Bailiffs: Regulatory Reform

Debate between Lucy Frazer and Ranil Jayawardena

Wednesday 9th January 2019 Westminster Hall

[The Parliamentary Under-Secretary of State for Justice (Lucy Frazer)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Wolverhampton North East (Emma Reynolds) on securing the debate on a matter that I know has affected her constituents greatly, as she spoke to me about it a few weeks ago.

I pay tribute to all hon. Members for the quality and passion of the contributions today. As my hon. Friend the Member for Henley (John Howell) said, this is a timely debate because on 25 November the Government launched a call for evidence to inform their second review of the 2014 reforms that regulate enforcement agents, in order to ensure that that important area operates well. We have framed that call for evidence against the points that have been raised with us about how the system is not operating as it should. We have heard much today that will help us reflect on that call for evidence.

It is interesting that three colleagues—my hon. Friends the Members for North East Hampshire (Mr Jayawardena), for Harborough (Neil O'Brien) and for Hendon (Dr Offord)—all raised examples of bailiffs taking action against people who were not even the debtors.

[Mr Jayawardena]

I welcome the fact that the Government have agreed to review the matter. Does the Minister agree that it is important to stop innocent homeowners being caught up in the collection of debts that they have nothing to do with, including where those debts have been incurred through fraudulent credit card applications, as in the case of my constituent?

[Lucy Frazer]

That is a very interesting point, which I just highlighted—three of my hon. Friends raised the issue of whom the action is taken against. I know my hon. Friend feels strongly about this, and it is something he has talked to me about before.

Before I turn to the review in more detail, I want to set out a bit more about the subject of debt enforcement more broadly. Enforcement agent action has been, and is likely to remain, a highly divisive subject. People who experience debt problems represent a broad spectrum of society, including some who are extremely vulnerable and others who deliberately refuse to pay for products and services.

It is important to note the two points that were made in this debate by a number of Members. The hon. Member for North Antrim (Ian Paisley) and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) highlighted the need for people who owe money to pay their debts, because the recovery of debts is important to the economy and the justice system. My hon. Friend the Member for Redditch (Rachel Maclean) highlighted the good practice of a company in her constituency. The Government are committed to ensuring that all enforcement agents treat debtors fairly and operate responsibly and proportionately. Our role as a Government is to strike the right balance between ensuring that debts can be collected effectively while protecting debtors from enforcement agents’ aggressive behaviour.

With those principles in mind, and after an extensive period of research and engagement, the Government imposed significant extra regulation on the enforcement process and the behaviour of enforcement agents in April 2014. I am pleased that the hon. Member for Wolverhampton North East welcomes those reforms, which included a comprehensive code governing when and how enforcement agents can enter somebody’s premises; the safeguards to prevent the use of force against debtors; which goods agents can and cannot seize and, if necessary, sell; and what fees they can charge.

The reforms stopped enforcement agents entering homes when only children are present and introduced important safeguards for vulnerable debtors. They aimed to make all parties more aware of their rights and responsibilities and introduced a new certification process for enforcement agents to ensure that they are the right people for the job. They introduced mandatory training to ensure that enforcement agents have the skills required to perform the role. The Government undertook to review the implementation of the reforms after one, three and, if necessary, five years in order to check that they are working as intended. The review, which was published in 2018, found that the reforms had many positive benefits, such as better awareness of debtors’ rights and how to complain, as well as more clarity for debtors about the fees that can be charged, the processes that should be followed and where to go for advice. However, it also reported that debt advisers and debtors still perceive some enforcement agents to be acting aggressively and, in some cases, not acting within the regulations.

The Government take those concerns very seriously. While many enforcement agents work within the law, we will not tolerate any who pursue aggressive tactics and bad practice, who make people’s lives a misery and ruin the industry’s reputation. For that reason, we launched the call for evidence to shine a spotlight on the behaviour of enforcement agents. Many of the points that have been raised today are the subject of that call for evidence. The hon. Members for St Helens South and Whiston (Ms Rimmer) and for Wolverhampton North East highlighted the problem of threatening behaviour, which is part of the call for evidence. My hon. Friend the Member for Henley and the hon. Member for Wolverhampton North East raised the issue of complaints, which is also a subject for the call for evidence. The hon. Member for Coventry South (Mr Cunningham) and my hon. Friend the Member for Harborough raised issues about training—again, that is a matter for the call for evidence.

The independent regulator, which is part of our consultation, was raised by my hon. Friends the Members for Henley and for Harborough, and by the hon. Members for Coventry South, for Wolverhampton North East, for Leeds West (Rachel Reeves), for Croydon Central (Sarah Jones), for Ellesmere Port and Neston (Justin Madders) and for Makerfield (Yvonne Fovargue). The treatment of vulnerable people was raised by the hon. Member for Lewisham West and Penge (Ellie Reeves), and that is also covered in the call for evidence, which is running for 12 weeks until 17 February 2019. As part of that, we are meeting representatives from the advice sector to get a better understanding of the research they have conducted and their concerns, and we will also be talking to enforcement agents and creditors. However, the call for evidence is not just about collecting data; we are very keen to hear from people about their individual experiences. A number of hon. Members have shared the experiences of their constituents, whom I encourage to respond to our call for evidence.

I was very pleased to have had the opportunity to meet the hon. Member for Croydon Central and her constituents the Rogers family, who sadly lost Jerome following visits to their home by enforcement agents. Like others, I am pleased to see them here today. I thank them for their contribution to this important issue and for their continuing efforts to highlight this matter.

A number of hon. Members have suggested that the Government’s reforms should go further by introducing an independent regulator, and that there should be a simpler, free and independent complaints procedure. As set out in the call for evidence, we are considering these suggestions. The call for evidence asks whether independent regulation is needed and, if so, what form that should take and how it should be funded. We would welcome any input on all those questions. It also asks about the complaints procedure, as I have said.

In addition to reviewing the behaviour of enforcement agents, the Government are working more widely to help people who fall into problem debt by providing them with protection and ensuring that creditors are acting responsibly. For example, the Government are increasing funding for free debt advice via the Money Advice Service, which will spend £56 million this year to help more than half a million people. After consultation, and via regulations to be laid this year, the Government will implement their 2017 manifesto commitment to introduce a breathing space in order to give people in serious debt the right to legal protections from their creditors for up to six weeks. We will also introduce a statutory debt repayment plan to enable those with unmanageable debts to enter into an agreement to pay their debts in a realistic timeframe. The Ministry of Justice is a member of the Government’s Fairness Group, which works with the advice sector to look at the issue of fairness in Government debt management and in enforcement practices.

I would like to end by commenting on the cross-party support to address this important issue. It has been invaluable to me, and I am sure to others, to hear not only people’s tragic personal stories, but articulate and thoughtful arguments about the principle behind these issues.