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Unemployment in the UK

My hon. Friend makes his point well. In the next few weeks, we must all be careful not to use rhetoric against the financial services sector and the banks that ends up being counter-productive. The reality is that our banks play a crucial role in the fabric of our economy. The disappearance of credit facilities affects individuals and small businesses and could, as my hon. Friend rightly says, force otherwise good businesses into receivership. We wish the Government well in their efforts to ensure stability for our banking system. We also need protection in place for businesses that run into unexpected difficulties that, given time, they might be able to trade through. If the Government accept the principle behind our proposals, there are three elements to our plan. The first is to introduce an automatic stay of enforcement. That would prevent banks or other creditors from intervening immediately to enforce repayment of debt while the management stays in place and attempts to negotiate a restructuring. The second is to give a priority status for any financier willing to provide ongoing funding for the company post petition. Unlike in the UK, firms in chapter 11 in the US are able to raise finance even after they have petitioned for bankruptcy. Lenders will lend them money in exchange for ““super-priority”” over other unsecured creditors. In fact, there is a whole market for such rescue funding in the US. Introducing such a market in the UK could help to protect businesses and jobs.