Financial Services Bill

Lord Lucas Excerpts

Committee stage & Lords Hansard
Wednesday 3rd March 2021 Grand Committee

[Lord Lucas (Con) [V]]

My Lords, my amendments in this group are all a result of my chairmanship of the Enforcement Law Review Group. They reflect the concerns of members of that group—it has representatives from all sides of the debt management business, from creditors to debtors and others—about the breathing space regulations. I would be quite content if my noble friend wrote to me or discussed these matters afterwards, but I am grateful for the opportunity that the Bill affords to pick them up before the arrangements themselves go live.

Amendment 56 asks whether the 60 days of the breathing space moratorium can be extended. There is concern, particularly from the debt management side, that the whole business of processing a benefit claim can run beyond 60 days and make it necessary that the period should be longer. They want to see either that there is flexibility or that there will be some way of managing situations where a longer period is needed.

Similarly, Amendment 57 looks at the need to report in the middle of the 60 days and, if there has been no change, to ask whether the requirement of the report might be omitted.

Amendment 58 looks at situations where the debts owed include those where it would be really difficult to inform the creditor of what was going on, in terms of obtaining a breathing space, because the creditor is in a position to upset the debtor’s life substantially. Examples might be having children in a nursery, a car in to be repaired or a landlord who is in a position to evict the debtor from their house. It would allow debt management agencies the flexibility to manage a debtor’s life in a way, at the same time as they are helping them with their debts, and not push them into trouble because they have involved more commercial creditors in a breathing space scheme.

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[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

I call the next speaker, the noble Lord, Lord Rooker.

[Lord Lucas (Con) [V]]

My Lords, I am still going—I have a number of other amendments. Is the Committee not hearing me?

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

Please continue—sorry. It was a pregnant pause.

[Lord Lucas (Con) [V]]

Amendment 62 looks at joint debt situations, for instance between a wealthy husband and an impoverished wife where it is the wife who has the breathing space moratorium. Under those circumstances, it is not obvious that the wealthy husband should have the benefit. The amendment therefore asks whether, under some circumstances, the moratorium should not apply to all parties to a debt.

Amendments 63 and 64 are really just opportunities to ask the Government whether this scheme is ready to go. A lot of pressure has been placed on the Insolvency Service and the courts in the course of Covid. Are we actually in a position to launch a working system? If not, should there not be some arrangement to allow delay to ensure that, when the launch comes, it is successful?

Amendment 65 looks at situations where a debtor gets the benefit of a breathing space but then just does nothing and does not engage with the breathing space process in any way. It asks: should there not, under those circumstances, be some incentive—something that the debtor loses by not engaging with the process?

Amendment 66 looks at the situation of a creditor that has taken its debt to the point of commencing legal action and then faces a breathing space process. That is fine, but should not the position that the creditor has got into be finalised so that things can be picked up again afterwards if they need to be, rather than having to be started again at considerable expense to the creditor? Should not the system recognise—[Inaudible.]

I appreciate that these are complicated and detailed amendments. As I said, I would entirely accept written correspondence, and I shall be grateful for anything the Minister says today. However, they reflect an industry that is looking to make a success of both sides of the breathing space initiative but is concerned that some details are not provided for in the regulations as they exist at the moment.

Now I have finished.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

Thank you for the clarification. I call the next speaker, the noble Lord, Lord Rooker.