To ask the Secretary of State for the Home Department, what assessment she has made of trends in the level of businesses issued with fines for employing illegal workers (a) dissolving and (b) liquidating before fines are paid.

To ask the Secretary of State for the Home Department, what assessment she has made of trends in the level of businesses issued with fines for employing illegal workers (a) dissolving and (b) liquidating before fines are paid.

Key information on company insolvencies including administration and liquidation, and how to get money back from an insolvent company.

Key information on company insolvencies including administration and liquidation, and how to get money back from an insolvent company.

To ask the Chancellor of the Exchequer, what consideration she has given to the potential merits of extending the exemption of assets liable for inheritance tax payable in yearly instalments to investments in companies in administration or liquidation.

To ask the Chancellor of the Exchequer, what consideration she has given to the potential merits of extending the exemption of assets liable for inheritance tax payable in yearly instalments to investments in companies in administration or liquidation.

To ask the Secretary of State for Business and Trade, what recent assessment his Department has made of the practice of voluntary liquidation by companies with (a) liabilities and (b) outstanding contractual obligations that begin operations under another name.

To ask the Secretary of State for Business and Trade, what recent assessment his Department has made of the practice of voluntary liquidation by companies with (a) liabilities and (b) outstanding contractual obligations that begin operations under another name.

My Hon Friend the Minister of State (Sarah Jones MP) has today made the following statement.

I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.

Speciality Steels UK LTD (SSUK), part of Liberty Steel Group, and the third...

My Hon Friend the Minister of State (Sarah Jones MP) has today made the following statement.

I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.

Speciality Steels UK LTD (SSUK), part of Liberty Steel Group, and the third...

I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.

Speciality Steels UK LTD (SSUK), part of Liberty Steel Group, and the third largest steel manufacturing company (by capacity) in the UK was issued with a winding up...

I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.

Speciality Steels UK LTD (SSUK), part of Liberty Steel Group, and the third largest steel manufacturing company (by capacity) in the UK was issued with a winding up...

To ask His Majesty’s Government what assessment they have made of the reasons for the reported rise in corporate liquidations in the year to 31 March 2025.

To ask His Majesty’s Government what assessment they have made of the reasons for the reported rise in corporate liquidations in the year to 31 March 2025.

My Lords, in the year to 31 March 2025, total corporate liquidations rose by 8%. This increase was driven by a 36% jump in solvent liquidations, while insolvent liquidations fell by 3%. The current corporation insolvency rate remains less than half what it was during the 2008-09 recession. Businesses go into liquidation for various reasons—tight cash flow, falling sales and loss of market share to online rivals—but no single factor dominates. Compulsory liquidations have increased mainly due to the increase in winding-up petitions from creditors, mainly from HMRC.

My Lords, in the year to 31 March 2025, total corporate liquidations rose by 8%. This increase was driven by a 36% jump in solvent liquidations, while insolvent liquidations fell by 3%. The current corporation insolvency rate remains less than half what it was during the 2008-09 recession. Businesses go into liquidation for various reasons—tight cash flow, falling sales and loss of market share to online rivals—but no single factor dominates. Compulsory liquidations have increased mainly due to the increase in winding-up petitions from creditors, mainly from HMRC.

The Minister is right: in fact, more than 2,000 businesses have faced winding-up petitions this year, the highest rate since 2012. Today, we learn that the number of payrolled employees has fallen by 274,000 over the past year, and most worryingly by 109,000 just this month past. The Institute of Chartered Accountants has predicted that eye-watering costs to business, particularly tax costs, will lead to more job losses. Does the Minister agree with me that as every single Labour Government have left office with unemployment higher than when—

The Minister is right: in fact, more than 2,000 businesses have faced winding-up petitions this year, the highest rate since 2012. Today, we learn that the number of payrolled employees has fallen by 274,000 over the past year, and most worryingly by 109,000 just this month past. The Institute of Chartered Accountants has predicted that eye-watering costs to business, particularly tax costs, will lead to more job losses. Does the Minister agree with me that as every single Labour Government have left office with unemployment higher than when—

Oh!

Oh!

Noble Lords may groan. As every single Labour Government have left office with unemployment higher than when they came to office, now is the time to reduce tax, which is at an all-time record high for businesses, particularly SMEs, before the next election.

Noble Lords may groan. As every single Labour Government have left office with unemployment higher than when they came to office, now is the time to reduce tax, which is at an all-time record high for businesses, particularly SMEs, before the next election.

My Lords, of course these are disappointing figures, but six months after launching Get Britain Working we are seeing real results, with economic activity at a record high, half a million more people in jobs since we took office and real wages having grown more since July than at any other time in the last decade. It is also worth noting that the latest GDP figures tell a very different story, up 7% in Q1 of this year, showing the UK economy’s resilience and potential. These indicators suggest a labour market that remains robust and responsive, not one that is being held back.

