Tribunals, Courts and Enforcement Bill [Lords]

Public Bill Committee, 22 March 2007.

Further written evidence to be reported to the House

Clause 71

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 131, in clause 71,page 48, line 4, leave out ‘and’.

Joan Humble (Labour, Blackpool North and Fleetwood)

With this it will be convenient to discuss the following amendments: No. 132, in clause 71, page 48, line 5, at end insert

‘, and

(c) any service charges defined under the lease.’.

No. 133, in clause 71, page 48, line 6, leave out ‘services,’.

No. 134, in clause 71, page 48, line 11, leave out ‘and use’ and insert ‘, use and service charge’.

Henry Bellingham (Conservative, North West Norfolk)

Again, it is a pleasure to be serving under your chairmanship, Mrs. Humble.

These are probing amendments and they are very simple, so I shall not detain the Committee. I wish to ask the Minister to clarify some points. Amendment No. 132 is probably the critical one in the group. Clause 71(1)(b) refers to

“any value added tax chargeable on that amount or interest”,

under which amendment No. 132 would add proposed paragraph (c), referring to

“any service charge defined under the lease.’.

The rent payable under the lease would then include any interest payable, plus value added tax, plus service charges. In some circumstances, it is fair for a landlord to be able to charge for arrears of service charge in addition to other items. Sometimes, the service charge may be dealt with on a totally different basis, but ifit is outstanding because there has been a deliberate attempt not to pay and it has been disregarded completely by the tenant, the rent should include any service charge defined under the lease.

Amendment No. 131 is a paving amendment as it would leave out “and”, while amendment No. 132 is the key amendment and Nos. 133 and 134 are basically consequential and probing amendments. I should like to hear what the Minister has to say about them because they are important issues that have beenraised with us by a number of organisations seeking clarification.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

Good morning, Mrs. Humble. The Committee will note that I supported the investigation of such issues. At the moment, this part of the Bill deals with commercial rent arrears, not domestic premises, as we discussed on Tuesday. For many people, rent is a substantial issue, but service charges will be linked in many cases. It therefore seems that we should provide a procedure that looks at the ability of rent and service charges to be included. At present, clause 71(2) expressly says that rent

“does not include any sum in respect of rates, council tax, services, repairs, maintenance, insurance or other ancillary matters (whether or not called ‘rent’ in the lease).”

It is obviously right that rates and council tax should not be included. They are a liability to someone else. Insurance does not follow necessarily. People have to take out insurance, but tenants have some discretion over that. Repairs and maintenance obligations are not fixed in the same way as service charges are usually fixed; they are normally a fixed amount. The charge comes with the building and is part of the initial obligation. I should be interested to hear whether the Minister and her colleagues have considered including service charges and, if they have, why they still want to exclude them. If they have not considered such a proposal, are they willing to do so?

Vera Baird (Labour, Redcar)

Good morning, Mrs. Humble. In this part of the Bill, rent is defined as the amount payable under the lease for possession and use of the premises, including any interest payable or VAT chargeable. We are content with that definition. It follows the Law Commission’s recommendation in its report on distress for rent in 1991, which relied on a ruling in T and E Homes Ltd. v. Robinson in 1979. We think that rent should be sums that are attributable directly to the tenant’s enjoyment of the land. Items such as service charges, repair costs, insurance premiums and so forth, which are directly attributable to something else—not enjoyment of the land—do not fall within the definition of rent and should be excluded.

There are, of course, other ways in which to recover such money, but it is not appropriate that distraining for rent, albeit that it is now abolished for domestic premises by the Government and applicable only to commercial premises, should have application to anything beyond rent. The issue of certainty is important because it is a non-court remedy and rent is certain, while service charges will not be. That is our reasoning, and I hope that it has reassured the Opposition.

Henry Bellingham (Conservative, North West Norfolk)

In her usual courteous way,the hon. and learned Lady has reassured me and the Committee, so I beg to ask leave to withdraw the amendment.

Clause 72

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 135, in clause 72, page 48, line 27, at end insert

‘, and must be set at a reasonable amount so that a landlord does not suffer hardship.’.

Clause 72 refers at some length to CRAR. The Committee will be aware of the background to the clause, which sets out how the rent is recoverable. Subsection (2) states that the

“amount of any rent recoverable by CRAR is reduced by any permitted deduction”,

while subsection (4) refers to the minimum amount of the rent and states:

“The minimum amount is to be calculated in accordance with regulations.”

That is clear to some extent, but the amendment would insert at the end:

“and must be set at a reasonable amount so that a landlord does not suffer hardship.”

It is a probing amendment suggested by a number of organisations that are interested in that part of the Bill. It might be slightly clumsily drafted and mightnot be ideal. However, in setting the minimum amount and calculating it, in accordance with regulations,there is some concern that in a small minority of circumstances, the interests of the landlord might not be considered. Obviously, one has to look at what the regulations say; some of them will presumably be laid at some future stage and it has been indicated that they will lay down certain parameters. In debating the Bill, we have talked about the interests of either the debtor or the tenant, but our small amendment is a probing one to ensure that the interests of the landlord are properly considered at all times, particularly when the minimum amount is being calculated.

Vera Baird (Labour, Redcar)

We are indeed in the land of CRAR and I should probably, therefore, say what it is: commercial rent arrears recovery. I am sure that we will talk about it a lot, and people might not have followed where we are.

CRAR is available only where the amount recoverable is in excess of a minimum amount, which, as the hon. Gentleman said, will be set up in accordance with regulations. That unpaid amount may not include accrued interest, VAT or other permitted deductions.

We will take care to ensure that the conflicting needs of landlord and tenant are managed by setting the minimum at an appropriate level. Our initial thinking suggests a trigger sum of something like one week’s rent or £200—whichever is the smaller—or four weeks’ arrears if the rent is less than £50. Currently those are, in our minds, perhaps appropriate minimums to apply for CRAR purposes. We are open to suggestions, but it seems to me that we are starting at a reasonable point. If we set the level at around that margin, we will not be allowing too onerous a penalty for too small a debt on the tenant and will not be cheating the landlord unless he has serious financial problems himself. I hope that the hon. Gentleman is reassured.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for the clarification and I beg to ask leave to withdraw the amendment.

Clause 75

Henry Bellingham (Conservative, North West Norfolk)

I should like to put a couple of points to the Minister on clause 75. I had an e-mail from the National Farmers Union in which Barney Holbeche, its chief parliamentary adviser, wrote:

“We are surprised that an agricultural holdings provisionhas crept in to a Bill of this kind. Detailed issues concerning agricultural holdings law have been under review by a Defra-approved cross-industry working group called TRIG (Tenancy Reform Industry Group). TRIG produced proposals recently for modest changes to the law which the Government implemented by way of a Regulatory Reform Order. The curious thing is that so far as we know the application of CRAR in relation to agricultural holdings has not been referred to TRIG for farming industry discussion as it should have been.”

Surely the Minister should have had proper consultations with the Department for Environment, Food and Rural Affairs about the clause? The NFU is slightly concerned, but points out that

“it is unlikely that rent recovery procedures would be much used in agriculture. This is because a tenant who cannot pay his rent on time would usually reach an amicable agreement with his landlord, knowing that if he failed to pay the rent on time he would be in breach of his tenancy.”

Anyone who knows anything about the farming industry knows that if someone is in breach of their tenancy, they are in danger of losing their home and business. Therefore, it is unlikely that the procedure would apply to an agricultural tenancy, but it is possible. There is also concern about lack of consultation. Will the Minister write to me in due course to explain the situation?

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

My understanding is that all thelaws on agricultural holdings appear in legislation that deals with agriculture holdings themselves. There is obviously a tradition of dealing with agricultural property relationships separately, and there has been much legislation on the subject. Therefore, in addition to the point made by the hon. Member for North-West Norfolk, I am concerned that the recovery process has crept into the Bill, particularly because it starts offby stating that the process will not apply in most circumstances. Will the Minister consider taking it out of the Bill and putting it in appropriate legislation? That is one of my bugbears. Legislation should be as streamlined as possible. If someone wants to look into the law about agricultural property, tenancy and holdings, they should be able to look at one set of Acts called agricultural holdings legislation and not have to look anywhere else.

Vera Baird (Labour, Redcar)

The Bill was published in July 2006 and has been through the usual Government clearance process. It is very well known to the Department for Environment, Food and Rural Affairs that CRAR is in the legislation. It is not exercisable to recover rentmore than a year overdue at the time notice of recovery is given. Permitted deductions can include any compensation due to the tenant in respect of the relevant holding. After hearing the hon. Member for North-West Norfolk, I do not think that the recovery process is likely to be used very much, but it is regarded as a useful remedy that ought to be in the Bill. I invite the hon. Gentleman to withdraw his concerns and to allow the legislation to go through.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I shall reflect on that and take advice. I am still not persuaded that the Bill is the right place for that legislation.

Henry Bellingham (Conservative, North West Norfolk)

I will do likewise. I will not withdraw my concerns as such but keep them registered. I will have further discussions and come back to the Minister in due course, but I am grateful to her for that initial explanation.

Clause 84

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

This is obviously a simple clause that says:

“This Part binds the Crown... But the procedure in Schedule 12 may not be used...to recover debts due from the Crown...to take control of or sell goods of the Crown (including goods owned by the crown jointly or in common with another person), or...to enter premises occupied by the Crown.”

Will the Minister explain how wide is the definition of the Crown? The Palace of Westminster, for example, used to be protected from all sorts of legal interventions because of its special status. In some circumstances, the definition of the Crown could be extended to include agencies of the Crown. I can understand that it would be rather indelicate for the bailiffs to go into Buckingham palace; it would not look terribly good if somebody had not paid the electricity bill. However, there should be a procedure, which would need to be extremely tightly drawn, for people to get their money back.

Vera Baird (Labour, Redcar)

I do not think that the measure is intended to deal with Buckingham palace. It refers to the Crown in the form of the Government. The Palace of Westminster can never conceivably have been part of the Crown. In fact, I see that the Crown does include the Palace of Westminster. That is extraordinary. It also includes agents of the Crown.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

My suspicions and fears are realised. We need to reflect on this point. The measure appears to be narrowly drawn. There are lots of Crown agencies; I do not know whether it applies, for example, to the Duchy of Cornwall, which owns estates over the road, including the Oval cricket ground, or to Crown property around Regent’s park, or to lots of other Crown lands. There will be cases of bills not having been paid that have no remedy. If the debtor is a Crown agency, how do people go about getting their money?

Vera Baird (Labour, Redcar)

The provision does not mean that such cases have no remedy; it means that they do not have this remedy. They have every other remedy under common law of which I am aware. However, I shall not give the hon. Gentleman a comprehensive list at present.

New Clause 2

Tobias Ellwood (Conservative, Bournemouth East)

I beg to move, That the clause be read a Second time.

It is a pleasure to work under your tutelage today, Mrs. Humble. It has been interesting to be part of a major overhaul of the entire enforcement system, particularly with respect to bailiffs. It is well overdue, and we ask the Minister to consider going a step further.

The new clause would be a useful, radical and simple provision. The entire process is complex and confusing in law. The new clause is straightforward: it would require bailiffs to be given a uniform. That would not replace the ID that they are expected to carry, but work in addition to it. In researching the subject, I was interested to come across a BBC documentary on bailiffs. It included some undercover work, which showed the attitudes of people whose goods were taken away and of the bailiffs, who worked for private companies, many of whom were labelled as hired thugs. That does not do the industry any good whatsoever.

The new clause would put a more acceptable face on the work of the bailiffs. We see uniforms used in many walks of life, not only in the military, but in other security companies and in the NHS. A uniform shows a degree of authority; it shows status and helps to generate respect. That is exactly what is required of bailiffs, particularly those who work for councils, private bailiffs and so on. That is why we wish to introduce the new clause.

In rare circumstances, bailiffs operate in conditions in which they are not sure what to expect. There might be a requirement to wear additional protection, which could be part of the consideration of the uniform.

The new clause says that the Crown employee

‘must at all times wear a uniform as prescribed by the Secretary of State.’.

It would be fair to say, Mrs. Humble—this is no reflection whatsoever on your chairmanship—that the Bill has not been the sexiest one that has gone through the House. [Interruption.] It is not a Bill that immediately grabs the limelight. However, judging by the level of noise that that comment has generated, I am pleased to see that perhaps my thoughts on the Bill should be put into question. The way that the new clause is written provides an opportunity for the Minister to throw a little public limelight on to the Bill and on to the workings and proceedings of the Committee. The Minister might consider coming up with the first design of that uniform.

Vera Baird (Labour, Redcar)

Bottle green.

Tobias Ellwood (Conservative, Bournemouth East)

Indeed. From what I hear in the tea rooms, the Minister is considered to be quite a trendy dresser; in fact, that is reflected in what she is wearing today.

This is a fantastic opportunity for us to showthe workings and proceedings of our Committee, regarding something that is perhaps considered light-hearted but is actually very serious. The new clause would be a simple but important addition to the legislation, and I certainly hope that the Government will view it sympathetically. We have developed it in consultation with those in the industry, who are also keen to see such a measure. I am also pleased to see that the Liberal Democrats are supporting it, and I certainly hope that the Minister will consider doing so.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

We are indeed very supportive of the new clause, and the Minister indicated the other day that she was sympathetic to it, so we are hopeful that we will make some progress.

When we added our names to the new clause, Ihad not anticipated that the hon. Member for Bournemouth, East, with his military background, would see uniforms as the way of sexing up the Bill, but there we are. I understand now that that idea is compatible with his past and links his past with his present, and it may be an additional argument in favour of the new clause.

There is a strong case for this proposal. People often do not know who is at their door; people often claim to be people whom they are not, and people regularly allege that they have a right to enter a property. We often read in local papers all over the country that people pretend to have authority on behalf of a utility company, a bank or finance company. One way of minimising that risk is to ensure that people are in uniform. I remember that we had such a debate in another Committee, when we were considering legislation in relation to people who have a right to come into people’s homes.

I hope that the Minister is sympathetic to thenew clause. We do not pretend that the drafting is perfect, but it seems to be a perfectly good, sensible proposition, which is absolutely in accord with the public mood about how bailiffs and those in the enforcement agencies should conduct their business.I therefore hope that the Minister will give us a sympathetic response.

Emily Thornberry (Labour, Islington South and Finsbury)

I am someone on the Committee who has perhaps had a fairly unique experience in this area. When I was seven years old, my mother and my family were thrown out of our house by bailiffs. The bailiffs were all wearing bowler hats; that was their uniform then. It was a profoundly embarrassing experience. I remember that, even though I was only seven, I was profoundly embarrassed by it. We must counter all the discussion about uniforms with this consideration: if a group of uniformed bailiffs were to appear on an estate, it would make the process that much more difficult and oppressive for the family who were suffering it and much more terrifying for the children.

Vera Baird (Labour, Redcar)

That is a terrible tale, and I can imagine that it is etched on my hon. Friend’s memory, not least because of the bowler hats, although I would have thought that it was generally a pretty awful experience. However, it is probably better to return to the level that we were at when the hon. Member for Bournemouth, East moved the new clause. I am pleased that he thinks that I am a trendy dresser; I shall probably go away for the weekend a happier woman for having received that compliment. I would be very pleased to design a uniform for anyone, really. He thinks that this is not a sexy Bill; all I can say is that he has not seen the rest of them.

My primary point is that the issue in the new clause is not one for the Bill. Opposition Members will understand why we could certainly never accept a new clause stating that both private and Crown employees must at all times wear the uniform—in bed or what? Clearly, a bit more thought must go into the whole thing. I accept completely in principle the need for proper identification of a bailiff to be made plain, at least—and following what my hon. Friend the Member for Islington, South and Finsbury said, possibly at most—to the person who is being visited. We will design an identifier with a unique number on it so that there is no difficulty in knowing exactly who is coming to the door, their status and nature. The identifier will have a number; it will probably have a name too, but the number is important. We will ensure that people know who is coming to their door.

