The Government should have renamed the Insolvency (No 2) Bill the Save British Jobs bill, because that is what it is all about. The bill reverses the Appeal Court ruling on Paramount under which receivers themselves become liable, two weeks into a company rescue, for employees' full contracts - forcing them, in effect, to sack entire workforces rather than try to save sound parts of failed businesses.
But the bill does nothing to protect receivers from past claims from employees, concerning their contractual entitlements, stretching back to 1986.
Three MPs - Stuart Bell for Labour, Malcolm Bruce for the Liberal Democrats and Neville Trotter for the Conservatives - tried to backdate the bill on Monday, but the Trade Minister Neil Hamilton rejected it on the grounds that retrospective legislation is unconstitutional and plays havoc with people's rights. A similar amendment proposed yesterday in the Lords received short shrift.
The second flaw in the bill is that, by a departmental oversight, it fails to cover a whole sector of receivers, either for past or future cases. These are Law of Property Act receivers, professionals who secure single assets like offices and hotels on behalf of banks and building societies.
The two flaws mean that accountancy firms may face so many claims that they collapse, and rescuing office blocks and hotels will now become virtually impossible.
The best solution would be if the Paramount appeal can be overturned in the Lords, as Paramount's administrator, Touche Ross, intends. But this could take months, and the Lords may decide to be pedantic rather than public- spirited.
The second solution is for Mr Heseltine to launch another emergency bill that would protect receivers from past claims and extend that protection to LPA receivers. He should think again. A failure to do so could cripple the smaller accountancy firms that handle receiverships, and cost thousands of jobs by undermining the culture of rescue. And that would not help the recovery.