My Lords, of course these are disappointing figures, but six months after launching Get Britain Working we are seeing real results, with economic activity at a record high, half a million more people in jobs since we took office and real wages having grown more since July than at any other time in the last decade. It is also worth noting that the latest GDP figures tell a very different story, up 7% in Q1 of this year, showing the UK economy’s resilience and potential. These indicators suggest a labour market that remains robust and responsive, not one that is being held back.

My Lords, does the Minister agree that what was worrying about the liquidation numbers in 2024 was the increase in compulsory liquidations? That came ahead of the NICs increases, so it is a real red flag. The businesses that I speak to are desperately depending on the industrial strategy to restore their prospects. Can the Minister assure the House that the IS will include a focus on small businesses, including opportunities for government procurement? Will the Government reverse their policy of demanding that SMEs cede ownership of their intellectual property if they enter into even a small government contract?

My Lords, does the Minister agree that what was worrying about the liquidation numbers in 2024 was the increase in compulsory liquidations? That came ahead of the NICs increases, so it is a real red flag. The businesses that I speak to are desperately depending on the industrial strategy to restore their prospects. Can the Minister assure the House that the IS will include a focus on small businesses, including opportunities for government procurement? Will the Government reverse their policy of demanding that SMEs cede ownership of their intellectual property if they enter into even a small government contract?

My Lords, I assure the noble Baroness that we will publish our industrial strategy very soon, and it will definitely cover SMEs. As I mentioned earlier, compulsory liquidation is not something new. Companies go bust. We have seen big companies fail. Failure is a reality of business. Even major firms such as Ted Baker, The Body Shop and Wilko have collapsed. We should be thinking about how to support these corporate failures. We must have a more robust system, whether it is the credit system that needs reforming or even British banks. We must incorporate the American culture. Yes, we have to address failures, but more important is how we get up, dust ourselves down and get on to the business market again.

My Lords, I assure the noble Baroness that we will publish our industrial strategy very soon, and it will definitely cover SMEs. As I mentioned earlier, compulsory liquidation is not something new. Companies go bust. We have seen big companies fail. Failure is a reality of business. Even major firms such as Ted Baker, The Body Shop and Wilko have collapsed. We should be thinking about how to support these corporate failures. We must have a more robust system, whether it is the credit system that needs reforming or even British banks. We must incorporate the American culture. Yes, we have to address failures, but more important is how we get up, dust ourselves down and get on to the business market again.

My Lords, does the Minister accept that some of these business closures, particularly for SMEs—where payroll is their largest expense—were triggered not only by the scheduled increase in NICs but by the steep hikes in the national minimum wage? As the noble Lord pointed out, this was demonstrated by the very disturbing falls in payrolled staff and vacancies reported by the ONS. The resulting squeeze on their cash flow may cause a further spike in the rate of liquidations through Q2 and Q3. How does this sit with the Government’s claim to have “restored economic stability”?

My Lords, does the Minister accept that some of these business closures, particularly for SMEs—where payroll is their largest expense—were triggered not only by the scheduled increase in NICs but by the steep hikes in the national minimum wage? As the noble Lord pointed out, this was demonstrated by the very disturbing falls in payrolled staff and vacancies reported by the ONS. The resulting squeeze on their cash flow may cause a further spike in the rate of liquidations through Q2 and Q3. How does this sit with the Government’s claim to have “restored economic stability”?

The noble Lord makes an interesting observation that I do not share. First, there is no empirical evidence to suggest that NICs or business rates changes are primary reasons for any of these closures in the UK. I can give examples of businesses that are doing very well. Let us look at the hospitality business. I just looked at the latest results for JD Wetherspoon, which had revenue of £2.2 billion and EBITDA of £19.28 million. Stonegate, one of the largest pub companies in the UK, had revenue of £1.75 billion and EBITDA of

£394 million. These are not companies that are in trouble. The picture is mixed. Yes, we have some contraction in the business sector, but businesses are thriving. Do not listen to me. Listen to people such as the president of Blackstone, who this week said:

“I would give the UK Government a lot of credit for embracing business”.

The noble Lord makes an interesting observation that I do not share. First, there is no empirical evidence to suggest that NICs or business rates changes are primary reasons for any of these closures in the UK. I can give examples of businesses that are doing very well. Let us look at the hospitality business. I just looked at the latest results for JD Wetherspoon, which had revenue of £2.2 billion and EBITDA of £19.28 million. Stonegate, one of the largest pub companies in the UK, had revenue of £1.75 billion and EBITDA of

£394 million. These are not companies that are in trouble. The picture is mixed. Yes, we have some contraction in the business sector, but businesses are thriving. Do not listen to me. Listen to people such as the president of Blackstone, who this week said:

“I would give the UK Government a lot of credit for embracing business”.

My Lords, is it not the case that under the last Government we nearly had bankruptcy in the economy, we had very low levels of growth and we had poverty wages? Is it not time for them to have a period of silence?

My Lords, is it not the case that under the last Government we nearly had bankruptcy in the economy, we had very low levels of growth and we had poverty wages? Is it not time for them to have a period of silence?