I can see the argument that the public would have increased confidence in enforcement if they saw people in uniform, and I am not unsympathetic to it. They would have increased confidence that the people empowered to do the work were regulated, as they would look more regulated if they were wearing uniform. Opposition Members who have had their ears close to the ground on submissions to the Committee will know that there are concerns about uniform: for instance, that it would make people an easy target. I have had it said to me that when fire officers go on to estates they are sometimes stoned, and bailiffs worry about what might happen to them if they were known to be going into particular areas and their presence were advertised by their uniform.

My hon. Friend the Member for Islington, South and Finsbury made the point that if somebody has to go through the humiliating process of having their goods taken away because of debt, out of respect it ought to be done as discretely as possible. Uniform would militate against that. I am well aware of theneed for proper identification, as is my noble Friend Baroness Ashton, but we are not convinced that a uniform is the right form. We certainly would not state in the Bill that bailiffs should wear a uniform at all times.

There will be times when bailiffs want to have the protection of a stab vest or something of that kind when using their powers of forcible entry, so there may be occasions when it would be in everyone’s interest for us to prescribe that they should dress in a particular way, but there needs to be flexibility. The issue of how to identify bailiffs is very much in the Government’s mind, and we will return to the matter in regulations.I hope that that is sufficient reassurance to allow Opposition Members not to press the new clause.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am grateful to the Minister for her sympathetic response and I am perfectly happy to accept the proposition that the matter be dealt with in regulations rather than in the Bill. I understand the point made by the hon. Member for Islington, South and Finsbury and I wish to add two reflections.

I am dealing at the moment with a case in which there is a dispute between a constituent of mine and a local authority—not our local authority—about the enforcement of liability. It arose, as it happens, from parking fines. One issue in dispute is whether the bailiffs came on the days when they say they came. My constituent says that on certain days he did not see them; he was in, they did not come to the door and nothing was put through the door. The bailiffs say that they came and that they called. It would be easier for that issue to be resolved if the bailiffs had been publicly identifiable, because other people would have seen them and there would be more evidence. People would remember that more clearly, as they would remember a police or fire officer or someone else in uniform coming, than when bailiffs have no uniform and come in civilian clothes, even if they had to present a number, name badge or warrant.

I reflected on the second point when I had a letter this week about another case that I am dealing with. A constituent, with my help and that of my constituency office team, has reached a satisfactory resolution with some bailiffs. Her remaining complaint is that they have added an excessive fee for

“attending with a view to removing goods”—

a charge on top of the original liability order. My constituent is being charged a fee even though she had been trying to contact them to resolve matters and to prevent them coming round to the house. Her letter ends:

“I am enclosing the last letter I received from”

the particular bailiffs’ company

“giving their version of events.”

The gentleman from the bailiffs

“fails to disclose in the letter my many attempts to get in touch with his firm to settle the debt but they refused to listen, insisting that the only option left was to call at my home to remove goods. I am sure you can appreciate that such tactics are commonly used by bailiffs to get more money out of people and that is what they have done in my case.”

Other important things follow as well—records of communications between people and bailiffs are often crucial. People often say that they have tried to leavea message, have left a message or have sent a letter.I ask the Minister to consider that, in the context of uniforms. I also understand the sensitivity of the example from personal experience of the hon. Member for Islington, South and Finsbury. However, just a name badge or warrant is not sufficient, certainly for older people, people of less intelligence, people who do not have English as their first language or speak poor or no English, or people who are blind or with poor sight. We can all think of such people in every constituency in the land. We need to think of a way that makes the process acceptable to all parts of the community.

I also ask the Minister to reflect on the linked issue of how we can establish a system that traps the communications as efficiently as possible, before people ever come to the doorstep. Ideally, we do not want bailiffs coming to people’s doorsteps; the bailiffs should be able to do their business beforehand, by communication, by letter, by arrangements being made. We need to civilize the process a little.

My last point concerns the last bit of debate on this subject. I think that the local authorities should be able to help with this job more than they do. I am talking generally. Local authority and other debts are eventually passed over to the bailiffs—for example, council tax or other arrears. That is understandable.

Joan Humble (Labour, Blackpool North and Fleetwood)

Order. The final point of the hon. Gentleman is not part of our discussion on uniforms. Could he get back to uniforms or conclude his remarks?

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

Absolutely. I want to link my point to local authority people who are now out and about in uniform. I apologise if that was not obvious.

Local authorities, such as mine, often have neighbourhood wardens, who are in uniforms. We have just agreed, as a matter of policy, that all our housing department officials working on estates will have uniforms. That is a way of narrowing the responsibility for the local authority and trying to avoid bailiffs doing the job. The better course of action is to have, as part of the process, yes, the bailiffs when needed—in uniforms—but first, ideally, people who are always out and about on the estate. They are there for a different purpose than the hon. Member for Islington, South and Finsbury suggested. They do not look like special, alien people coming on to the estate.

Could the Minister, her officials and their colleagues in the Department for Communities and Local Government reflect on how bailiffs and their uniforms can tie in with the increasing development of local authority personnel with uniforms? The public wish people in authority—those with powers over them or having an obligation in relation to their property or the goods in it—to be identifiable. I take the point that the first people who come do not come with a particular threat. Possibly some of the earlier work could be done by uniformed people who are employed by the local authority and out and about on the estates. Will the Minister reflect on that and respond to me in writing, having considered how we can combine such work with that done by local authorities and other Departments?

Tobias Ellwood (Conservative, Bournemouth East)

Although we might not all agree entirely on the wording or, indeed, the principle of the new clause, it has been helpful in raising some of the challenging issues surrounding the mechanics of how bailiffs go about their duties. I thank the Minister for her reply and her concessions in agreeing on some of the issues that we have tried to highlight—in particular, identification.

Clearly, there is a thin line between respecting the concerns of the resident, as we heard from the hon. Member for Islington, South and Finsbury, and improving the status of the bailiff. As the hon. Member for North Southwark and Bermondsey just said, others, such as police community support officers, go about their daily business in uniform. In a coupleof estates in Bournemouth, members of volunteer organisations wear a sort of uniform—a pullover with an insignia and label, which is provided by the borough council to show that they are part of a team working together in a friendly manner. We must bear in mind also that in many cases where there is a concern that a visit might cause problems, bailiffs are often escorted by the police anyway. Carrying out such duties covertly can be a bit tricky. We cannot get away from the fact that they must be overt—that is the way forward.

We were hoping, however, for more of an agreement from the Minister. I wonder if, between now and Report, she will consider a compromise on a wording in order to improve the identification process, which is what we tried to achieve with the new clause. On that note, I beg to ask leave to withdraw the motion.

New Clause 6

Henry Bellingham (Conservative, North West Norfolk)

I beg to move, That the clause be read a Second time.

We now move from the slightly racy subject of uniforms to a more arcane and lugubrious matter—judicial review. Nevertheless, it is important. The new clause states:

“The actions and decisions of private companies and their agents”—

it remains to be seen whether they will be wearing uniforms—

“enforcing the orders of the courts shall be reviewable in the High Court.”

The reason for the new clause is simple: when enforcement is undertaken by agents employeddirectly by the courts, Crown agents or Her Majesty’s Government, the actions and decisions of the court and agent in question are reviewable by the High Court. Having researched that matter, I am virtually certain that I am correct in saying that. At all times their actions can be subject to judicial review.

On the other hand, when enforcement is undertaken by a private company and its agents, which happens a lot, their actions might well not be reviewable by the High Court. I am particularly concerned about arecent case: Heather and others v. Leonard Cheshire Foundation heard by the Court of Appeal in 2002. As I understand it, that case is still on appeal to the House of Lords. What happened was that elderly people were placed in the care of the Leonard Cheshire Foundation by the local authority. The Court of Appeal found that if they had been placed in a local authority homethey would have had the protection of the courtfrom unreasonable or perverse actions and decisions. However, the Court of Appeal ruled that they could not make use of those rights of protection from the court because they were in an independent, private home.

There is a substantial concern that if that rulingis upheld and applied across the board to private organisations and operations of all kinds, including sub-contractors for local authorities, there will be no possibility of judicial review in the High Court. We are therefore faced with a contradictory situation. We know that judicial review is available when it comes to the actions of court bailiffs—that is, Crown agents. The Minister has said on a number of occasions that she wants a unified and consolidated service, so that everything is brought back under one piece of legislation and everyone knows exactly where they stand, be they consumers or creditors, or commercial organisations trying to enforce their debts or debtors. Basically, there will be one law for everyone.

We know from what we have discussed so far, however, that there are in fact one or two different powers in different parts of the Bill. I would have thought it necessary to ensure that all bailiffs are treated in the same way when their actions are reviewed. For all creditors, whether their debts are being enforced through Crown agents—that is often the case if a Government body of some kind is involved, but not always—or through private bailiffs, and for all debtors, whichever type of bailiff is dealing with the matter, surely there should the same level playing field when it comes to one of the ultimate recourses to justice available to people in this country: judicial review.

We feel strongly about the new clause, which would put those private bailiffs on exactly the same footing as Crown agents—in other words, those agents directly employed by the court or by Her Majesty. On the basis of wanting to make things simpler, easier and fairer, I commend the new clause to the Committee.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

My hon. Friend the Member for Cardiff, Central and I support the new clause, and hope that the Minister’s response is positive.

Vera Baird (Labour, Redcar)

Judicial review is the supervisory jurisdiction of the High Court over an inferior tribunal or a public authority. The hon. Member for North-West Norfolk referred to the case of Heather and others v. Leonard Cheshire Foundation, which is a Human Rights Act 1998 case that concerns the question what constitutes a public authority. When the 1998 Act was passed, it was intended that the definition of a public authority would be a functional one. That is to say—to use the hon. Gentleman’s example—that if a public service is being delivered by a local authority,it is definitely a public authority. If the service is contracted out to a private provider, as long as that body carries out a public function, it, too, should be a public authority and come within the definition of the 1998 Act, even though it is a private body. The issue in the Leonard Cheshire case was whether that body fell within the definition of a public authority. The ruling was that it did not.

I am not sure that that case is going to the House of Lords, but there are other cases on the same point, which is quite a knotty problem from a human rights perspective. When I was on the Joint Committee on Human Rights, I initiated an inquiry into the current state of the law on public authorities, which is a troubled area. One wants to avoid giving rights with one hand under the Human Rights Act, but then taking them away with the other by contracting out services. The issue remains an area of contention, but I do not think that it has direct application in this case.

Henry Bellingham (Conservative, North West Norfolk)

The Minister does, or does not think so?

Vera Baird (Labour, Redcar)

I do not, and let me say why. I hope that I can satisfy the hon. Gentleman as to why not. His argument rests on two assumptions. One is that High Court enforcement officers are Crown employees.They are not; they are business men and women, independent of the Crown, who have been appointed to the post on behalf of the Lord Chancellor by the Senior Master of the Queen’s bench division of the High Court.

I think that the other assumption, which probably follows from that first misapprehension, is that those in question are subject to judicial review. They are not; they are subject to the supervisory role of the Senior Master of the High Court. In that sense, they are reviewed by a lower-level judge in the High Court, but they are not subject to judicial review by the divisional court. The Senior Master has a complaints procedure in his hand, which is right and proper, because he has made the appointments and is responsible and liable for the enforcement of High Court writs. It is correct that complaints should go to him. However, that is not judicial review by the divisional court, which would not, in any case, be the right sort of remedy to seek.

Judicial review is about supervising decisions to see whether they have been made in a situation that is unreasonable—that is, contrary to the Wednesbury reasonableness test—or in which something has been incorrectly taken into account or left out. The officials in question do not make decisions, however; they implement decisions that have already been made by the court. In this case, they would be implementing decisions made by the High Court, and the supervisory jurisdiction of the High Court cannot supervise itself.

The proposed approach rests on two erroneous assumptions, and it would deny us the single area of enforcement law that we want, as it would remove private companies and agents and put them under a different regime—one that would not fit and is not in force at present, and which would be wholly impractical for the reasons that I have stated, as I hope the hon. Member for North-West Norfolk will accept.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am following the Minister’s argument and understand it. First, can she tell us what sanctions the Senior Master of the Queen’s bench division has under either the present or the proposed regime? Secondly, if we want to have one common regime, could somebody who has the necessary authority have brought under his wing the activities of bailiffs who are not court bailiffs? It would be good if somebody who was able to manage people well came into play before anybody felt that they had to start taking criminal or civil action.

Vera Baird (Labour, Redcar)

At the moment, the master can removea person’s authorisation to act as a High Court enforcement officer. Presumably he issues warnings and so on in advance of taking that fairly draconian step, so he has a lot of power. The hon. Gentleman will be aware that the Bill contains remedies and that, as we discussed, it is intended to ensure that there is proper regulation by the Security Industry Authority in the case of one kind of bailiff and, as clearly stated by my noble friend Baroness Ashton in the Lords, parallel regulation of those who are not private bailiffs. Hon Members have little to worry about. There is already a civil service complaints procedure in relation to county court bailiffs. The measure would not fill a gap or bring coherence; it would be an odd measure to introduce and is based on two erroneous assumptions seized, I think, by Rev. Paul Nicholson.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister. It was not Rev. Paul Nicholson who came up with the suggestion; it came from a colleague of mine at the Bar. One of the points that my colleague made—I should be grateful if the Minister considered it—was that High Court enforcement officers, who are employed by the Crown, are subject to the Wednesbury rules, but those employed by private companies are not. Can she comment on that?

My other point relates to the supervisory role of the Senior Master. Is the Minister saying that there are no circumstances in which judicial review could be employed against bailiffs? As she said, bailiffs do not take decisions, and the essence of judicial review is to challenge and review decisions, but there have been cases in which bailiffs have had not only to implement decisions made elsewhere, but to use their own intelligence and judgment. I should have thought that that came very close to a decision-making process, and although such things might happen only rarely, I can envisage cases in which there could be a strong argument for judicial review. Perhaps she could comment briefly on those additional points and further put my mind at rest.

Vera Baird (Labour, Redcar)

I am happy to do my best. High Court enforcement officers are not subject to Wednesbury rules. To say that they are is a different way of putting the allegation that they are subject to judicialreview, given that the principle of Wednesbury unreasonableness applies to judicial review—it is the same misapprehension repeated in a different way. I would not want to say categorically that judicial review could never apply to a High Court enforcement officer, but it seems an odd notion, given that High Court supervisory jurisdiction is intended to apply to lower tribunals and public officials. Given that a High Court official implements that jurisdiction, the High Court would be reviewing itself, and it does not have a power to do that. At the very least, such a concept—it might not be impossible, although it might well be—would be very awkward and would fit poorly with what I hope is a coherent system that has plenty of protections.

Henry Bellingham (Conservative, North West Norfolk)

I am very grateful to the Minister and I shall have a word with my learned colleague at the Bar to put him right on this issue; indeed, we may well correspond on it in the future. However, I am grateful to the Minister for clarifying things and, on that basis, I beg to ask leave to withdraw the motion.

Clause 87

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

We now move to part 4, which is about the enforcement of judgments and orders. I have a couple of points about the importance of this part of the Bill and of getting it right. I seek the Minister’s help in setting the issues out, and I think that this is the right clause to do that.

If the Bill goes forward, procedures can be applied to ensure that all the information that is needed in the courts is in the same place. My question is about all court proceedings and comes from my experience in the courts in my previous life and as a constituency MP dealing with such issues. Like all hon. Members, I deal with matters relating to tax, tax credits, benefits, the Child Support Agency and payment orders after a divorce or marital breakdown.

