UK bankruptcy laws will change to help businesses stay afloat during Covid-19 pandemic

28 March 2020, 16:33

The business secretary announced new bankruptcy laws for businesses
The business secretary announced new bankruptcy laws for businesses. Picture: PA
Nick Hardinges

By Nick Hardinges

UK bankruptcy laws will change in order to help struggling businesses stay afloat during the coronavirus pandemic, the business secretary has announced.

Alok Sharma was speaking alongside the national medical director of NHS England Professor Stephen Powis at the daily Downing Street coronavirus press conference.

The business secretary announced further measures to give businesses "greater flexibility" amid the Covid-19 outbreak, calling it an "unprecedented challenge" for UK businesses.

He announced that there will be new powers around insolvency and restructuring in order to help companies weather the storm.

Changes will include allowing businesses undergoing bankruptcy to continue to acquire materials in order to keep trading.

Mr Sharma thanked the "many businesses across the UK" who are playing a "key role in keeping the country going."

Mr Sharma was speaking alongside NHS England chief Professor Stephen Powis
Mr Sharma was speaking alongside NHS England chief Professor Stephen Powis. Picture: PA

"It is crucial when the crisis passes, as it will, we are ready to bounce back," he said, as he detailed measures to help businesses "emerge intact the other side of the Covid-19 pandemic."

"These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends whilst ensuring creditors get the best return possible in the circumstances," he continued.

Mr Sharma also confirmed that the government's Business Interruption Loan Scheme will launch on Monday.

The secretary of state detailed the help packages laid out by the government for businesses and employees and said he wants money to be with them "as soon as possible."

Administrative barriers to the production of hand sanitiser will also be removed, allowing more to be produced "in a matter of days."

"We are also introducing a range of measures to boost the supply of personal protective equipment, such as face masks, to protect frontline NHS staff," Mr Sharma announced.

Another measure announced on Saturday was companies that are required to hold annual general meetings will be able to do so flexibly in a matter compatible with public health guidance.

"This might include postponing or holding the AGM online, or by phone using only proxy voting," he said.

Prof Stephen Powis said theatres and recovery areas within hospitals will be used for treatment amid the outbreak, doubling the capacity of intensive care beds.

The medical chief said he is "confident the capacity is there and we have not reached capacity."

He said it is "absolutely critical" that testing for NHS staff is introduced in a bid to get people back to work and so that if they have had the virus, they will be immune.

Mr Sharma added that Prime Minister Boris Johnson held a video conference call this morning and will continue to lead "right from the front," despite testing positive for Covid-19.