§ Sir David Priceasked the Secretary of State for Trade and Industry why the Government have decided not to implement the recommendation of the Cork committee contained in chapter 32, paragraph 1450, subsections (b) (c) (e) and (g) of its report (Cmnd. 8558, in part I) to schedule 5 of the current Insolvency Bill [Lords] relating to the substantial reduction in the number and extent of the claims of preferential creditors.
§ Mr. Fletcher:The reasons why the Government decided that they were unable to accept the recommendations of the Insolvency Law Review Committee to which my hon. Friend refers were explained in the White Paper "A Revised Framework for Company Law" (Cmnd. 9175, February 1984). The principal reason relates to the significant difference between tax and non-tax debts; the former are imposed by law whereas the latter are incurred by agreement. The revenue collection departments and the local authorities are involuntary creditors, and consequently differ from other creditors in that they can not choose their debtors. In the Government's view, the retention of certain preferential rights is needed to compensate for this and for other relative disadvantages which we described in the White Paper.