My general objective is that we should give the courts the ability to obtain from all those who are properly authorised and from the appropriate departments the information that they need to make appropriate orders. My concern is greatest historically, and I have two circumstances in mind. First, in criminal matters, people who have come before the court will put to it a statement of their position when it decides what penalty, fine or other punishment to impose. My experience until recently has been that the court often does not have any information other than that given by the defendant or the person representing them.

In a way, the more worrying sorts of case are those in which somebody is trying to escape a civil liability, often to a member of their family or someone to whom they have a personal obligation. It is normally a man trying to reduce his proper liability toward his wife or partner or, quite often, his responsibility for his child. However, the third sort is a case in which someone is clearly trying to give the run-around to someone to whom they owe money by pretending that they do not have it.

In terms of attachment of earnings orders, the Bill contains a welcome proposal to give the court powers to find a debtor’s current employer—to track them down by their employer, if they are employed. My understanding is that two major Government bodies, a Department and an agency, will now be the normal source of information. The Department for Work and Pensions should have social security records and all the other information. The agency is Her Majesty’s Revenue and Customs, which should have information about people’s incomes and how much tax they are paying. Those are the two major places to look for such information.

I do not yet know, and I have not been able to check in the time available, whether each will have the power to exchange information without authority. I am always careful about not giving Departments power to swap information around. That would have to be authorised. I am quite keen to know whether, for example, if a request were made to the Department for Work and Pensions under the measures to provide information to the court, it would have the right to check things with HMRC or vice versa.

Other people also have information that is relevant if a matter is before the court. The local authority will know, for example, in whose name the council tax for a property is paid and who is registered as the owner of the property. There might be other information. My question is a request at the beginning of this short debate for the Minister’s help. I have read the explanatory notes, the Library notes and the Bill, and I am keen for the court to have the maximum availability of information.

I have two last points, one of which is procedural. A lot of court time is wasted when matters come before the courts, the information is not there and the courts must order that it be provided or sought. Is the Minister satisfied that the Bill will avoid court appearances wherever possible—in other words, that it will ensure that as much work as possible is done on paper without people having to appear? That would save huge amounts of time and effort. In particular, if there is difficulty tracking down someone who is reluctant to appear in court—they may not want to own up to their obligations and not be willing to pay the money that they owe—getting them to court once might be difficult, but getting them there a second or a third time might be just as difficult, if not more so. It seems to me from my experience that the court system, whether civil or criminal, could save a lot of money if we minimise the time for which we expect people to appear in court to deal with such matters.

How can people on whose behalf information is given to the court challenge it if there is a dispute? We all encounter such cases. I am dealing with a tax credit case at the moment involving a serious dispute about liability. It all has to do with what box was ticked on the form and so on. It is a proper dispute, an MP has become involved and it is therefore being taken seriously by HMRC. If the information comes before the court, as it should in the name of maximum information to minimise problems, and it is alleged to be untrue—that may happen if somebody owns a property but has sold it, or owns a property of which somebody else is the tenant—how will we ensure that the court can obtain that information? I ask out of concern from my own experience. Can the Minister help? This is an opportunity to get those things right, and to have the most effective and streamlined system, while ensuring that it is compatible with people’scivil liberties and rightful protection of personal information.

Vera Baird (Labour, Redcar)

We are talking in this clause only about attachment of earnings orders, and the point of it is pretty clear, of course: it applies where somebody’s earnings are attached under an AEO and they change their job, but do not tell the court the new employer’s details. I am not quite sure what the hon. Member for North Southwark and Bermondsey was referring to when he talked about tenancies or people having moved out of their addresses. The provision is about attaching earnings and facilitating the court in tracing somebody who has moved jobs and who does not want to let the court know that they have done so.

My understanding is that the DWP and HMRC share the same database, so it is the same issue. The clause will enable HMRC to provide to the courts, for the purpose of redirecting the AEO, information that it has on file about the employment of the judgment debtor. It enables an AEO to be reactivated if the situation lasts. It is likely that the judgment creditor will be the person who knows that the money has stopped, so they will need to come and tell the court in order to initiate the procedure. That probably requires them to fill in another form or make another application, but it seems hard to get around that requirement, since they will be the person who knows.

Apparently, there will be an ability to seek a hearing with a judge if either party is unhappy with the way in which things proceed. That is what one would normally expect, but it is hard to envisage the sort of mistake that the hon. Member for North Southwark and Bermondsey described. All the provision is about is whether somebody has moved to a job wherever else; if that is confirmed, the court will contact the employer and transfer the AEO. If it is not confirmed, the information could be incorrect; the person may have moved on again, even before HMRC has had time to pin him down. That is really all that this issue is about.

Of course, there is a very great need—the hon. Gentleman asked how much information we should make readily available in these circumstances—to ensure that the Human Rights Act 1998 is complied with, and to ensure a proportionate balance between the privacy of the individual and the rights of the judgment creditor. Of course, article 8 of the European convention on human rights is a conditional one and in this case is rightly in balance because the rights of the judgment creditor are put high up. However, that is all the information that is required in order to make the power work. I hope that I have satisfied the hon. Gentleman that his fairly wide-ranging concerns are without foundation and that this is a pretty straightforward measure.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I was trying to make points about this and the subsequent clauses rather than make such points on each one. I am grateful to the Minister, and I share her view that we have to balance people’s human rights. I have said explicitly that we should not have greater access to information than we need.

Will the Minister deal with one other matter that I raised? Is she satisfied that in this clause and the others in this part of the Bill, we are avoiding people having to come to court other than in the most exceptional circumstances? Has this part of the Bill been proofread to avoid any unnecessary or excessive court appearances, so that we keep down the risk? I am not objecting at all to people filling in the form; I would rather it was done in that way to minimise time and expense.

I have one last small point. Proposed new section 15A to the Attachment of Earnings Act 1971 refers to “the commissioners”. I presume that they are commissioners of Inland Revenue, whom I think we are abolishing elsewhere in the legislation on tribunals. Can I have an assurance that we have done the cross-referencing across the whole Bill, so that if we are ending up with a new structure, we are not left with anomalous terminology?

Vera Baird (Labour, Redcar)

Yes, I can reassure the hon. Gentleman about that point, but I do not think that it presents a problem. What is happening is that the Bill is correctly reciting earlier legislation; the commissioners have been included in order to amend it. Any subsequent changes introduced when the Bill is enacted, however, will knock on to those provisions and change the terminology if it is no longer appropriate. I think that that is the right sequence.

Essentially, this is about a form-filling exercise. I imagine that people will be able to get the form online; lots of forms are available online now. I cannot exclude the possibility that someone who is not connected to the internet will have to go to the court or a citizens advice bureau to get one, but a court hearing is not necessary.

Clause 88

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 136, in clause 88, page 57, line 5, at end insert—

‘(9) Where the judgment that is the subject of a charging order application relates to an agreement regulated by the Consumer Credit Act 1974, the court shall not make a charging order if an order under sections 129 to 135 of that Act is appropriate.’.

Joan Humble (Labour, Blackpool North and Fleetwood)

With this it will be convenient to discuss amendment No. 137, in clause 88, page 57, line 32, at end insert—

‘(4F) Where the judgment relates to an agreement regulated by the Consumer Credit Act 1974, the court shall not enforce the charge by an order for sale.’.

Henry Bellingham (Conservative, North West Norfolk)

I will not detain the Committeevery long on the amendments. The clause deals with charging orders. I have a specific concern about the Consumer Credit Act 1974 and various issues relating to agreements under that Act. The amendments are designed to resolve a possible conflict between the Bill and the 1974 Act. As it stands, the Bill might permit an unsecured creditor to obtain additional security for the debt.

When an unsecured creditor lends money or provides goods they incorporate in the price of the overall arrangement the concept that the debt is unsecured. That is inherent in the contract and the deal that is being done. If a secured debt were created, no doubt the cost of it to the debtor would be cheaper. The Bill gives an unsecured creditor the value of security. Generally speaking, for people who are not very well off, it means a charging order on their home. The clause introduces changes to the Charging Orders Act 1979, which provide creditors with a way of enforcing a court judgment by placing a charge on the debtor’s property.

A creditor who uses that procedure can secure a previously unsecured debt. A creditor who obtains a charging order can obtain a court order to sell off assets, subject to the charge, although obviously such sale orders are pretty rare. The Bill proposes that, even though there is an agreement between the creditor and the debtor for the repayment of the debt by agreed instalments and the debtor is keeping up those instalments, the creditor can obtain a charging order and ultimately bear down against the debtor’s home and arrange to have it sold off.

That concern has been put to me and my hon. Friends by Citizens Advice and other organisations. It relates to the interface between the Bill as it stands and agreements made under the Consumer Credit Act 1974. If we are looking at a package involving a debt agreement, different guidelines and ground rules will obviously apply to that debt if it is unsecured. The creditor should not be able, however, to gain extra security through the backdoor.

These are probing amendments. I should be grateful if the Minister put my mind at rest about whether there is a conflict between existing legislation and the Bill as it stands. What we do not want is to give additional, unforeseen, unintended rights to creditors that could well apply at the expense of debtors.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I, too, shall be brief. My hon. Friend the Member for Cardiff, Central mischievously saidto me that I should thank the hon. Member for North-West Norfolk for so effectively deploying, sentence by sentence and word for word, the arguments put by our noble Friend Lord Thomas of Gresford in the other place. I will tell our noble Friend that the hon. Gentleman put the case well.

There was an interesting little debate in the other place on this issue on 14 December, but at the end of it no one, including those who participated, were entirely clear about the outcome. I have read it twice, and I think we are all trying to get a third stab at it.

I stand to be corrected, but as I understand it, if somebody is paying off by instalments an unsecured loan on a car, for example, the issue is whether it should be possible for the creditor to come back and say, “You have kept up your instalments and paid the money, but I want more now. I want to secure the loan and have a charging order, and I will put a charge over your garden shed, garage or house.” Should it be possible for someone who has honoured their obligations and paid up—there is no question of their having defaulted—to be the subject of a stronger remedy?

The Consumers Association was concerned that that would tip the balance wrongly on the side of the creditor and against the debtor. We would argue that a good, paying debtor should not be subject to further impositions on their property if they have kept to the agreement that they entered into.

Vera Baird (Labour, Redcar)

I heard the hon. Member for North-West Norfolk compliment the hon. Member for North Southwark and Bermondsey on the way he put his argument, but as the former was reading from the speech made in the Lords by the latter’s party colleague, I have some doubts about what was said. I shall put my argument first and then consider the detail of what has been raised, and I shall be happy to give way if I do not get to the points the hon. Gentlemen are concerned about, although I think I have grasped them.

First, we are concerned that amendments Nos. 136 and 137 could be seen to interfere unduly with judicial impartiality and discretion when considering whether to grant an application for a charging order or anorder for sale—they are, of course, quite separate applications and procedures—in the case of debts that are regulated under the Consumer Credit Act 1974. Clearly, judges will consider applications for the granting of those orders in a proper way, but to require them to favour the debtor is dangerously close to leaving them open to a charge of bias.

The issue has been raised several times before, when the judicial viewpoint was that judges did not wish to have the responsibility to take the risk of looking as if their impartiality might be compromised. Their stance has not changed; in fact, Baroness Butler-Sloss, speaking in the Grand Committee in the other place on 14 December, reinforced the need for any decision about the granting of a charging order to be a judicial one subject to discretion and not in any way trammelled.

When judges consider whether to grant a charging order or, indeed, take the later step by granting an order for sale, they are looking at a judgment debt. The originating source of the debt is by and large immaterial, and it would be inappropriate to place a restriction only on debts regulated by the Consumer Credit Act 1974. The creditor, who has legitimately obtained the judgment, has the right to seek enforcement by the most appropriate means available, including by way of a charging order or an order for sale. Equally, the judge has the right to decide whether he or she shall have one or not.

Broadly, two concerns have been aired. The first is obtaining priority by being able to secure a debt that would otherwise not have priority. In fact, the terminology in the statute is such that the debt does not become a secured debt by the charging order process. It is the judgment that is secured on the property, so there is not an inappropriate impact on priority. I hope that that covers one issue.

The other issue is whether a charging order should be available to somebody when, as the hon. Member for North Southwark and Bermondsey put it, the judgment debtor is complying with their obligations to pay. Let me make it clear that we are not talking about an order for sale on the property; we are talking only about charging the debt on the property. That is intended to avoid the mischief of a person agreeing to pay £4 a week off a £10,000 debt when they have a property somewhere that was perhaps not known about when the original agreement was made. They will now be totally free to simply sell the property off, bring into their own resources an amount of money—for example £100,000—and carry on paying the debt off at a low level. It is far better for the creditor to have what would in every other circumstance lie as a dormant order over the property unless and until there is a need to apply for a sale. Such security should be left in place so that if an occurrence such as the one I have described takes place, people have the security and can get the money back appropriately rather than waiting for the instalments to tick over for years and years. However, I emphasise that there is a big difference between a charging order that simply sits on a property and an order for sale. There is a completely separate, additional procedure for the order for sale.

Brooks Newmark (Conservative, Braintree)

I hope that the Minister will indulge me in this question. Is she saying that somehow the person who owes the money has deceived by not listing their assets? Usually, when someone has an obligation they must list all their assets and if they do not, they have broken the law in some way. Alternatively, is the Minister saying that if somebody suddenly wins the lottery or inherits a new house, there is a new asset to which a creditor can have an attachment? It would be helpful if that could be clarified.

Vera Baird (Labour, Redcar)

It could probably be either. Yes, of course, if somebody did not disclose their assets when required to by the court, they would have broken the law. We are talking about the need for a quick remedy to deal with that problem. Such a remedy is available by charging any property that comes to the creditor’s notice through the court process in the way that Ihave described. On the other situation, if somebody inherited something or, as the hon. Gentleman says, won the lottery and bought something that could be charged, it is realistic that, the circumstances of the debtor having changed, there is an ability to make use of that change.

Brooks Newmark (Conservative, Braintree)

I understand the first point that the Minister has made. However, on the second point, let us say that, hypothetically, I have a debt to which my assets are attached. Let us say that I then clear my debt obligations in the instalments that were, for example, laid out by the hon. Member for North Southwark and Bermondsey, pay off what I have agreed that I owe and suddenly five years later, I inherit a house or receive another asset. Is the Minister saying that the court has the ability to grandfather a decision that was made earlier and attach the asset so that the full amount that was owed rather than the part that was paid off would have to be paid off five or 10 years later?

Vera Baird (Labour, Redcar)

The first requirement is the debt, so if a debt has all been paid off, the ability to charge any property does not exist because there is no debt. Thatis condition number one. If the hon. Gentleman is talking about some form of compromise between parties and unpicking that compromise by means of this—

Brooks Newmark (Conservative, Braintree)

If I am not explaining myself,I apologise. I am saying that usually in a debt negotiation, I cannot say that—

Joan Humble (Labour, Blackpool North and Fleetwood)

Order.

John Bercow (Conservative, Buckingham)

I remind the Committee that with this we are taking amendment No. 137, in clause 88, page 57, line 32, at end insert—

‘(4F) Where the judgment relates to an agreement regulated by the Consumer Credit Act 1974, the court shall not enforce the charge by an order for sale.’.

Brooks Newmark (Conservative, Braintree)

Once again, Mr. Bercow, it is a delight to see you in the Chair. I was in full flow when time was called on the morning sitting, and I would now like the Minister to clarifyan issue concerning charges over assets. It is my understanding that, once a deal has been done, when payments of an amount have been made over a certain period, and once the agreed debt has been pegged down, individuals will not incur additional charges should they suddenly gain further assets. Will the Minister clarify that?

