Bailiffs: Regulatory Reform

Andy Slaughter Excerpts

Wednesday 9th January 2019 Westminster Hall

[Emma Reynolds]

I could not agree more. I have had contact with that trade association. It is simply not realistic to expect a trade association, which is there to represent its members, to take action against those members. In fact, the lead of that organisation was on “World at One” on Radio 4 today claiming that there was a robust complaints procedure. I beg to differ and will address that point towards the end of my speech.

The worst case of this kind that I have heard—I know that my hon. Friend the Member for Croydon Central (Sarah Jones) has raised it with the Minister and will speak about it today—is the devastating case of Jerome Rogers, who took his own life. He had offered to pay back the debt in stages, but the bailiffs refused. I pay tribute to the brave campaigning of his family, who are here today. We owe it to them to do all we can to change the culture of the bailiff industry so that they are there to help, not penalise people. There is a positive example from Hammersmith and Fulham Council in London, which has stopped using bailiffs to enforce the collection of council tax arrears because it thinks it is better to try to work with the people involved and help them pay back that debt rather than forcing them into a spiral of ever more debt.

[Andy Slaughter (Hammersmith) (Lab)]

I am grateful to my hon. Friend for mentioning Hammersmith and Fulham Council, which as she correctly said stopped using bailiffs to enforce council tax debts from April last year. Collection rates have not gone down since. One council cabinet member said:

“We have done this by intervening early with residents who may have trouble paying council tax, speaking to them in a respectful and supportive way to develop a sustainable repayment plan that both protects the council’s income while avoiding forcing people into making bad financial decisions to avoid bailiffs, such as resorting to payday lenders or missing rent payments.”

Should not all local authorities and anyone trying to enforce debts adopt that as their philosophy?

--- Later in debate ---

[Sarah Jones (Croydon Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I thank my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) for introducing the debate so eloquently that it is almost impossible to imagine the Government not wanting to act. I think there is cross-party agreement that action needs to be taken, which has to be incredibly powerful. I know that the Minister is listening, as she has listened to me previously, and that she will have listened to everything that my hon. Friend said.

As we know, bailiffs are the only part of the financial sector that is not regulated with an independent regulator. A powerful case has been made already in the debate, and by Citizens Advice and many other voluntary organisations, that the problem is worsening, that it is not being fixed by the changes made in 2014, and that something should be done. My involvement arose from a meeting with a constituent, the mother of Jerome Rogers from New Addington, who in 2016 ended his life at the age of just 20. Jerome had two £85 traffic fines from Camden Council that he had received in the course of doing his job as a motorbike courier. Due to the escalation of that fine and enforcement by Newlyn plc, the fines spiralled to more than £1,000. The Minister is aware of the case and last year she very kindly met with Jerome’s family and with me.

Jerome’s case is particularly tragic, but we must not think that it was a one-off. The coroner found that the bailiffs involved with Jerome had complied with the industry’s guidelines—guidelines that are self-written and self-enforced, as we have discussed. That is not something to be proud of; it simply highlights how flawed the guidelines are and how flawed the system of self-regulation is across the whole bailiff industry—especially in view of what Jerome was subjected to in the months leading up to his death. Each of these things underlines a systemic problem rather than a problem specific to Jerome.

Jerome was refused an affordable repayment plan. He called the bailiff after being told that he would be receiving a visit to his home and was told that he needed to call Newlyn. Newlyn then told him that he must pay the debt in full. After the bailiff visited his home, adding more money to his debt in the process, he was finally offered a repayment plan, but at £128 per week it was clearly not affordable. His average earnings were about £97 a week, and less than £20 after his work expenses. If Camden Council had offered him a repayment plan of £10 per week there and then, he could have paid off both £65 fines in three months.

Secondly, Jerome’s motorbike—his only means of earning money—was clamped. There was dispute over the valuation of the bike and whether it was even legal to clamp it, but looking beyond the valuation, it is surely wrong that a person’s sole means of income can be taken away by bailiffs. Thirdly, the enforcement fees were duplicated because the two cases were treated as separate, which is in the interests of no one but the bailiffs, who can charge £75 per case for simply writing a letter. It makes no sense that £150 can be added to a debt for a few pieces of A4 paper, or that two cases cannot be dealt with in the same letter. Bailiffs charge hundreds of pounds per case for every visit to a property, which might explain why they refused a repayment plan before the bailiff made his visit. The coroner viewed the bailiff’s behaviour as intimidating and raised the possibility that his actions could have been viewed as a form of harassment. They involved sitting outside the house for a prolonged period without telling Jerome why he was outside.

The fourth issue is one that has already been spoken about: the bailiff was paid by results. He had the potential to earn more if he seized assets, but if the debt was not cleared he would not get paid. Debt collection agencies are prohibited by their regulator, the Financial Conduct Authority, from paying enforcement agents through such commission models. Those models are common in the bailiff industry, but we cannot stop them leading to bad practice when bailiffs have the power to seize assets and enter homes. It is systemic.

[Andy Slaughter]

There is FCA regulation in the private sector to some extent, but not in the public sector, as in my hon. Friend’s example. Extraordinarily, the National Audit Office’s recent report found that in many cases Government bodies are worse at fulfilling their duties. Does she agree that the Minister should look particularly at what local authorities and central Government Departments are doing in the area?

[Sarah Jones]

My hon. Friend makes a good point. We must tackle all the aspects; we cannot just say that it is a problem for local authorities without also looking at independent regulation.

I realise that I have already spoken for longer than I should have, Mr Evans. I wanted to give other examples of cases and stories that people have written to me about, but I will write to the Minister about them instead.

The trade body is not fit for purpose as a regulator. Indeed, it has written to me, as have other bailiffs, threatening legal action:

“Please desist from using this tragedy to lobby for changes that are unrelated to the actions of the enforcement agents.”

The chief executive officer of the trade body called our work on behalf of Jerome’s family

“a means to attract publicity for a populist campaign on behalf of the debt advice sector.”

For shame! That is not what we are doing; we are trying to honour the memory of Jerome and fix a system that is clearly broken. I really hope that the Minister will listen. I will work with her, as we all will, to make sure that we bring in the right kind of regulation.