§ 1. Mr. Ron BrownTo ask the Chancellor of the Duchy of Lancaster how many companies went into liquidation during 1987; and if he will make a statement.
§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude)The number of company insolvencies in Great Britain in 1987 was 11,645—about 22 per cent. less than in 1986.
§ Mr. BrownIs the Minister aware that some companies deliberately go bust in order to renege on their commitments to staff, customers and creditors in general? For example, does he know that Glendevon Carpets in my constituency did that not so long ago and that many people suffered? Indeed, the company went out of business and resurrected itself elsewhere under a different name. The people behind that move got off scot free—I do not mean that as a pun, because the matter is too serious. Do the Government have any ideas or proposals that may deal with that problem?
§ Mr. MaudeThe phenomenon to which the hon. Gentleman referred is well understand and, regrettably, does happen. It was addressed in the Insolvency Act 1985, which gives courts the right to disqualify directors if they are found to have been guilty of misconduct such as that.
About 64 directors have been disqualified in the past few months since the new regime came into force, and about 120 further applications are being made by my Department to the High Court for further disqualifications. I hope the hon. Gentleman is satisfied that it is a problem which we take seriously and have already addressed.
§ Mr. Andrew MitchellDoes my hon. Friend agree that it is not so much liquidations as new business start-ups that are the important figures? Does he agree that new business start-ups under the Government have been—
§ Mr. SpeakerOrder. The question is about liquidations.
§ Dame Elaine Kellett-BowmanI have a question about that.
§ Mr. SpeakerYes, later.