Vera Baird (Labour, Redcar)

The essential precondition for a charging order is a judgmentdebt. Before going to court, the parties may reach a compromise. If the hon. Gentleman lends me £10,000 and I say that I will never be able to pay it back, but then say that I will repay £5,000 in six months, we can make an agreement on that basis. I get half my debt remitted and the hon. Gentleman gets £5,000 when he might have had nothing. If we agree to such a contract, there will be no debt left. If I subsequently come into further assets, there will be no debt on which to charge those assets. I hope that that clarifies the matter.

I should make it clear, if I did not do so earlier, that there is no intention that a charging order should be converted to an order for sale while the debtor is still paying their instalment order. The measure offers extra protection, but it is not intended to be used in thatway. With that, I hope that the hon. Member for North-West Norfolk will withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

Is the Minister saying that, if instalments are being paid on time and the instalment register is up to date at all times, there cannot be an order for sale? That is not in the Bill. Will it be in the regulations?

Vera Baird (Labour, Redcar)

Clause 88 (2), proposes a new subsection (7) to section 1 of the Charging Orders Act 1979, so that it will state:

“The fact that there has been no default”

will

“not prevent a charging order from being made”.

Proposed new subsection (8) states:

“But if there has been no default, the court must take that into account when considering the circumstances of the case under subsection (5).”

As I understand it, as long as instalments are being paid, those measures will prevent forced sale. By way of further clarification, the Bill adds a section (4C) to section 3 of the 1979 Act, which states:

“The charge may not be enforced unless there has been default in payment of an instalment under the instalments order.”

Henry Bellingham (Conservative, North West Norfolk)

I am grateful for that explanation, on which basis I beg to ask leave to withdraw the amendment.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I want to ask the Minister about one of the provisions in the clause. I was going to raise the issue when speaking about amendment No. 136, but it has been withdrawn. The amendment addresses a kind of mediation—steps that could be taken beforehand so that people would not get into the difficulties involved with charging orders and possession orders. It seems to me that that area is absolutely one for the courts, and that the mediation process and some informality are valuable.

The Minister will recall our earlier debate on how, even when there has been no failure in payment, people can return to court and ask for a charge. With respect to enforcement of charging orders, other enforcement, and changes in debtors’ obligations, what facilitieswill be in place to ensure that all courts offer an opportunity for agreement and negotiation before matters are heard by a judge? Are people offered the chance of some sort of mediation or arbitration in all county courts and High Courts, along with referral to appropriate agencies? The more that that can happen instead of litigation, the better.

Vera Baird (Labour, Redcar)

Has the hon. Gentleman returned to amendment No. 136, which we discussed this morning?

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

No. I meant amendment No. 138.

Vera Baird (Labour, Redcar)

There is never anything to stop one party to a court case discussing the case with the other party. That can occur through mediation that is initiated from within the community, for which several schemes are available, or through a more formal process. In many county courts there is now every encouragement for some sort of proportionate dispute resolution. Pre-action notices and pre-action protocols are alsobeing piloted in various jurisdictions with the intentionof building a mediation or proportionate dispute resolution element into court proceedings. Nowadays, the whole civil justice system is geared to the assumption that one goes to court only as a last resort. Even when people apply to court, it still has the opportunity to persuade them to take a different course rather than rely on its adjudication powers. There is therefore already every opportunity for what the hon. Gentleman desires.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I shall push the Minister a little further, if I may. I am thinking of a situation whereby, today or tomorrow, she, I or you, Mr. Bercow, go to Lambeth county court or Westminster county court in the context of an enforcement proceeding. I am trying to establish whether the court official who first dealt with the case—the listing officer who handled the paperwork—would say, from the beginning and as a matter of course, to applicants, debtors or creditors, “Are you aware that there is someone who may be able to help you with this?” If the problem were with a debtor, would the official ask whether the debtor was aware of the existence of money advice centres and ascertain whether the debtor had spoken to such a centre? Would the official inform that person of the centre’s opening times?

We all know that, with a bit of advice, people can often get out of a hole. For instance, people can be persuaded to transfer their bank or credit company obligations to a credit union that will not charge an annual percentage rate of 27.5 per cent. So is there an assumption in all parts of the court system—county courts and High Courts—that people should be proactively pointed towards money advice and resolution before the case is listed? Creditors might want people to go straight to court, so are court officers obliged to consider alternatives—I hesitate to use the term “cooling off period”?

Vera Baird (Labour, Redcar)

There is nothing to stop debtors from switching their debt to a credit union if they want to. I cannot see what that has to do with the courts. People might or might not know that they can do it.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

That is the issue.

Vera Baird (Labour, Redcar)

But the court may not know whether a credit union exists in the area. They do not exist in every area.

Various piloted pre-action protocols are on the go that involve more or less formal offers of mediation, as the case may be. There are, of course, civil procedure rules that create a general duty on all parties coming to court to settle before the hearing. They are backed up with the ability to make an adverse costs order so that, if the creditor had not taken the steps to which the hon. Gentleman referred, the situation might be deemed unreasonable and produce an adverse consequence if there was an obvious way out of the difficulty. At various stages in the procedures, the court will send notices about where advice is available. Sometimes, it is available at the court itself. Realistically, every effort is made to ensure that the court is, as it is intended to be, only a last resort. I hope that my explanation has satisfied the hon. Gentleman, because I have nothing more to say about the clause.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am grateful to the Minister. We do not have different objectives. I am keen on the matter. Perhaps those who administer our courts will read the report of our proceedings. If they are not in one of the famous pilot areas, they might reflect on whether their processes give the maximum opportunity for people to be pointed in the direction of other court processes that can resolve the issue. I shall reflect on what the hon. and learned Lady said. Obviously, we can return to the matter.

Clause 90

Henry Bellingham (Conservative, North West Norfolk)

I have a quick question about the clause. This part of the Bill is headed “Information requests and orders”. Given the title of the clause 90, I am intrigued by the wording of the provision because it states that a person who is the creditor in relation to a judgment debt

“may apply to the High Court or a county court for information about what kind of action it would be appropriate to take in court”.

In my experience of such issues, albeit many years ago, I should not have thought that there was any need to apply to the court for the information. It should be readily available anyway. Is the clause simply a back-up measure for that small number of extremely rare cases when the information is not readily available so that, if a creditor wants to enforce a debt, he would have to take the matter to court by way of an application to find the information? Will the Minister elaborate on the process?

Vera Baird (Labour, Redcar)

It is the gateway for creditors to get the information request or the order that they need. Asthe hon. Gentleman rightly pinpointed, it is not about the creditor being advised about what is available as a route to recovery. The clause opens up the possibility of obtaining information that will undoubtedly steer the way forward for the judgment creditor. If the court can supply, for example, a new employer, the obvious way forward would be to attach the earnings. However, if a new address or a new national insurance number was available under the provisions to follow, that would point in another direction to a different enforcement. The clause is a gateway provision to enable requests for information to be made.

Clause 91

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 146, in clause 91, page 58, line 34, leave out from ‘make’ to end of line 37 and insert

‘an information order in relation to the debtor.’.

John Bercow (Conservative, Buckingham)

With this it will be convenient to discuss the following amendments: No. 147, in clause 91, page 58, line 41, leave out ‘a request or’ and insert ‘an’.

No. 148, in clause 91, page 59, line 1, leave out subsection (5).

No. 149, in clause 91, page 59, line 7, leave out ‘request or’.

No. 150, in clause 91, page 59, line 11, leave out ‘request or’.

Clause stand part.

Henry Bellingham (Conservative, North West Norfolk)

The group of amendments is about finding out exactly what information can be gleaned from Departments. I am concerned about clause 91(2), which states:

“The relevant court may make one or more of the following in relation to the debtor...(a) a departmental information request; (b) an information order.”

Subsection (5) states:

“The relevant court may not make a departmental information request to the Commissioners unless regulations are in force”.

The clause effectively states that requests for information can be put to a Department, although it does not specify which one.

It is important that we look more closely at what is entailed. I am concerned, as are many people, that the tendency of all Governments in this age of hi-tech and IT is to try to accumulate more information abouttheir subjects and to centralise information. In that way they can have more control over us. Looking forward to what will be possible in future, with further technological advances, I envisage many Departments holding a lot of information on citizens.

Clause 91(2) enables a creditor to ask a court to secure information from a Department about the status—possibly even the financial status—of the debtor. What protection is there for the debtor? How much information can be released? What constraints will there be on a Department in terms of releasing such information? What about confidentiality of information and data? In the other place, Baroness Ashton of Upholland addressed some of those concerns and mentioned that specified pieces of information could be made available, particularly from Her Majesty’s Revenue and Customs. However, having read her response to the short debate in the Houseof Lords, I am concerned about the paucity of the evidence that she gave, which was able to satisfy the noble Lords that this would not be an intruder’scharter and not an opportunity for Departments to supply information on debtors that might be highly confidential.

I am greatly concerned about the principle ofbeing able to get such information from a range of Departments. Our amendment would removeclause 91(2)(a) and (b) and delete subsection (5) and the references to Departments, because we believe that the clause is going too far. I will not push your good will, Mr. Bercow, by mentioning clause 92, which gives more information about what sort of information can be released. We are looking at the principle—

John Bercow (Conservative, Buckingham)

Order. I say to the hon. Gentlemanin a spirit of good will that he is in no danger of exhausting my patience, because clause 92 stand part falls within the group with which we are dealing. Therefore, he is free to expatiate as he wishes.

Henry Bellingham (Conservative, North West Norfolk)

I like the word “expatiate”, Mr. Bercow, but I will not push your good will to its literal conclusion. You are right. I did not want to go into too much detail on clause 92, because no specific amendments to it have been tabled, but I take your point that we can discuss it in under this group.

Clause 92 lists the type of information that can be requested. The Minister may argue that it is limited, simple and basic, but what is “prescribed information”? Will that be made clear in the regulations? Should we really give creditors this amount of power to go to Departments? If we trusted the Government to play fair with consumers, customers and citizens in respect of how information is released already, I would be a great deal more content and relaxed. However, I am not content and relaxed, which is why I have tabled the amendments and moved my amendment.

Jennifer Willott (Liberal Democrat, Cardiff Central)

I want to comment on the points raised by the hon. Member for North-West Norfolk. I share his concerns about the requirement to ensure that information available is well protected in order to safeguard people’s right to privacy. However, I have a question, to which I would like him to respond, if possible. The Conservatives have said that they would like to remove entirely from the Bill departmental information requests, but also to provide in clause 92 for extra information to be made available to creditors—in particular, on driving licence numbers and vehicle registrations. I am confused by the idea that at the same time as wanting no information made available, there is a request for additional information. I would be grateful if the hon. Gentleman could clarify that point.

Henry Bellingham (Conservative, North West Norfolk)

I am happy to explain the situation to the hon. Lady. If my amendments are accepted by the Government and the ability to go to Departments is taken out of the Bill, clause 92 would have a different application. We suggest that the Committee accept my amendments, but if it does not, and the provisions in clause 91 remain, I shall not discuss driving licences and vehicle registration—at this stage. However, such information is basic and could not be regardedas confidential. I am concerned about Big Brother breathing down the necks of citizens and obtaining more and more confidential data. I appreciate the hon. Lady’s point. On the face of it, our stance might seem illogical and I appreciate her giving me the chance to explain it.

Jennifer Willott (Liberal Democrat, Cardiff Central)

I shall come back to that point on the next group of amendments.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I want to make the sort of general points that the hon. Member for North-West Norfolk made and to ask the Minister some questions.

Obviously, we have welcome processes in place for data protection, as well as legislation on freedom of information. I assume that if the Bill is passed, the provisions before us will override the current data-protection arrangements. I should be grateful to know whether they go down the route that the hon. Gentleman suggested and will make further inroads into what personal data is protected. Is this a change in the law or is this retaining the current position? If it is a change in the law on access to further data, what steps have the Government taken to talk to the data protection authorities to ensure that the Information Commissioner is comfortable with the new procedures? Will the Minister reassure us that objective people outside Government have looked at the matter and said that there is nothing to worry about?

Vera Baird (Labour, Redcar)

A lot of objective people inside Government have taken account of data protection. I know that the hon. Gentleman has never been in Government, and I am only a lance corporal myself, but such matters are discussed across Government. Legislative clearance must be given by all Departments to all legislation. We do not go sneaking things on to the statute book without telling our colleagues in other Departments and then say, “Aha, we have got you now!” Obviously, the provisions before us are a change in the law. But are they quite as terrifying as people are suggesting? Look at the information that can be requested—name, address, date of birth and national insurance number of the debtor. That is not terrifying stuff. One must be a judgment creditor before being entitled to apply for such information. Palpably,the gateway provision that I have just discussed with the hon. Member for North-West Norfolk deals with the difficulties of enforcement. Her Majesty’s Revenue and Customs might possess information necessary just to click things into place and permit the enforcement of a debt that the court has said ought to be enforced.

In such a situation, the information would be disclosed not to the creditor, but to the court. That is why the gateway provision is important. The creditor could then ask the court, “How should I proceed from here?”, and the court could say, “Well, why don’t you go down the attachment-of-earnings route or some other route?” It will have information to direct the creditor.

Jennifer Willott (Liberal Democrat, Cardiff Central)

What information does the Minister see as falling under “prescribed information”, which is the general catch-all at the end?

Vera Baird (Labour, Redcar)

It is not a general catch-all. It mustbe carefully dealt with. What we are looking at is nomenclature changes in Government or some Government services. In other words, changing the means by which information is requested. We have no intention of asking for sensitive tax information, which may be held by Her Majesty’s Revenue and Customs. There is a control over the use of any power, which is that it must be compatible with the purpose set out. There will be no conceivable purpose in disclosing sensitive tax information to a court whose sole function is to implement a judgment debt. Therefore, the court could not ask for it and would not get it.

Jennifer Willott (Liberal Democrat, Cardiff Central)

The Minister may have misunderstood my intention. I was not trying to make a stroppy point. I was asking what sort of information would fall into that category.

Vera Baird (Labour, Redcar)

I did not think for a moment that the hon. Lady was being stroppy. However, I think that I have answered her question. There are tough criminal sanctions for anybody who misuses that kind of information, and I am sure that that is reassuring. Since the information will go not to the creditor but to the court, I think that all concerns about Big Brother can be set firmly aside. I have made it clear that “prescribed information” will be for the purposes that I have said—technical changes in how to approach a Department or to access the way it stores its information. I have also made it clear that there is a control over the use of any power, according to its purpose. Given that the court is interested only in accessing that information to enable the proper and due obtaining of a debt, it cannot seek any sensitive information, and such information would not and could not be disclosed. A judgment creditor will make a request to the Department for information. The court will process that request and then advise how to enforce the debt. The information will go no further than the court; it will not go back to the creditor.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am grateful to the Minister, butI have two ancillary questions. First, once the application has been made and the court has answered the question, how long does the court then hold on to the information and, physically, what happens to it? Is it destroyed? It is a question about the guarantee that the debtor has that there is not a lot of information about them around the place.

Secondly, does the debtor have the right at every stage to ask for any information held by the courts to be made available to them? I presume that they do. How do they do that? Are they alerted to the factthat the court has the information? Just as we are all entitled to pay our money and get a credit reference print-out—I think that we can all do that if we want to—does the same apply here? If someone wants access to the information held by a court, or which they believe to be held by a court, can they make an inquiry? Will the court give them an accurate answer? Will it tell them whether it holds such information, since when and until when? Will the court tell them what the information is, if it is asked? Does a debtor have to pay for such information. What is the process if the debtor wants to know what is going on?

