Ministers have drawn up plans to disqualify or fine directors who try to walk away from payroll or pension liabilities.

Proposals from the Department for Business, Innovation and Skills would give the Insolvency Service new powers to punish bosses who leave debts to their workers when a company goes bust.

The reforms, put forward as part of a consultation on corporate governance and stewardship launched in March, will be seen as a response to recent scandals such as Sir Philip Green’s £1 sale of the department store chain BHS in March 2015, which collapsed a year later with a £571m deficit in its pension funds.

Green paid in £363m, but the fallout provoked widespread debate over the responsibility of directors to their staff.

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