Chamber boss welcomes Government’s move to relax insolvency rules

Dr Kelly - businesses will welcome the government’s sensible steps to amend insolvency laws to help protect companies weakened by the impact of the coronavirus.

THE Hull & Humber Chamber of Commerce’s Chief Executive Dr Ian Kelly has welcomed the Governments moves to change elements of the insolvency system to help Humber businesses keep trading through the Coronavirus crisis.

Business Secretary Alok Sharma told workers and business leaders that he “appreciates just how tough the situation is and they are delivering for our nation through this difficult time.”

He also announced that there will be changes to elements of the insolvency system to help UK companies keep trading and that legislation will be introduced soon to allow UK companies to “weather the storm” of the virus.

There will be a temporary suspension of “wrongful trading” rules which make it a criminal offence for a company director to keep on trading if they know the business is unable to repay its debts.

Companies required to hold annual general meetings will also get help – either being able to postpone or hold the AGM online.

Mr Sharma also said that workers can now defer their annual leave for another two years. “This will protect staff from losing out, while providing businesses with flexibility when they need it most.”

He added that banks are processing thousands of applications for loans designed to help businesses with an annual turnover below £45-million and he stated that local authorities are beginning to receive funds in order to distribute as grants to small and medium businesses.

Commenting on Business Secretary Alok Sharma’s announcement on the relaxation of the insolvency rules, Dr Kelly said: “Businesses will welcome the government’s sensible steps to amend insolvency laws to help protect companies weakened by the impact of the coronavirus.

“It is right that the rules on wrongful trading are temporarily suspended to ensure that directors are not penalised for doing all they can to save companies and jobs during this turbulent period.

“Companies that were viable before the outbreak must be supported to ensure they can help power the recovery when the immediate crisis is over.

“Cashflow remains an urgent concern for many businesses, so it’s vital that government support packages reach businesses and people on the ground as soon as possible.”