Vera Baird (Labour, Redcar)

The hon. Gentleman has slipped back into pub quiz mode again. The information that we are talking about is the man’s name, address, date of birth and his national insurance number, and that is it. We do not want to know the name of his latest mistress or how much he owes the Inland Revenue or anything else at all. There is nothing in this that changes the general law about the information rights of an individual. The court will give them notice that an order has been sought and the court will give them the information that they ask for, but I cannot imagine anyone wasting their time asking whether it has their name or not. The debtor will already know that there has been a request. If they want to, they can block such a request, but it will be very hard to block if someone already has a judgment debt before them. What else can I tell the hon. Gentleman so that he feels that he has had answers to his questions? If the information is not to be used, it will be destroyed. If it is to be used, it will not be destroyed; it will be used. Is that satisfactory? Can I do more?

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I will ask one last question. Obviously, people know what their name and address is. I was more concerned about the more general information in the prescribed information category. Fine, I understand that if the information is not to be used, it will be destroyed, but I presume that the court keeps it for a period. Again, I am not trying to elicit information that is difficult to find, but there is a normal procedure whereby information is held by authorities for a certain time. If the police have information, they are entitled by law to hold it for a certain time—some information indefinitely and some for a certain period. Does the Minister know whether there is a one-year limit? Can she tell us or point me in the right direction? Her compendious knowledge, with the help of her civil servants, as to where all these bits of information are to be found is greater than the compendious knowledge even of all of us on the Opposition side of the Committee.

Vera Baird (Labour, Redcar)

Does the hon. Gentleman want my compendious knowledge or that of my civil servants? There is no change to data protection; there is no change for the Information Commissioner; there is no change to all the things that we have grown used to in the legislation. So that he has perhaps a better grasp of what “prescribed information” means, let me set out what the provision might also enable the court to request.

After careful consideration by the Government, and with the agreement of Revenue and Customs, it might be possible to use prescribed information as a category to request the details of the owners of a limited company if something were standing between, as it were, the creditor and the name and address of that person. It would not simply follow that it was the debtor’s name and address, because the name and address of the debtor could be that of Smith and Brown Ltd, and perhaps under prescribed information, in certain circumstances, people would want to go beyond that to get the actual people whose money they wanted to get at. That is, I think, the broadest category to which those who assist me have considered that the application of prescribed information might extend. We will set that out in regulations, of course, if it ever comes to pass, and there is a retention schedule, apparently, which is applicable to all information held by Her Majesty’s Courts Service.

Henry Bellingham (Conservative, North West Norfolk)

May I make a recommendation to the Minister? Further references to pub quizzes might be slightly risky, because I understand that in the unlikely event of there being a hung Parliament and a coalition between the Labour party and the LibDems, the hon. Member for North Southwark and Bermondsey might be the hon. and learned Lady’s boss in a future Administration. I therefore strongly suggest that they do their level best to ensure that relations from now on are as cordial as possible—I know that I am digressing a little bit.

John Bercow (Conservative, Buckingham)

Order. The relationship between those observations and amendment No. 146 is at best tenuous, and more likely non-existent.

Henry Bellingham (Conservative, North West Norfolk)

Thank you, Mr. Bercow. I take the light rap over the knuckles in the spirit in which it was delivered.

We were right to put on the record our concerns about the way in which future Governments might abuse information and the fact that Governmentshave a tendency to disseminate information across Departments. Checks have to be in place and there has to be a responsible attitude to the way in which that information is used in future, but I am grateful to the Minister for the way she has explained the provisions, and on that basis I beg to ask leave to withdraw the amendment.

Clause 92

Henry Bellingham (Conservative, North West Norfolk)

I beg to move amendment No. 151, in clause 92, page 59, line 22, at end insert—

‘(da) the driving licence number and vehicle registration of the debtor;’.

John Bercow (Conservative, Buckingham)

With this it will be convenient to discuss amendment No. 152, in clause 92, page 59,line 28, at end insert—

‘(ca) the driving licence number and vehicle registration of the debtor;’.

Henry Bellingham (Conservative, North West Norfolk)

We have referred briefly to these amendments. In fact, the hon. Member for Cardiff, Central alluded to them, although she was out of order in doing so, and we have discussed clause 92 stand part.

The amendments are very simple. If clauses 91 and 92 are to stand part of the Bill, and if clause 92(3) sets out the sort of harmless, straightforward information that could be made available, putting the driving licence number and vehicle registration of a debtor on that list would add to the information that is easy to access, and it would be perfectly acceptable for that information to be made available to the court incertain circumstances. My suggestion would assist the Government, and I hope that they examine it carefully.

Jennifer Willott (Liberal Democrat, Cardiff Central)

Will the Minister give us some information about the circumstances under which she believes it would be of benefit to the courts to have information about an individual’s driving licence number?

Vera Baird (Labour, Redcar)

It is not my amendment, and I have no reason to think why I might want something thatthe hon. Gentleman offers. However, we do not need the amendment because we can already access the information through an electronic link to the Driver and Vehicle Licensing Agency. I therefore invite him to withdraw the amendment.

Henry Bellingham (Conservative, North West Norfolk)

Will the Minister elaborate further? She says that there is an electronic link, but between what? Is it between the DVLA and the Courts Service, so that if courts want to get the information they can do so readily? Can they get it without the permission of the individual in question?

Vera Baird (Labour, Redcar)

Yes, that is correct. The county courts and the High Court have access to the information through an electronic link with the DVLA.

Henry Bellingham (Conservative, North West Norfolk)

I am most grateful to the Minister for that explanation. On that basis, she has satisfied me and explained that the amendments are unnecessary. We want to keep the Bill as tight and as focused as possible, so I beg to ask leave to withdraw the amendment.

New Clause 4

Henry Bellingham (Conservative, North West Norfolk)

I beg to move, That the clause be read a Second time.

The new clause is simple and straightforward, but significant because we want to define household income in relation to attachment of earnings orders to make it absolutely clear that the key relevant figure to be considered by the court is net household income.It is important to consider liabilities and define household income.

When an attachment of earnings order is made, there should be a clear definition of the earnings that are to be attached so that, if there are extra overheads or other liabilities, they can be taken into account. I imagine that a court would normally do that, and of course it will use common sense and judgment to consider the income, overheads and commitments of a family. They may have young children, an elderly, ill relative or other commitments, or mortgages might suddenly go up or the household runs into major problems over managing its income and making it go as far as possible.

We all come across such examples in our constituencies, not least as a consequence of actions—even rightful actions—by the Child Support Agency. People come to our constituency surgeries and talk about the problems that they face as a result of attachment of earnings orders, and they often argue convincingly that some of the liabilities and outgoings in their household are not catered for or taken care of. Most of the time, the courts will get that right. They will consider the overall picture and make a decision that is fair and balanced.

Obviously, courts have guidance on deciding on the attachment of earnings order, but what other guidance is there? Will there be any guidance in the regulations? Would it not make sense for a new clause specifically to lay down what can be considered? Is there not merit in having a clause to assess household income and make the rights of a debtor absolutely clear? Above all, it should be made clear that the debtor must make the information available, but at the same time the court must listen to what the debtor is saying so that we end up with a completely balanced, fair picture of the situation.

In the spirit of what I have said, I hope that the Minister will consider the new clause carefully, constructively and favourably.

Vera Baird (Labour, Redcar)

I am not entirely sure which clause the new clause is intended to support. It may relate to an assessment that is required at any time—

Henry Bellingham (Conservative, North West Norfolk)

Yes, indeed.

Vera Baird (Labour, Redcar)

It certainly does not seem to attach to one particular part of the Bill, although the hon. Gentleman has mostly talked about attachment of earnings orders, so that is perhaps what he is primarily concerned about.

Similar amendments were tabled in Grand Committee in the Lords by the hon. Gentleman’s noble Friend Lord Kingsland. We understood then that the amendments had come from a lobby group that was worried about the rise in creditors and thought that indebtedness should be assessed at household level rather than that of the debtor. If that is the hon. Gentleman’s purpose, we are deeply opposed to it. It should be the debtor and the debtor’s income only that are taken into account.

Let me make a slightly more technical point. The way in which deductions are calculated for all varieties of attachment of earnings order are in the Attachment of Earnings Act 1971. The new clause, standing free in the Bill, would not interface with that Act. Attachment of earnings orders are used by lots of Departments and many branches of the judicial system, and not only by those with which we are dealing. We run the risk of a fundamental change to the law having an effect on those areas outside this Department’s remit.

The proposal would replace the existing attachment of earnings order system with fixed tables. The court would not determine the debtor’s means exactly, as such, and it would be the debtor’s earnings from which the deductions were made by the employer. There are obvious practical reasons why that would be difficult to change, but there are legal principles, too. When an attachment of earnings order or any form of execution are concerned, we should consider the debtor’s income, because it is their debt. That seems central to us; it should not relate to other income in the household. I do not know whether the hon. Gentleman appreciated that that would follow, because what is being spoken of is household income.

The problem is that if I, as a mother, had a debt and my grown-up sons lived with me, they would have to submit to an assessment under the provision to see whether it would be appropriate for their income to be lent to me to get rid of my debt. What should be considered is what I am earning and at what rate I can pay off the debts. That is the mischief of the new clause, and I hope that I have made that clear. A new means form will be developed for the attachment of earnings procedures, which will cover lots of information. I imagine that it will cover all the information that anybody would wish it to. The court will carry out a thorough investigation before it makes any orders at all.

I hope that I have satisfied the hon. Gentleman that the proposal is mischievous rather than helpful, and that there are satisfactory provisions in place that will be superseded by a thorough means form. It will ensure that appropriate generosity is given to poor debtors and that appropriate, fair enforcement is provided for creditors.

Henry Bellingham (Conservative, North West Norfolk)

I am grateful to the Minister for her explanation. The new clause was not meant to be mischievous. I slightly resent the word “mischief” being brought into the discussion; far be it from me ever to try to create mischief. The new clause was designed to give the Minister the opportunity to explain more fully to the Committee exactly how household income will be assessed. On the basis of her explanation, I beg to ask leave to withdraw the motion.

New Clause 7

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I beg to move, That the clause be read a Second time.

I hope that the Minister will be sympathetic to the new clause. It was tabled specifically followingan approach by Vivien Gambling, the chair of the Housing Law Practitioners Association, a well-regarded organisation of which the Minister will know. I shall describe the new clause as the association does, as the proposition comes via us from the association.

The new clause is concerned with the manner in which orders for possession of land are enforced. The current law allows a lender or landlord to enforce an order for eviction in the county court by completing an administrative form in the court office. That might result in the enforcement of the order without notice to the occupier, and without lender or landlord having to give evidence of any breach. The risk of injustice to the occupier is obvious. In the High Court the party seeking a possession order has to apply for permission on notice for a warrant to issue.

The new clause would align the procedures across all civil courts, so the risk of injustice would not arise. A short supplementary note was prepared by Nowsheen Bhatti, the association’s parliamentary officer, which it will be helpful to put on the record as it completes the argument:

“The vast majority of possession orders are made against tenants of social landlords (councils and housing associations) and home-owners (mortgage borrowers). The bulk of those are orders ‘suspended’ or ‘postponed’ on terms which provide that the order shall not be enforceable so long as the occupier complies with certain conditions (e.g. to pay the mortgage instalments or the rent or to comply with other tenancy conditions). A lender or landlord wishing to enforce an unconditional order or a ‘suspended’ or ‘postponed’ order (e.g. in the belief that the terms have not been complied with) may obtain a bailiffs warrant for eviction in the County Court by the simple completion of an administrative form...In the High Court, the practice ...is currently reflected in the Rules of the Supreme Court RSC Ord 45 r3)...The need for such amendment was well demonstrated by the case of a council tenant who was evicted while going in and out of hospitals for treatment {Leicester CC v Aldwinkle [1992] 24HLR 49). In that case, the Court of Appeal said that the injustice would not have arisen had the practice of the County Court been the same as that of the High Court. This amendment is long overdue.”

From my constituency experience, I can say that that is a common state of affairs. It might be slightly different in other constituencies; I think that I still represent a larger proportion of council tenants than any of my colleagues in England. Such situations arise often with council property and, as the notes said, they arise with similar frequency with social housing, housing association and housing trust property. They also arise in the context of people who are paying off a mortgage. People regularly get into trouble. Cases regularly end up going to court and the court, in the first place, normally makes a suspended possession order and lays down the conditions. If we believe—as we do, and the law has obviously established the principle—that nobody can be deprived of their occupancy without a court making that decision, it seems absolutely vital in the interests of justice that, if someone is on notice that they might lose their possession and matters then develop, there should at least be an opportunity for a hearing before a judge who can weigh the balance of the argument.

The case cited—the Leicester city council case—was a case where somebody was in hospital. There may be many circumstances where entirely unforeseen and unpredictable events arise: somebody may have a heart attack or a stroke, suffer bereavement, have a terrible accident, become mentally ill, be coping with the severe illness or death of a relative, and so on. Therefore, it is not sufficient that a piece of paperwork turns the threat over someone’s head into the reality of people coming to throw them out. I hope that this measure is something that the Minister can be sympathetic to and I commend the new clause to the Minister and hon. Members in all parts of the Committee.

Vera Baird (Labour, Redcar)

The new clause is not related to any provision in the Bill; it is an attempt to compel the Civil Procedure Rules Committee to amend the rules about enforcement of possession orders. I heard what the hon. Member for North Southwark and Bermondsey said about justice, but this procedure has been found to be entirely compatible with the Human Rights Act 1998 by the Court of Appeal. Consequently, there is no clash with justice implicit in the procedure.

Additionally, we have a Civil Procedure Rules Committee to which the hon. Gentleman’s constituent can rightly direct submissions for changes to the civil procedure rules through the hon. Gentleman, by writing in any way and at any time that she wishes. Perhaps she has already done so. The Committee will take her comments into account. There is absolutely no doubt that it considers carefully all the procedural rules that are required and amends them as and where necessary.

Parliament has given the responsibility for changing the civil procedure rules to that Committee; thereis no justification, in this instance, for removing that responsibility. There is a parliamentary procedure for objecting to rule changes by the Committee, and the Government are content with that position.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

That is a less sympathetic response than I would have hoped for. The Minister is right and, of course, there is a Civil Rules Procedure Committee and a Courts Rules Committee. However, we are just about to deal with the rules of the county court. The Bill is amending the way in which our courts act. We have just dealt with a part headed “Enforcement of judgments and orders”. The new clause is entirely in line with those issues: it concerns enforcement of judgments. Elsewhere, the Bill deals with both the legislation and regulation of courts. The Minister and her colleagues have spatchcocked into the Bill a measure that we will come to later, related to works of art, which appears to be entirely unrelated to anything else in the Bill. It is certainly far less connected with these matters than the new clause.

The Government are used to accommodating something that is appropriately linked to a Bill. I ask the Minister to think again about the new clause. If I may say so, her reaction was an instinctive procedural reaction as to why another route is better. Here is a legislative opportunity to do something that we could do easily. I am not aware that there has been any great objection anywhere in the profession or, indeed, in the judiciary, to the measure. It seems to be an opportunity for a Labour Government to implement a bit of social justice. The Minister keeps telling us how committed she is to social justice. I hope that this is an opportunity for her to confirm her commitment to that ideal and to say that this measure is a way of ensuring that we have fewer people out on the streets as a result of some failure of the system than we would otherwise have. I hope that she might reconsider.

