Debt Advice and Debt Management
Debate between Yvonne Fovargue and George Hollingbery
George Hollingbery (Meon Valley) (Con)
I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing this important debate and the hon. Member for Makerfield (Yvonne Fovargue), whom I followed on the occasion of our maiden speeches, on her speech. It is a particular pleasure to follow her today as she was so erudite and well informed as a consequence of her employment history.
Debt management and debt advice are important concerns even in relatively wealthy constituencies, such as mine. The latest report from our consumer advice bureau shows that debt advice is the No. 1 request it receives on a daily, weekly and annual basis. I do not want to trouble the House for long, but I want to raise an issue that many hon. Members have raised in the Chamber before. Questions on this matter have been asked before by the hon. Members for Great Grimsby (Austin Mitchell), for Ashfield (Gloria De Piero) and for Blaydon (Mr Anderson) and the right hon. Member for Delyn (Mr Hanson). The hon. Member for Westminster North (Ms Buck) has even introduced a private Member’s Bill on the matter. No doubt Mr Deputy Speaker will rule me out of order if the subject is not close enough to the motion before us, but I believe that the subject of bailiffs is important and germane to this debate, because many of my constituents and, I suspect, others rack up debts that they then have to refinance due to the bailiff system.
This is a complex argument, and there are two distinct sides to it. The BBC’s “Inside Out South West” made a programme on debt collectors last month, concluding that efficient debt collection—the threat of ultimate sanction—was important, particularly for small businesses, at this difficult stage of the economic cycle. My conversations with those closer to the Minister than I am, in the Ministry of Justice, suggest that that Department shares that concern.
On the other hand, all Members will have heard stories from many constituents about debts racked up because bailiffs’ charges have ended up way in excess of the original fine or charge. BBC’s “Watchdog” has done a great deal on the matter, and if one trawls the internet, one finds many websites that include lots of information and reflect a huge concern about the issue.
One or two of my constituents have been to see me about debt, and one who e-mailed me about a case then came to see me about her non-payment of council tax. She had missed just two £30 payments, and she knew she had, so she contacted the council to attempt to make arrangements—admittedly some months after she had missed those payments. She knew that it was her fault, but, after having her bailiff changed and trying to leave on an answerphone any number of messages to which there was never any reply, her bailiff was changed, somebody new arrived on her doorstep and she was presented with a bill for £642.
To many people that might not seem like a huge amount of money, but for my constituent it was completely insurmountable: she absolutely could not possibly pay that sort of money. We intervened, made arrangements for the local council and things were sorted out, but if we had not been there I hate to think where she would be. The answer is probably in the hands of the sort of debt management organisations that have been so well described today.
Another constituent failed to pay a parking ticket, and, after many months of dispute one way or another, with missed phone calls, missed letters and letters allegedly sent from bailiffs, she ended up with a bill for £500. A further constituent received a bill for £60 which escalated to £596. There is something plainly disproportionate about what happened in those cases. It is important that we have robust debt collection services, because we cannot allow people to rack up fines knowingly without any intention of paying them, but we have to look at the matter of proportionality, and I am worried about it.
My local citizens advice bureau has shown me two more cases that it has handled. It has one client who receives regular letters from a debt collection—bailiffs—company for her son who owes council tax, but he has not lived with her for five years, as she has made clear to the debt collection company any number of times. She has given the company her son’s address and phone number, but the letters keep on coming. She has also complained to the local authority, but it does not have the power to do anything.
The same bailiffs company persuaded another of my constituents to set up a direct debit to pay off arrears that she had run up some time ago, but the firm failed to collect the second payment, even though the direct debit was still set up. The company assured her that the direct debit was not set up, but bank records showed quite the opposite, and it has since charged her penalties for not paying an amount that it was supposed to collect and had a mandate to collect. That situation clearly cannot be allowed to continue.
This is a difficult issue, as I have already said. It is based on law, customs and practice from many years, if not many centuries, ago and there is clearly a need for reform. The previous Government did act on the matter, putting on the statute book the Tribunals, Courts and Enforcement Act 2007, to which my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) has referred. She mentioned section 5; my point is about section 3.
Section 3, as I am sure many Members will know, has not been enacted, but some progress has been made. There is an online certificated bailiff register, so debtors can check a bailiff’s status; all bailiffs now have to pass a Criminal Records Bureau check; and minimum training and skills are required for certification. But section 3 remains unenacted. It includes measures on when and how a bailiff or a High Court enforcement officer can enter a premises, what goods they can seize and sell, and what fees they can charge.
Yvonne Fovargue
I am glad that the hon. Gentleman mentions visits, because I have had two cases of bailiffs visiting a property, one in which they said, “You’ll be taken to prison and the child will be taken into care, and another in which they threatened to seize a pedigree puppy while a child was there. Some of their actions on visits are as bad as their letters.
George Hollingbery
A small trawl of the internet produces reports of any number of similar cases in which the circumstances are really quite horrifying. Vulnerable people standing on a doorstep, often surprised by the visit, can be bamboozled into doing all sorts of things. Indeed, in the parking ticket case that I mentioned, the lady was so upset by the situation, as was her neighbour, that the neighbour wrote out a cheque at that very moment to pay the £592 so that her friend’s car would not be taken away. These are unacceptable practices.
On taking office, the coalition said in its agreement:
“We will provide more protection against aggressive bailiffs and unreasonable charging orders, ensure that courts have the power to insist that repossession is always a last resort, and ban orders for sale on unsecured debts of less than £25,000.”
On 22 March this year, the hon. Member for Gedling (Vernon Coaker) asked a question of the Secretary of State for Justice about the timetable for consultation on the implementation of section 3 of the 2007 Act. He received this reply:
“The Government have given a commitment to provide more protection against aggressive bailiffs. We have identified options for public consultation on this commitment including the better regulation of bailiffs, the powers of bailiffs, their costs and how complaints should be dealt with. We are currently preparing the paper and intend to publish in spring 2011.”—[Official Report, 22 March 2011; Vol. 525, c. 971W.]
It is not spring 2011—it is early winter 2011—and that consultation is still not with us.
I must make it clear that I recognise that this is not an easy problem to solve. There needs to be a robust mechanism in place to enable those who are owed to collect outstanding debts from those who simply refuse to pay; all reasonable people would agree on that. Ministers are faced with serious difficulty in creating a scheme that has real teeth, but only as a last resort, without charges becoming hugely disproportionate. It is a fine balancing act, and I do not envy them the task. But if companies and taxing authorities do not have such schemes available, they could well face serious economic difficulties. It is not an easy task, and I can genuinely understand why making progress is difficult. That said, we have had promises and there is an expectation that something will happen. All I ask is that the Ministry of Justice—of course, the Minister who is with us today cannot respond on its behalf—provide some certainty for those in the industry and those who are subjected to bailiffs’ visits to ensure that we understand where we are going on this issue.