Covid-19: Debt Collection

Lord Best Excerpts

Thursday 23rd July 2020 Lords Chamber

Asked by

[Lord Best]

To ask Her Majesty’s Government what action they are taking to reform debt collection processes (1) during, and (2) after, the COVID-19 pandemic in response to (a) the report by the Centre for Social Justice Collecting Dust: A path forward for government debt collection, published on 26 April, and (b) representations from Citizens Advice, the StepChange Debt Charity and the Money Advice Trust.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, we welcome the Centre for Social Justice report and look forward to advice sector representations. We responded to Covid-19 by pausing outbound debt collection and on 29 June published a call for evidence to inform post-Covid policy in this important area. Central Government have for some time had a debt strategy that advocates the use of the widely welcomed fairness principles. Each local authority, however, is responsible for its own autonomous interpretation of the relevant debt management legislation on, for example, council tax enforcement.

[Lord Best (CB) [V]]

I thank the noble Lord for his positive response. A debt management Bill would establish clear protocols and an independent regulator for bailiffs as proposed by the Centre for Social Justice and others. Does the Minister agree that heavy-handed debt collection processes, principally by some local authorities owed council tax, are costly, ineffective and often ruinous for those concerned? Will the problem not get much worse post Covid, if we do not act now?

[Lord True]

My Lords, as the noble Lord will know, action was taken in 2014 in relation to enforcement agents. This is an area under examination. We have recently launched the call for evidence to inform policy, as I mentioned. That will obviously influence the consideration of whether a debt management Bill is a proportionate and reasonable response.