Legislative Reform (Insolvency) (Advertising Requirements) Order 2009

My Lords, I thank noble Lords for their contributions to the debate. I sense some cynicism; perhaps we all become infected by it in the daily grind of politics, but I think that on this occasion it is misplaced. On the question of this measure coming before other instruments, the next order is expected to be laid by the end of this month or the beginning of the next. A point was raised about the effect on newspapers. Clearly the order will have cost implications for the newspaper industry in terms of lost revenue. These will vary according to the number of insolvent companies in a local newspaper’s locality. However, it is important to note that the measure does nothing to stop companies and liquidators continuing to advertise in local newspapers. That, in the view of the liquidator, is the most sensible thing to do. We are giving the insolvency practitioner—the liquidator—the freedom to decide what is in the best interest of the liquidation, the companies and the creditors. Companies in liquidation can therefore choose to advertise in a local newspaper if they consider it appropriate, using the new technologies and websites that are available. We think that the new regime is preferable to retaining a legislative provision which means that local newspaper adverts must be placed in every single voluntary liquidation without consideration of their actual effectiveness. In the consultation, we found that in 80 per cent of the cases, no creditors came forward, suggesting that there would be some value in a change of regime. I agree that this is a modest measure; the money amounts to only £3.4 million, but that sum will go to increasing the size of the pot of money available to creditors. The remuneration of insolvency practitioners, for example, has to be proved by the creditors; in that case, one can see no reason why costs should increase as a result of the change. Insolvency practitioners are ultimately answerable to the court for the conduct of the case. They are experienced members of a regulated profession. A licensing body can, in appropriate cases, investigate concerns about their professional conduct. Unsecured creditors, which would include many small businesses, are treated equally among themselves. By changing the insolvency rules, the order seeks to improve the transparency for creditors and provide additional information. If I have missed any points raised by noble Lords, I will happily write to them. There is some cynicism about this, but we have not taken the long-grass approach. We have promised—a promise we will fulfil—that further orders will be laid in a very short time. This is a modest proposal; it could have been allowed to wait for several months more, but it will make a useful difference to creditors who have already suffered losses. Why should we not bring in a measure, however modest, which will save money and assist in very difficult times? It also gives liquidators and companies a greater freedom to target their advertising effectively; it could be argued that that is one area where business is increasing, unfortunately, as companies go into liquidation. Therefore, there is no argument for delaying something we can do now. For those reasons, I believe that the order can be helpful to the business community and to creditors. I commend the order to the House. Motion agreed.