Bailiffs: Regulatory Reform

Kevin Hollinrake Excerpts

Wednesday 9th January 2019 Westminster Hall

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the hon. Member for Wolverhampton North East (Emma Reynolds) on obtaining this important debate, and my hon. Friend the Member for Harborough (Neil O’Brien) on persuading me to sign the letter of the hon. Member for Leeds West (Rachel Reeves) about trying to get change through a meeting with the Justice Secretary.

I am making my speech partly in my role as chair of the all-party parliamentary group on poverty. Clearly, poverty and debt are inextricably linked. I totally agree that there is a problem with bailiffs and support the call for an independent regulator. There are also problems with debt. Collecting debt must be a commercial matter. It can be very effective. I have to tell the House that in my business life we have a number of offices and, in 2008 when things were pretty tough in the economy, we were visited by the bailiffs and paid our debt very quickly on the back of that. We did not realise how quickly bailiffs could enter premises on a commercial lease without any notice, but we soon found out, so they can be very effective. However, there are other and better ways to collect debts in many instances.

Debt is a commercial matter and those to whom people are not paying their debts have a perfect right to try to collect them, but several hon. Members have spoken today about local authorities, over which we should have some influence. The local authorities in question should learn from and develop best practice on debt collection. I had a meeting with StepChange, the debt advice charity. Thirty per cent. of the people coming to the charity are behind with their council tax. That is by far the No. 1 area for debt that it works with. There has been a huge increase over the past seven years. Seven years ago, 21% of total debt was owed to utilities and local government. Today 26% of debt is with utilities, but 40% of total debt is with local authorities. Local authorities have been criticised by the Treasury Committee for being overzealous in their recourse to bailiffs and could make a significant difference to people’s lives if they adopted debt collection best practice. The Justice Committee will also consider that. Interesting research from Citizens Advice said that one in four people had made their bailiff an affordable payment offer that was rejected. Clearly there is a better way to deal with the matter.

What is best practice? The Money Advice Service has developed what it calls a supportive council tax recovery toolkit for local authorities to adopt, which talks about best practice and how to liaise with debt advice agencies, taking specific approaches to specific cohorts, particularly vulnerable people. On utilities, I have had dialogue with Yorkshire Water about how it deals with vulnerable households and how it makes sure it identifies those people. According to the Money and Mental Health Policy Institute, 50% of people who are in debt have mental health problems, so it is a case of identifying them and taking a different approach. In my constituency, as in the constituency of my hon. Friend the Member for Redditch (Rachel Maclean), an excellent debt collection agency works with the utilities. I have visited it and it takes a supportive and collaborative approach to debt collection. The collection rates are at least as good as those obtained by traditional routes.

I absolutely support the calls for an independent regulator, but I also suggest developing best practice and perhaps creating a requirement for local authorities to follow it in the first instance. That would make a huge difference to people who are in debt and to people in poverty.