Vera Baird (Labour, Redcar)

The hon. Gentleman is barking up the wrong tree, I am afraid. This has absolutely nothing to do with social justice, but with us in Government not wanting to order the High Court judge who runs the civil procedure rules committee to get his act together and do a summersault just to please the hon. Gentleman. He can write to the High Court judge, using all his measureless rhetorical power, to try and persuade the judge to change the rule. That is the right procedure and the one that we will stick with.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am always willing to take suggestions. However, I am always willing to tryand persuade Governments to act. Sometimes one succeeds; sometimes one does not. I will reflect on whether or not to come back to this during the Bill, and the Minister might reflect on that too. I may see if I can get some support from the judiciary between now and Report. In the mean time, I beg to ask leave to withdraw the motion.

Clause 101

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 163, in clause 101, page 66, line 13, after ‘may’, insert

‘subject to the discretion of the court’.

John Bercow (Conservative, Buckingham)

With this it will be convenient to discuss the following amendments:

No. 164, in clause 101, page 66, line 15, after ‘may’, insert

‘subject to the discretion of the court’.

No. 167, in clause 101, page 66, leave out lines 30to 32.

No. 165, in clause 101, page 66, line 30, after ‘may’, insert

‘subject to the discretion of the court’.

No. 166, in clause 101, page 66, line 33, after ‘may’, insert

‘subject to the discretion of the court’.

Brooks Newmark (Conservative, Braintree)

Once again, we have quite a few points to go through, but I will try and be brief. If I have any questions for the Minister later, I will also try to brief, as I appreciate that time is pressing.

In seeking to move our amendments Nos. 163 to 167, we are looking at the repayment requirement that can be imposed on debtors who are placed under an administrative order by a county court. To be clear to the Minister, this is a probing amendment. We are trying to establish who is in control of determining the repayment requirement imposed on debtors. My concern with the clause is that there seems to be two sources of authority when it comes to determining the requirement. First is the implied discretion of the court making the order—I emphasise implied. Second is the regulations to be made in due course by the Lord Chancellor.

Amendments Nos. 163 to 166 seek to make the discretion of the court explicit, not implicit. Amendment No. 163 specifically gives the court discretion over whether the debtor must pay scheduled debts in full or to some other extent. AmendmentNo. 164 would ensure that the court has discretion over arrangements made in respect of several different creditors. That is vital because only the court is in the proper position to be aware of special circumstances that may affect the treatment of different creditors; meaningful guidance would be difficult to offer simply by regulation. Amendment No. 165 makes it clear that the court has discretion over ordinary payments other than by instalment, when there are appropriate circumstances. Amendment No. 166 tackles the rather ominous stipulation that the

“repayment requirement may include provision in addition to any that is required or permitted by this section.”

The amendment stipulates that any such inclusion is also at the court’s discretion and cannot spring, like a jack-in-the-box, from regulations that are yet to appear.

At the very least, the clause must distinguish more clearly between what the court may make a condition of an administrative order, at its discretion, and what it must do, as required by the regulations. Administration orders will be used by vulnerable people in difficult circumstances. I believe that the clause, as drafted, will sow the seeds for conflict between proper judicial discretion and administrative prescription. I should like the Minister’s assurance that no such conflict is anticipated. The amendment is thus just a probing amendment.

Amendment No. 167 is an attempt to clarify what the Government intend by the stipulation that repayments should be made by instalment. I am not sure that we share a common definition of an instalment. Proposed new section 112E(10) of the County Courts Act 1984 will provide for repayments

“to be made by other means”

including lump sums, in addition to instalments. That is not necessarily a sinister suggestion, and I can see the intention behind it. If a debtor has a meagre income stream but access to a lump sum, the lump sum should be available for use in settling the debt. However, it is not clear to me that subsection (10) is necessary for the achievement of that objective, and I believe that it would be better to omit it.

The repayment requirement is based on payment by instalments, but instalments are, to my mind, merely sums of money provided at agreed times in part settlement of a debt. It is perfectly conceivable for one large initial instalment to be followed by several smaller, regular instalments. Indeed, that is common practice in credit agreements that I have seen, whenthe first sum represents a deposit or when there is an agreed scope to vary instalments depending on an individual’s circumstances. Credit card debt is predicated entirely on the principle that payments are regular but that the amounts vary depending on the debtor’s available resources. They are still instalments in settlement of a debt. It would therefore be in the spirit of an instalment plan for the court to require one or more lump sums followed by smaller regular payments based on surplus income.

It seems to me rather complicated and potentially confusing to tell a debtor, “Here is your initial instalment plan, but the court may still ask you for additional lump sums on top of that.” I should welcome the Minister’s comments on whether an instalment plan, within the normal meaning of the phrase, is capable of achieving what the Government intend, without the inclusion of new subsection (10).

Vera Baird (Labour, Redcar)

I compliment the hon. Gentleman on his analysis. Our view is that there is no need to insert the phrase

“subject to the discretion of the court”

because the power is entirely permissive. The word “may” is sufficient to allow the court to exercise all its discretion in making the decision. I assure him, if that is his concern, that administration orders will be made on a case by case basis, and on no other, wholly with regard to individual circumstances.

Amendment No. 167 would indeed exclude the new section 112E(10), which would allow the court to decide, taking account of individual circumstances, whether it would be appropriate for the debtor to make a lump sum or other kind of payment in addition to normal instalments. Apart from the perhaps semantic point—I do not mean that as a criticism—about what is an instalment and what is a lump sum, I have not, I am afraid, fully understood what in the subsection is worrying the hon. Gentleman, so if I do not deal with the root of his worries I know that you, Mr. Bercow, will allow him to return to the matter.

The provision is there because in addition to a normal instalment order, a debtor might somehow get some more money—from a bonus or a windfall, for example, or by disposing of assets—and it may become appropriate for the court to make an additional order. Instalment is intended to mean a constant series of similar instalments, although they can be variable. That is all that the clause is about; there is nothing sinisterin it.

I hope that I have reassured the hon. Gentleman, but he can come back to me if he still has concerns that I have not dealt with.

Brooks Newmark (Conservative, Braintree)

I thank the Minister for dealing with my concerns. I especially appreciate her point about the importance of reflecting an individual’s circumstances, and I hope that the Government’s proposals will deal with that matter.

I think that the Minister has clarified for me the flexibility of what is being proposed: that there is an ability to vary instalments. I was concerned because the amount of an instalment and the pattern in which it is paid are usually of a fixed nature. Normal ways of repaying debts can vary. Lump sums can be paid upfront or at the back end, and the amounts themselves can vary at every stage during the instalment plan. If the Minister is giving me an assurance on the proposal I will not press the amendment to a Division, but I ask her to reaffirm that I have understood what she said.

Vera Baird (Labour, Redcar)

One would expect that instalments would be ordered to be regular, although I can understand what the hon. Gentleman is saying. If, after paying instalments of £10 a week for six months, the person concerned was in work again and the creditor wanted the instalment to be increased from that point, it would none the less still be an instalment. However, what is proposed is merely the ability, if some money falls into the hands of the debtor, for the court not to be tied to the instalment provision but to facilitate its being flexible, and notwithstanding the instalments, to be able to order a lump sum to be paid, or a lump sum instead of the rest of the instalments. The proposalis about flexibility, which, as the hon. Gentleman perceived, is important.

Brooks Newmark (Conservative, Braintree)

Once again, I thank the Minister for clarifying that point. I beg to ask leave to withdraw the amendment.

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 168, in clause 101, page 67, line 27, after ‘interest’, insert

‘above the Bank of England base rate’.

This is a probing amendment on a very sensitive issue, which aims to establish whether it is equitable for creditors to charge interest on debts scheduled under an administration order if the rate of interest is kept at the Bank of England’s rate. The principle in play in the clause, and throughout this part of the Bill, is the need to strike an adequate balance between the obligations of the debtors and the rights of creditors.

Although much of our recent discussion has been about protecting the obligations, and even the needs, of debtors, we must respect the fact that creditors have rights, and recognise the legitimate expectations of creditors who have acted responsibly, by allowing all creditors to charge some interest on debts that are scheduled to administration orders.

It is right that the debtor should be given shelter by the court from punitive rates of interest and charges when they get into difficulties. Hon. Members have heard some of the heart-stopping statistics on personal debt, especially in the aftermath of Farepak’s collapse, when home credit providers aggressively targeted those who had lost out.

It is easy to see the potential of the debt trap when reputable store cards can charge consumers interest rates of around 30 per cent. On a rate of just 25 per cent., it would take 12 years to pay off a £1,000 debt by making minimum payments and would eventually cost over twice the original sum borrowed. At the more aggressive end of the home credit market, which we looked at in the Treasury Committee, it is now impossible for a debtor to clear their debt once they get into difficulty. But allowing interest rates that do not exceed the bank’s base rate would be a compromise that also protected creditors’ rights. I hope that doing so would also be in line with a general principle that judgment debts do carry interest.

There are at least two perspectives on this issue. The first would be to say that creditors are lucky to receive any repayments at all and leave it at that, but the alternative is to admit that creditors should have the right to levy reasonable interest until the debt has been redeemed, even if the rate is substantially lower than the one previously agreed with the debtor. I should therefore be grateful if the Minister could tell us whether this issue was considered in her consultation and whether she might be prepared to revisit it now.

Vera Baird (Labour, Redcar)

The amendment would allow creditorsto receive some payment by way of interest, while governing the amount of interest so that it could not be punitive. The point is to stop interest being charged once an order comes into force. A debtor at that stage needs an end point and to start to be rehabilitated. That is our thinking and why we have made the provision in the new section 112H(2) under this clause, indicating that no more fees, charges or interest may be charged while the order is in place.

The idea is to get the maximum repayment available from the debtor so that the total debt or the largest possible proportion of it will be paid back within the maximum period of five years. The orders have an end point. There is no mechanism to extend the endpoint. It is intended to be a finite solution. If interest were added—this would present certain technical problems—there is a danger that the total debt could go beyond the maximum limits set in the regulations, which may be about £15,000. In that circumstance the court would have to revoke the order. That element of uncertainty is undesirable too.

The other point is that we consulted about adding interest at this stage and ascertained that the general view was that we were taking the right approach and that it was good to offer an end point and then work to rehabilitation and to leave interest out of the equation from then on. I hope that the hon. Gentleman can be persuaded to withdraw the amendment.

Brooks Newmark (Conservative, Braintree)

I am encouraged by some of the points that the Minister made. However, I have another scenario to put to her which might help to clarify my argument. The first scenario involves an individual who owed £5,000, of which he could afford to repay only £3,000. A deal would be struck that was effectively below par value of that debt—par being £5,000 and the discounted amount being £3,000. Clearly he would not have the wherewithal to pay any interest. The point that the Minister makes is absolutely right.

In a different scenario in which, let us say, the amount is again £5,000, but the individual’s earning capability is such that a negotiation is struck enabling him to pay back the full amount at par value but over a period, common sense tells me that there is an ability to pay some interest. Assuming that interest rates remain as they are—reasonably low—the amount that would accumulate at base bank rate on the par value of the debt would not reach the sort of amount that it would, for example, on a credit card.

I am trying to differentiate between a negotiation on a figure that is below par value—the £3,000 example in which the person does not have the wherewithal to repay the full amount—and the £5,000 par value example, in which the person clearly has the ability to pay everything back, but in which the Minister seems to be suggesting that he is unable to pay any interest at all to somebody who has lent him that money in good faith.

Vera Baird (Labour, Redcar)

I appreciate the difference between the two scenarios, but in this part of the Bill we are considering somebody who has got himself into debt and is helpless to get out of it on his own.

Henry Bellingham (Conservative, North West Norfolk)

On that point, I have just been looking at remedies other than bankruptcy. It strikes me is that we are considering not just people who have got into debt through gross irresponsibility or who have built up a huge amount of debt on credit cards, but a small minority of sophisticated business people who have got themselves into debt and who do not want to go bankrupt. They are looking for remedies other than bankruptcy to sort out their debts, andthey might have received credit from other private individuals. Should there not be a way of distinguishing between banks and finance companies that offercredit, and individuals who provide it for other individuals? In the latter case, there might be an argument for them to receive some interest on the credit that they have made available.

Vera Baird (Labour, Redcar)

I can see the scenario to which the hon. Gentleman refers. However, here we are trying to deal with people whose debts have overwhelmed them, whatever category he wants to put them in. They are taking a fairly significant step for the present and the future in entering, through the courts, into an order of the kind that we are considering. All the way up to that point interest will have run on the loan, on the judgment debt and so on. Only when that is clear will that person be able to engage the court to save him from his predicament, and then the interest will stop running. By then, it will be a finite problem; the point will be to get rid of the debt. It seems to us that, given that he will be a long way down the road at that point, it will be appropriate to stop the interest running on—the creditor will have received it all the way until then—and to concentrate on rehabilitating the debtor and getting the debt paid off as quickly as possible. I invite the hon. Gentleman to agree that that is a very reasonable way in which to see the matter.

Brooks Newmark (Conservative, Braintree)

I thank the Minister for addressing my concerns about the rights of creditors and answering the question put by my hon. Friend the Member for North-West Norfolk on a sensitive issue. I hear what she says and I beg to ask leave to withdraw the amendment.

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 169, in clause 101, page 70, line 13, leave out ‘2006’ and insert ‘2007’.

I am not sure whether I am being pedantic or whether there is a clerical error here. I believe that the date should be 2007 and not 2006. If the Minister could correct me on that, I would appreciate it.

Vera Baird (Labour, Redcar)

I think that the Government could rightly be accused of optimism on this point. I understand that what happens is that it will be updated anyway when the Act is printed, but I am grateful for the prompt.

John Bercow (Conservative, Buckingham)

I am not sure that procedurally the Minister is correct, but in any event, my understanding is that if the hon. Gentleman wishes to press the amendment, it can be pressed, and I must put it to the Committee for its verdict.

Brooks Newmark (Conservative, Braintree)

I wish to press the amendment.

Vera Baird (Labour, Redcar)

I am overwhelmed with delight to be able to accept it. There are those behind me who wanted to vote, but I will control them.

John Bercow (Conservative, Buckingham)

As the Minister has accepted the amendment, no vote is required, but I still need to put the question.

Brooks Newmark (Conservative, Braintree)

On that minor victory, I should almost like to retire, but I shall press on.

I beg to move amendment No. 170, in clause 101, page 76, leave out lines 4 to 17.

The amendment concerns the calculation of a debtor’s qualifying debts for the purposes of seeking them through an administration order. I am concerned that this seems a rather abstruse business. Regulations will be prescribed as to the maximum sum that a debtor can earn and still be subject to administration order. I accept the need for a figure to be set, but I hope that the Minister will help with why the calculation of qualifying debts is envisaged to be so complex that it cannot be left to a county court.

Qualifying debts are all debts that have arisen before the date of the calculation, and it is already abundantly clear that the debtor cannot pay off any business debts. Can the Minister explain the complexities that necessitate further regulations on this subject? Can she also explain why the new section 112AD(3) is worded as it is:

“Regulations must make further provision about how the total amount of a debtor’s qualifying debt is to be calculated.”?

That is very strong. It suggests that the Government have already given this some significant thought, and if so, can we see the draft regulations, if the Minister actually has issued them?

Henry Bellingham (Conservative, North West Norfolk)

I endorse what my hon. Friend has just said. One of the things that told me a little in looking at proposed new section 112 AD, headed “Calculating the debtor’s qualifying debts”, is, as he pointed out, subsections (3) and (4), where the text talks about the regulations making further regulation and about how the total amount of qualifying debts has been calculated. Under subsection (4), regulations “may” make provision. I should like the Minister to explain why they “must” in subsection (3), but not in subsection (4). Why is there a difference? Why is one subsection more powerful and stronger than the other? As my hon. Friend mentioned with regard to the regulations, the Government—with respect—have had a long time to get the Bill right. It has been a long time coming and we have had a series of publications, with a Green Paper and a White Paper, and a huge amount of consultation with all the different sectors.

