolved, the Senedd has been asked for its permission because Registered Social Landlords (RSLs) – which may be community benefit societies or charitable incorporations – are companies liable to insolvency proceedings.

RSLs operate within Welsh law, with the Welsh Government often being involved in insolvency proceedings involving RSLs. The Welsh Government will be given some powers in the Bill to regulate moratoriums for RSLs.

The Bill isn’t expected to have any major financial impact on the Welsh Government other than the cost of producing new regulations.

MSs unanimously agreed the memorandum on 10th June 2020.

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