Bailiffs: Regulatory Reform

Rachel Reeves Excerpts

Wednesday 9th January 2019 Westminster Hall

[Emma Reynolds]

How very convenient for the bailiff involved! We had a similar case in my constituency. At one point, we were told that there was a body cam, but when we pressed to see the footage, we were then told that there was not a body cam. The hon. Gentleman raised that in the form of a written question to the Minister and we should consider it. It will not solve all of our problems, but it would go some way towards helping to look at these disputes.

One man told me that, although he had moved out of his mother’s house and the debt was his and not hers, the bailiffs told her that if she did not pay, her son would go to prison. They marched her to the post office, where she was pressed to withdraw £550 to cover the debt. His mum was 73 at the time. There are countless examples of bad practice from all over the country.

[Rachel Reeves (Leeds West) (Lab)]

Like other Members, I congratulate my hon. Friend on securing this debate. Is she aware that there is a private bailiff trade body called the Civil Enforcement Association? Its code of conduct says that its members should be

“professional, ethical…polite, honest and non-threatening”,

yet all the examples that my hon. Friend has given are of behaviours that are the exact opposite. In 2016, the Civil Enforcement Association received 255 complaints about its members yet expelled none of them. Is that not a perfect example of why we need better enforcement and regulation of the bailiff industry?

[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.

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[John Howell (Henley) (Con)]

It is a great pleasure to serve under your chairmanship, Mr Evans, and to follow the hon. Member for Wolverhampton North East (Emma Reynolds), who introduced this important debate.

The debate is timely. The subject is very much on the lips of the Minister and of members of the Justice Committee, as both the Minister and the Committee are undertaking inquiries at the moment. The Ministry of Justice inquiry, which has called for evidence, will look at the effect of the 2014 legislation, which although it has brought some benefits, clearly did not go far enough and has created new problems, as the Lady told us. Those problems are due to the behaviour of many bailiffs—the way they go about their job is a real problem for us. I believe the Ministry of Justice has promised that any proposed changes will be put out to consultation, so we will all have the opportunity to engage with them.

The Justice Committee also decided to conduct an inquiry on the subject, and we discussed yesterday how it would feed into the Ministry of Justice inquiry and how we could submit it as evidence. The Committee’s inquiry will look at the 2014 legislation and the way in which complaints are handled and dealt with throughout the process. Two issues emerge above all: the extent of regulation and the complaints system. The two are of course associated, but they need also to be looked at separately.

As the hon. Member for Leeds West (Rachel Reeves) mentioned, the Civil Enforcement Association exists, but it is not independent. The system of regulation is effectively one of self-regulation or, in this case, pretty much no regulation. I listened to all the points made by the hon. Member for Wolverhampton North East about why the system of regulation is not very effective. One point that came in, but was not actually mentioned, is that no sanctions can be levelled against a firm of bailiffs conducting its business in such a way.

[Rachel Reeves]

The hon. Gentleman makes an important point. The Civil Enforcement Association is just a trade body. People have to pay a fee to be a member, but a bailiff does not have to be a member. The answer is to have an independent bailiff regulator capable of banning and prosecuting bailiffs who break the law. Does the hon. Gentleman agree that that is in the interests of bailiffs who respect the law and their customers, particularly vulnerable ones?

[John Howell]

I very much agree with the hon. Lady’s description of how the regulatory system should work, but I do not think we should concentrate solely on the regulatory system. I completely take on board everything she said about what the regulatory system needs to include, but we need also to examine how complaints are dealt with if we want to have an effect on bailiffs who are not doing their job properly or are abusing their position.

The current complaints system has seen an enormous increase in people trying to make complaints, but fewer people have been able to do so legitimately. I propose to the Minister that, before she proceeds with the results of the call for evidence, she and I have a conversation. I chair the all-party parliamentary group on alternative dispute resolution, and I think we have the solution to the problem. The solution, which the rail system is using to try to deal with complaints, is to have in place a system of alternative dispute resolution, including such things as mediation, that can deliver quick advice.

One great thing about alternative dispute resolution is that it is much cheaper than going to the courts. That is what we need. If the Minister would like to have a conversation with me, I will propose a system to do that. From the experience that we have of how ADR has been used elsewhere, I think it will satisfy all the requirements that the hon. Member for Wolverhampton North East set out.

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[Rachel Reeves (Leeds West) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Evans, and I wish to make a few brief points in this important debate—there have already been many valuable contributions from across the House.

The debate should be seen in the wider context of growing household debt. The rise of rogue bailiffs speaks to a wider malaise in our economy. People face a range of challenges, including insecure work and zero-hours contracts, stagnant wages, benefit cuts and access to affordable credit, which all put pressure on household finances. It is no surprise that the No. l money concern for people seeking help from Citizens Advice is household debt. UK households owe an average of just over £15,000 in unsecured lending from credit card firms, banks and other household debt, and unsecured debt is now the highest it has ever been—indeed, it is higher than before the financial crisis.

It is not a sound basis on which to build our future economic prosperity if more of our wages go towards servicing debt than spending on our basic needs. It is therefore not surprising in such an environment that more people are racking up debt and struggling to pay household bills, council tax and some of the other debts we are discussing. It is also not surprising that into such an environment step those rogue bailiffs who exploit people who are already struggling with debt, and who are vulnerable or in precarious circumstances.

Like the hon. Member for Redditch (Rachel Maclean), I am not arguing—I do not think any Member of the House would argue this—that creditors are not entitled to pursue their debtors. It would be unfair on those who do pay their debts if others were not encouraged and made to do so. The issue, however, is about obeying the law and exploiting people, especially if they already face financial hardship and are vulnerable. In truth, ballooning household debt means that bailiffs now have more scope to exploit some of the most vulnerable people in our society by refusing to accept affordable payment offers, and by misrepresenting their rights of entry or acting aggressively or unsympathetically on the doorstep. That is the issue we need to focus on, and where we need Government action.

Members have already mentioned the letter sent today to the Justice Secretary to ensure that the Government take seriously calls from across the House for an independent regulator. As my hon. Friend the Member for Makerfield (Yvonne Fovargue) said, the 2014 reforms have not worked and it is now time for such a regulator. I hope the Government seize this opportunity and take heed of the concerns raised and the examples that Members have given, put in place that independent regulator, and ensure that those struggling with financial difficulties are not exploited in the ways we have heard about.