As far as I am aware, the only part of the Bill that came as a bit of a surprise—the hon. Member for North Southwark and Bermondsey alluded to this—is part 6, which relates to works of art. The Government have had a huge amount of time to get the structure and detail absolutely spot on in relation to debt management and relief, and things such as administration orders. I will press the Minister further: we hear of future regulations, but surely we ought to know now exactly what the position is now.

Vera Baird (Labour, Redcar)

The amendment would remove the means of calculating a debt as qualifying debt, which is a vital component of the new scheme: we need to know what the debtor owes. It would also stop the court taking account of debts arising before the order was made but not yet due for repayment—for example, debts under a deferred credit scheme. We oppose the amendment because it would not allow provision to be made for the court to add up his indebtedness, so the court would not be able to make a decision on whether an administration order is the best method of assistance available to him.

Allowing that assessment to be made of the debtor’s true indebtedness could result in his being directed to a better way forward than the administration scheme, so it is imperative to allow the court to advise and direct the debtor in any way that is most advantageous to him.

“Must” and “may” in subsections (3) and (4) are there for the following reasons: subsection (3) is about the total amount of the debtor’s qualifying debt, so it is imperative that the system of administration orders functions, and that it is clear and certain what a qualifying debt is. It must be clear what his total is. It is imperative that there are regulations set out that point to a fixed sum when his personal circumstances are considered.

My guess is that it is less important to work outhow the amount of a particular qualifying debt is calculated. Flexibility about that can adequately be reflected in rules that we are likely—though not obliged—to make. If we do not make it compulsory to have regulations on how the total qualifying debt is calculated, people will not be able to ascertain with certainty what it is. It is important that that regulatory power is there and that we can direct it to happen. We will consult on all this, as we have on everything else.

In paragraphs 275 and 276 of the policy statement, with which Opposition Members are quite familiar, we have set out the Government’s current thinking on this. We do not have regulations ready yet, because we want to consult, and I cannot say exactly when they willbe ready, but hon. Gentlemen can see that the document—I do not know whether they have it—says:

“To ensure that the reformed scheme meets its objectives, the court will take into account all the debtor’s existing qualifying debts for the purposes of meeting the prescribed maximum, regardless of whether or not a debt is due at the time of the calculation. This enables the court to consider the impact of deferred debts that will become due during the lifetime of the order and avoid the need to revoke an order where such a debt will cause the total debt to exceed the prescribed maximum”.

It then reiterates that the Lord Chancellor is

“to make provision about how the total amount of the debtor’s qualifying debts are to be calculated to ensure that a standard approach is taken”.

That is the point that I have tried to set out.

Tobias Ellwood (Conservative, Bournemouth East)

My hon. Friend the Member for North-West Norfolk mentioned the amount of consultation that has preceded our debate. I believe, if I recall correctly, that when we discussed the first part of the Bill, on tribunals, the Minister mentioned that there would be a consultation period in the autumn. Will that focus purely on that part of the Bill or will it cover the aspects that we are discussing now?

Vera Baird (Labour, Redcar)

There will be a whole raft of overlapping consultation processes, but there would not be any significant point in linking this one with the oneabout tribunals. We obviously want the regulations to come into force as early as possible, because the administration order provision is not of much use unless we know exactly how the qualifying debt will be calculated. The political will to get the regulations ready is definitely there, but we want to ensure that we have all the appropriate consultations. As the hon. Gentleman correctly recalled, it is intended that the consultation on tribunals will take place in the autumn, and this one will start in the summer, as we want to get it under way quickly.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I have one comment—not on the regulations timetable but on the amounts criteria. As the Minister and other hon. Members know well, the simpler and the more aligned are the amounts that qualify or disqualify people for something—in the present case, the debts are taken into account—the easier it is for advisers, including people in citizens advice bureaux.

Will any parallel scales, tables or precedents beused? Amounts are easier to comprehend if they are expressed in round figures and multiples of 5,000, if they remain the same for a while and if any change is well publicised and regular. This part of the Bill is good, and I want it to work in the most user-friendly way and with least complication for the people whouse it.

Vera Baird (Labour, Redcar)

I do not know whether tables can be replicated for use in relation to the present provisions. Obviously, there is a wealth of experience among precisely such bodies as the citizens advice bureaux, and we shall want to tap into that when we assemble the new system for helping people out of debt.

On the timetable, I hope that I have made it clear that the tribunal consultation will be in the autumn. We shall consult on the regulations that are the subject of our current discussion in the summer.

Tobias Ellwood (Conservative, Bournemouth East)

I am sorry to press the Minister, but there remains concern among all Conservative Members. There has been significant consultation in the lead-up to the Bill. However, we identify with the spirit of opinion that has been expressed on how the various aspects of the Bill—on tribunals, courts and enforcement—should be implemented when it becomes an Act. If there is a consultation period after enactment, it could significantly change the direction of the new legislation from that for which support has been expressed in our debate. There has been enough consultation; more of it would put the cart before the horse. When the Bill leaves Parliament, there should be enough direction that yet further consultation is not required.

Vera Baird (Labour, Redcar)

There cannot be a change of direction. There is enormously long legal history whereby regulations can fit only within the framework of an Act and must not be ultra vires, so the regulations could not take us in a different direction. With respect to the hon. Gentleman, we need to keep our feet on the ground. We are talking about how to calculate people’s debt. The legislation contains a scheme whereby debtors can be helped out of their debt position, and it is important to scrutinise that scheme properly now. The consultation on how debts will calculated will come within the ambit of that scheme and not outside. There will soon be consultation and discussion in the House.

Brooks Newmark (Conservative, Braintree)

I appreciate the Minister’s explanation and accept particularly her points about the timetable and ensuring that debtors can take the most advantageous route. In the absence of providing the further information that Opposition Members have requested, I hope that the Minister will give us all time to reflect, at a later stage, on the points that we have tried to make with the amendment, which I shall not press to a vote.

Vera Baird (Labour, Redcar)

I am not aware of any requested information that I have not supplied. If the hon. Gentleman sets out what he wants to know, we will do our best to comply.

Brooks Newmark (Conservative, Braintree)

My hon. Friend the Member for Bournemouth, East was seeking some information; I am sure that he will clarify the matter.

Mr. Ellwood rose—

John Bercow (Conservative, Buckingham)

Order. We need to know on whom a Member is intervening.

Tobias Ellwood (Conservative, Bournemouth East)

I think that we are still intervening on the Minister, are we not?

John Bercow (Conservative, Buckingham)

No; Mr. Brooks Newmark has the floor. If the hon. Gentleman wishes to intervene at this stage, he might do so on his hon. Friend. If he waits until his hon. Friend has resumed his seat and the Minister chooses to rise, he might then have an opportunity to intervene on her.

Brooks Newmark (Conservative, Braintree)

Thank you, Mr. Bercow. I shall take my seat again, so that my hon. Friend can clarify the position.

Tobias Ellwood (Conservative, Bournemouth East)

Will the Minister give us a full description, on Report, of what the consultation will involve? Who will participate in it; how long will it be; and what will be its broad nature? I do not challenge the need to provide an approach that is not exactly broad-brush—it is detailed—but that requires some engagement with the various organisations that will use the legislation. The Minister has twice said that there will be summer and autumn consultation periods. Who will be invited to participate in those consultations and what will be their scope? I appreciate that she might not be able to provide that information now, but it would be useful on Report.

Vera Baird (Labour, Redcar)

I am happy to comply with the hon. Gentleman’s request. I did not appreciate exactlywhat he wanted to know, or I would have answered straight away. Normal Cabinet Office provision for consultations will apply. There will be three months’ consultation, and it will be made public that a consultation will take place. I do not doubt that individual organisations known by the Governmentto have an interest in the matter will be directly approached for input, but the general publicity surrounding the consultation will be directed to all relevant areas in the hope that interested parties will come forward as well. The consultation will be as comprehensive as possible, because it is important to get things right. The way to do that is to consult the maximum number of people with the maximum amount of experience, to reflect on their responses and to produce an answer to the House.

John Bercow (Conservative, Buckingham)

I think that, before the Minister intervened on the hon. Member for Braintree, he was signalling that he wished to withdraw his amendment.

Brooks Newmark (Conservative, Braintree)

Yes; thank you, Mr. Bercow. I beg to ask leave to withdraw the amendment.

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 171, in clause 101, page 76, leave out lines 26 to 28.

The amendment goes further in attempting to resolve the possible conflict between the court’s discretion and the regulations by omitting the need for regulations altogether. That is desirable for a single reason: I do not want any district judge to have to tell a debtor that, although he would like to schedule the debts in a way that is fair, just and reasonable, the regulations prevent him from doing so.

If the court has discretion over the amount of debt to be repaid and which creditors take priority under the order, it seems unnecessary to fetter its discretion over the amounts of the repayments. However, if it is the Government’s view that the court needs guidance on the calculation of surplus income and the nature of the instalments, would it not be reasonable also to offer it guidance on the total sum to be repaid? It seems that the court is being trusted with some decisions, but not others. I therefore seek the Minister’s clarification on why that should be so and what reasoning has been evoked to justify the differing treatments?

Vera Baird (Labour, Redcar)

This amendment would remove the power to make regulations that will allow the Government to prescribe a consistent approach, across all courts, to the calculation of the amount of instalments in relation to a debtor’s surplus income. Consistency is a key feature of the scheme, which received support from all sides. It is better to have a framework within which the courts can apply their discretion to an individual set of circumstances, to avoid an incompatibility between what happensto someone in court jurisdiction A and what happens to someone in a similar position in court jurisdiction B.

I am told that creditors are keen to see an end to the current system in which different courts make vastly different orders on individual circumstances that are largely the same. The advice sector also favours a national system that will ensure a consistent approach to these issues, and one imagines that it will feel competent and more empowered to advise with a good deal of certainty.

Therefore, regulations made under proposed new section 112E(9) of the County Courts Act 1984 will ensure a consistent approach based on the ability to pay, probably using a version of the common financial statement, which is widely accepted across both the credit and the advice sectors as the most comprehensive and best tool for doing that kind of assessment. That type of scheme is not appropriate for those with insufficient surplus income to meet the commitment. The revised scheme is targeted at those debtors who can afford to make reasonable repayments up to the five-year term of the order.

Brooks Newmark (Conservative, Braintree)

Unfortunately, I am a bit of pedant on language. The Minister used the word “probably” in relation to the use of the common financial statement. Is there any ambiguity that I should be concerned about? Is there something else that she is thinking about or will the system be based on a common financial statement?

Vera Baird (Labour, Redcar)

No, the system is part of the regulation-making process that I have already described to the hon. Member for Bournemouth, East. The common financial statement commends itself to us as the appropriate tool, and it is widely used by advice agencies. However, if somebody has come up with a better tool by June—if that is when summer starts—we would be open to the suggestion of using it instead. That is the direction of our thinking at the moment. It is our preferred tool, but there will not be much deviation from a tool that is similar to the common financial statement. Nevertheless, we will leave the options open until the consultation has been held.

If we accepted the amendment, it would prevent the introduction of a common procedure for determining instalments. Each court would carry on making its own assessments based on locally devised criteria, which would add complexity, cost and—overwhelmingly what we do not want—uncertainty. We therefore urge that the amendment be withdrawn.

Brooks Newmark (Conservative, Braintree)

Again, I am encouraged by what the Minister has said. I understand the need for debtors to pool their obligations on the basis of a common financial statement. She mentioned other tools that are available, but I cannot think of any alternative other than a common financial statement. However, if she wants to leave flexibility for that open, I probably would not object to it—although I cannot imagine what it would be. I beg to ask leave to withdraw the amendment.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I should like to ask a general question about the clause and this welcome part of the Bill. This is the first clause stand part debate under this part, which tries to find systems whereby people with small or medium debts can have them managed in a way that resolves the problems. There was a helpful introduction in the explanatory notes, supplied bythe Government to all Committee members and available through the Vote Office, explaining the background and the alternatives: administration orders, enforcement registration orders, debt relief orders and debt management schemes.

I have two generic questions about both orders in the clause and their context. First, on a practical matter, if somebody gets into personal debt, what is the sequence or process that will determine the alternative route out of it? Options are available. In the explanatory notes, the administration orders are described as a

“scheme for those with multiple debts totalling no more than £5,000, one of which must be a judgment debt.”

There is, as we will see in a little while, a set of arrangements under what are now called debt management schemes. The idea is to prevent people from going into bankruptcy and to try to reach an arrangement that, in many cases, comes to an end in a year, so that, in that time, matters can be resolved by agreement and the creditors will accept that they will not necessarily get all the money to which they are entitled. However, in return, they will get some of the money and the debtor will honour the agreement and pay that off.

The arrangement also seeks to resolve a real life problem, which is that some people get themselves into a financial muddle and do not have the financial wherewithal to sustain the obligations. As we probably all know from our personal circumstances, it is much easier to manage one repayment arrangement than many. The people who get into the biggest difficulty in life are often those who try to juggle repayments here and there.

If people are being chased, quite properly, by creditors for money that they are obliged to pay, from whom and where can they seek advice in the court structure? The matter relates to the context of the court structure, which will set out the sequence, or the best choice, for people to follow. Again, that reflects our debate a moment ago; it is about ensuring that we clog up the courts as little as possible, get as much agreement as possible and that creditors who are owed money get it, whenever possible. Above all, however, it is about debtors getting into as little further difficulty as possible, with all the knock-on effects and consequences.

I bridge that point, on my way to my second question, by reminding Committee colleagues about figures that we all know. There is now record personal indebtedness in this country. I have heard in the past few days that that may just have levelled off. The figure in my head is some £13 trillion, which is an incredible, almost unimaginable figure. However, people are willing to consider debt, because of the amount of mortgage that they can take out—five times their income—and because of the number of consumer goods that they are buying. This country is saddled with debt, which is fundamentally problematical for Britain and not a sign of healthy long-term economic stability.

Secondly, in case we agree to this part of the Bill, particularly the part on debt management schemes, has the Department conducted an assessment of what that will mean in debt reduction? How many people will be affected? In the Library research notes and the notes on clauses, I have been able to find only the following figures. Paragraph 384, under “Debt Management Schemes” in the departmental explanatory notes, says:

“It is estimated that over 25,000 such debt repayment plans were arranged in 2004 and there are currently around 70,000 active plans.”

I have not found an assessment of the likely impact on indebtedness and the number of people in debt. How many people are expected to be taken out of indebtedness and out of the courts? It is an important generic issue as well as a social policy issue.

The measures seem to be a good idea. They are a welcome part of the Bill, and everybody has been positive about them, but does research suggest that they will make a significant or only a small impact? I should be happy to receive any information that the Minister can give me or point me toward. It would put the measures in the wider context of helping people get out of the pressured position of being in debt, which causes people in our constituencies illness, grief, family breakdown and worse. I hope that the measures will take some small steps to alleviate that.

Vera Baird (Labour, Redcar)

I do not accept the description of a nation saddled with debt. Debt is important. It is difficult to live life without substantial debt. I would have to live in a tent if I did not have a debt called a mortgage. The Government are worried about, and have taken the new steps to address, debt that is out of control. Debt is a useful tool when properly controlled.

We have altered, extended and changed an existing system of coming to terms with debt. It is a system of mutual undertakings whereby the debtor agrees that he or she will pay off a certain amount and, as the hon. Member for North Southwark and Bermondsey said, is relieved of the management of many repayments. Creditors acquiesce in having their ability to take further action restricted so long as the payments are made.

