Government response to the Corporate Insolvency & Governance Bill report

This is the government's response, published 19 June 2020.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government agrees to limit the clause 18, clause 22 and clause 39 delegated powers, but does not change the permanent provisions or the retrospective measures, saying it considers the latter an "exceptional case".

• On the clause 39 power to extend temporary provisions, the government agrees and "will add the condition recommended" so it can only be used to deal with the effects of COVID-19.
• On the clause 18 power, it agrees that restrictions should be put in place, adding a condition that the Secretary of State "must be satisfied of the urgency of the situation" before it is exercised. For clause 22, it will add a limit so the expiry date cannot be extended beyond 2 years after Royal Assent.
• On retrospective effect for wrongful trading, it does not amend the Bill as recommended, saying a retrospective presumption "would not cure the problem this measure seeks to address" and that the provisions "strike the right balance".
• On paragraph 7 of Schedule 10, it does not consider affected creditors to have suffered as a result of retrospective application, and notes that any contribution will be at the court's discretion.

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