That is of course a court-controlled procedure. It will need to go to the courts, so the options that we have been discussing—mediation, alternative dispute resolution and so on—will have passed by the time we get to such a position. There is no doubt that advice is available. I chronicled its availability a few days ago. Agencies such as citizens advice bureaux, law centres, solicitors, the Department of Trade and Industry, financial advisers and advisers financed by the financial inclusion fund are available, as is outreach to contact people whose debts are causing them significant stress and difficulty. One would expect that kind of advice to encourage an individual to come to court to ask for such assistance. It is not inconceivable that, on some occasions, the creditor might suggest it, and the individual might take advice and see the wisdom of it.

In so far as I can help the hon. Gentleman, those are likely to be the mechanics of how the helpful provisions will come into play in a troubled individual’s life. I cannot give him any significant figures on how many such schemes we expect to emerge. There is only anecdotal material at present, and study is ongoing, but he is right that there are about 25,000 administration orders a year. That must give some guideline about what is likely to follow from the various versions of debt management. I cannot say more than there are 25,000 orders a year now, and that that number may exist in future. I am reflecting on whether I have answered all that he asked—I think that I have.

Clause 104

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 173, in clause 104, page 89, line 31, after ‘persons’, insert

‘approved by the relevant supervisory authority’.

The introduction of approved debt management schemes is welcome, but only in so far as the supervisory and approval regime is sufficiently rigorous. Subsection (5) establishes that the scheme must be operated

“by a body of persons”.

I presume that the intention is to prevent individuals from offering schemes. Our amendment goes further and would require the supervisory authority to approve not only the scheme, but the body offering it. That matters because the schemes will in time be marketed as approved. They will receive the seal of approval from the Government and presumably use their new status to drum up business. There will be no surprise if existing individual voluntary arrangement providers offered their own debt management schemes for that very reason.

Encouraging providers to seek approval for their schemes may well be a pragmatic alternative to regulating the entire IVA sector, although there are legitimate concerns that the Government have missed an opportunity by not choosing to regulate. Whatever the intentions behind the clause, the purpose of the amendment is to ensure that debt management schemes cannot be operated by individuals who are entirely unvetted by the supervisory authority. That would create a risk of unscrupulous providers operating one approved scheme, which they can market as such, among many others and thus leave the public to draw the inference that all their services have been given a Government kitemark. It is ultimately a matter of perception.

During the course of its investigation, prior to the approval of a scheme, the supervisory authority might look closely at the body offering it. In that case, nothing would be lost by the Bill stating explicitly that the provider, as well as the scheme itself, is approved. I therefore seek the Minister’s assurance on that point.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

We support the amendment. I can understand that, in a free market economy, it could be left to anyone to run such a scheme, but there is benefit in having official trade-marked, branded kitemark schemes. Given our long debates about regulation bailiffs and the Security Industry Authority in respect of bouncers and security outside pubs and clubs, it would be sensible to think of such matters now and not wake up only after the Bill is enacted. I hope that the Minister will be sympathetic to my argument.

Vera Baird (Labour, Redcar)

Amendment No. 173 would require those who operate debt management schemes to be

“approved by the relevant supervisory authority’.

The Bill contains what is in a sense a double-decker scheme. A scheme that wants to benefit from the powers set out in clauses 109 to 116 will have to be approved by the supervisory authority dealt with in clause 106. However, seeking such approval is optional; scheme operators will have to decide whether they want to offer an enhanced scheme. When schemes do not have the approval of the supervisory authority, they will still be able to offer debt management schemes, but they will not have the powers available to those who do have such approval. The schemes that do not have the new powers will operate as they do now and will be totally dependent on the voluntary participation of the creditor.

I hope that the hon. Gentleman accepts that there is a scheme for approval and that those who choose not to seek approval will have only a limited range of powers available to them, although they will be able to offer a service based on the voluntary acceptanceof debtors. No doubt such acceptances will be forthcoming. I hope that that flexibility is sufficient for the hon. Member for Braintree, because it commends itself to the Government.

Brooks Newmark (Conservative, Braintree)

Again, the Minister has not really persuaded me. My concern is that if there is some sense or perception on the part a scheme that it has, even in law, the approval or Government backing for what it is doing, it may be out there marketing itself as a professional operation that has the stamp approval of a regulated body. That might open the system to some level of abuse. I appreciate that such abuses might happen only at the margin, but the whole point of having a regulatory body and of regulatory approval is to protect the innocent and the vulnerable from those that might prey on them. Will the Minister once again clarify, perhaps more formally than she has, what the schemes are and under what restrictions they will operate?

Vera Baird (Labour, Redcar)

The operators of approved schemes have to be companies or partnerships, not individuals. It is likely that the CAB might itself go into such territory. The hon. Gentleman will know about the Consumer Credit Counselling Service, which deals with debt management concerning credit cards and personal loans, and Payplan.

Regulations will control and limit advertising,which might provide further reassurance to the hon. Gentleman, who suggested that people might misrepresent the supervision under which they operate when offering a scheme. For a company to misrepresent itself by saying that it has the authority of a court to offer a scheme when it does not, or by saying that it has powers that it does not have, would certainly be an abuse of the scheme and would likely be a criminal offence, probably under the terms of the theft Acts. I hope that that reassures him on the issue of false advertising. There is scope in the Bill to limit or control advertising.

I hope that I have reassured the hon. Gentleman, albeit not exactly how he envisaged—a depth of worry about the matter is unnecessary. Some schemes will probably be run by wholly virtuous bodies such as the CAB, which do not have powers. The input of the supervisory authority will be necessary before such bodies can have more powers.

Brooks Newmark (Conservative, Braintree)

The Minister’s words may be reassuring, and I take on good faith what she says, but I am still not overly convinced that there will not be some abuse out in the big wide world. However, I beg to ask leave to withdraw the amendment.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

Subsection (2) states:

“The scheme must be open to some or all non-business debtors.”

My understanding is that a scheme could be set upthat dealt with all groups of people. I do not see from the notes on clauses what sort of groups have been thought particularly relevant. I understand that the arrangement is a permissive one, so anyone could come up with a proposition, which would then be approved under the system, but will the Minister suggest possible sub-groups of non-business debtors? Might it be the category of women’s debt or debts of certain ethnic or other communities? I am trying to get behind the words to see what the thinking is, because it is not clear from the Bill.

Vera Baird (Labour, Redcar)

I do not think that it has been thought through any further than it says—that schemes must be open to some or all non-business debtors. I have not contemplated that people would set themselves up particularly for black or minority ethnic debtors or women debtors, but I suppose that that is not impossible. Perhaps membership organisations might want to offer that kind of service to some of their members rather than to others. I think that the opportunity that is offered by the provision—although opportunity is rather too positive a word for what we are talking about, which is debt management—means that there will be organisations that are happy tostep into the breach and take on non-business debtors of various kinds. There is maximum flexibility in chapter 4, and particularly in clause 104, to allow for all that. I suppose that the kind of organisations that the hon. Gentleman has mentioned might become involved; there might be some who wanted to focus on women, disabled people or mentally ill people, and so on. I do not know, but the scope is there if they wanted to do that.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

That is helpful. In relation to what is an embryonic concept, I hope that when those who avail themselves of the opportunity, as the Minister put it, refer to the debates, they will reflect on the probable wisdom of setting up schemes to be offered to all debtors rather than to some groups. It becomes invidious, often, if people knock on a door and are told, “I am sorry, but you do not qualify for the service if you are not in the relevant community.” We should try to encourage arrangements that are as inclusive as possible, not as exclusive as possible.

Clause 106

Brooks Newmark (Conservative, Braintree)

I beg to move amendment No. 174, in clause 106, page 90, line 11, leave out ‘may’ and insert ‘shall’.

John Bercow (Conservative, Buckingham)

With this it will be convenient to discuss the following amendments:

No. 175, in clause 106, page 90, line 21, leave out ‘may’ and insert ‘shall’.

No. 177, in clause 110, page 91, line 30, leave out ‘may’ and insert ‘shall’.

No. 176, in clause 115, page 93, line 24, leave out ‘may’ and insert ‘shall’.

Brooks Newmark (Conservative, Braintree)

Amendments Nos. 174 to 177, which on the face of it would replace the word “may” with “shall”, are probing amendments to establish how rigorous the approval of the supervisory authority will be, in effect. I am concerned that the word “may” appears many times in this chapter of part 5. The amendments in this group do not include all of them and an awful lot is to be left to regulations.

Approved debt management schemes and the registration of plans are positive in principle, but the detail of the approval mechanism and the rigour to be exercised by the scrutinising authority are a bit vague. That is compounded by the fact that the proposed supervising authority is the Lord Chancellor or his delegates rather than the Office of Fair Trading or the Financial Services Authority. The authority may approve schemes, but it does not have to do so. Regulations, on the other hand,

“may make provision about...conditions that must be met”

before approval. There is a conflict there: may they or must they?

That theme applies also to the registration of plans under clause 115, which states that regulations “may make provision” about either or both of the situations listed. If the need for regulation is anticipated, it should be declared openly. That is the purpose underlying the amendment—to replace some of the “mays” with “shalls”. I apologise to the Committee that I have not managed to identify them all, but I hope that I have managed to make my intentions clear to the Minister. Will she clarify what will and will not be done by the supervising authority, and what will or will not be prescribed in the forthcoming regulations?

Vera Baird (Labour, Redcar)

I am not sure whether it is entirely clear what the hon. Gentleman wants.

Henry Bellingham (Conservative, North West Norfolk)

He wants some “shalls”.

Vera Baird (Labour, Redcar)

He wants some “shalls”, I know that. He wants a lot of “shalls.” I wonder what the collective noun for “shalls” is—a shower of shalls? However by substituting “may” with “shall” in clause 106(1), for instance, which is what amendment No. 174 woulddo, we would end up with the requirement that the supervising authority shall approve one or more debt management schemes, irrespective of whether they are utterly hopeless and inappropriate. That would require the authority to approve one or more schemes but, in truth, it would probably require it to approve all debt management schemes put before it. I am sure that that is not what the hon. Member for Braintree wants.

Under our proposals, seeking approval to operate a scheme with the proposed enhanced powers would be optional. The hon. Gentleman knows that. There is no intention to force operators to offer enhanced schemes; they will have to decide whether they want to do so. There is no certainty about the number of applications for approval that will be received or how many will be judged suitable and how many not. The intention is that the supervising authority will have the power to set conditions that must be met by all scheme operators, so a bedrock of conditions will be laid down. Those conditions will have to be satisfied before a scheme is approved.

Naturally, we intend to consult on the terms of the proposals, including the role of the supervising authority. There is no doubt that there will be a grounding of rules, and all scheme operators will be required to meet them. I expect the rules to be rigorous. Our intention is that schemes will be proper, helpful, well thought through and well worked out, and that they will work for the people who are taken on by them.

I believe that the hon. Gentleman moved on to amendment No. 177.

Brooks Newmark (Conservative, Braintree)

Did I do that by accident?

Vera Baird (Labour, Redcar)

No, I thought that the amendments had been regrouped so that the hon. Gentleman could talk to amendment No. 177, but I am not sure whether he did. He might want to say more about it. I have done my best to address amendments Nos. 174 and 175.

Brooks Newmark (Conservative, Braintree)

I appreciate the Minister’s response. At this stage I beg to ask leave to withdraw the amendment.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

On a point of order, Mr Bercow. It might help the Committee if I indicate that my hon. Friend the Member for Cardiff, Central and I will be very happy if you wish to group some of the clauses that follow, except that we would like to say a word on clauses 113 and 124.

John Bercow (Conservative, Buckingham)

I am very grateful to the hon. Gentleman; that is helpful. At this stage, I intend to proceed by taking the next four or five clauses individually.

Clause 113

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

The clause concerns an issue that we come across fairly often: people who have their gas or electricity supply turned off. The water service is a linked utility. Those used to be public utilities, but they are now private. The clause is about the process that would in certain circumstances control when supplies could be turned off, and it applies to non-business debtors during periods of protection.

My question is simple. It is partly a DCA-type question and partly a DTI-type one. Just as we now say that people cannot be evicted from their homes without the sanction of a court, we could equally reasonably argue that the electricity, gas or water supply to a domestic property should not be turned off without such sanction. Can the Minister assist me by saying whether she and her colleagues have thought about that argument in the context of this measure? Would they consider introducing such an approach by tabling an amendment on Report, and would such a move beled by another Department or in consultation with other Departments? It seems to me that we have an opportunity to try to do something that would prevent a lot of desperate, and sometimes unsatisfactory, scrambling around.

Let me make two last points. First, I am aware that codes of practice apply in such circumstances, but sometimes they do not work, and I am also aware that there is good practice, which does work. In addition, of course we know that people abuse the system. Secondly, I have often found that such issues can be dealt with by agreeing with the provider a register of people in a community who are vulnerable. For example, when people become of pensionable age,they could register so that special procedures were undertaken. After many years, however, I have not so far found a foolproof system of protecting the vulnerable from having their water, electricity or gas cut off in certain circumstances. The situation is even harder now with the multiplicity of providers in this privatised world of utilities.

I would be grateful to hear from the Minister whether that broader issue has been considered and whether favourable consideration would be given on Report to an amendment that sought to give the same entitlement to utilities as applies in a tenancy or occupancy.

Vera Baird (Labour, Redcar)

There is a huge amount of difficulty in defining people who are vulnerable in order to set up any type of register at all. In this context, we are countenancing a person who is in a period of protection or is in the currency of a debt repayment plan, which restricts the ability of a qualifying creditor—a creditor with a qualifying debt—to take any action at all to recover their debt. A series of restrictions bite on those qualifying creditors, and they are, as I have said already to the hon. Member for Braintree, two sides of the coin. The debtor will pay and the creditors will forbear. Quite separate from that structure, there are rules that stop domestic utility suppliers disconnecting services. They must not do that here when they are a qualifying creditor, as is laid down clearly in the provision. More generally, people cannot cut water off without the courts’ consent and I am reasonably sure that the same applies to any utilities, but I am not certain. However, that is a broader point. In this case, utilities that are qualifying suppliers must not take that action to deal a debtor.

David Drew (Labour, Stroud)

I was going to make a speech, but I shall make my point in an intervention. I am intrigued about why we are talking about gas and electricity, not water. My hon. and learned Friend may have an easy explanation, but it is my understanding that it is now virtually impossible to disconnect someone for not paying their water bill. Therefore, I would be interested to know what the differences are. It is still possible to disconnect someone for not paying for gas and electricity, so there is a disparity. It would be interesting to know why no reference is made to water in the clause.

Vera Baird (Labour, Redcar)

That is undoubtedly a very good point to reflect on. It is nearly impossible to disconnect someone’s water. My noble Friend Baroness Ashton talked in the other place—it was in a different connection, but linked to the Bill—about the need to negotiate and to engage water suppliers, because they do not have much recourse to recover their debts, as they never can disconnect. In some circumstances—I am not sure when or whether it is with or without a court order—the other utilities can do that. In general, that is an interesting question, and one that we should consider. Within the confines of the Bill, however, we can prevent the gas or electricity supplier from cutting off supplies while the person is protected because they are paying under the arrangement they have come to with their creditors. From the point of view of the Bill, the situation is rock solid, but more widely, my hon. Friend the Member for Stroud is quite right and we should look at the issue.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

That was helpful. Perhaps the Minister could deal with these points in writing after today’s sitting. First, is there a need to put water in that context? Secondly, on a wider question, is a court order and a court appearance necessary for each of the utilities? If so, can we have reassurance about that? If not, perhaps we can come back to it on Report.

Vera Baird (Labour, Redcar)

I do not want to be dragged into offering more than I realistically can offer within the confines of the Bill, just because I am a good-natured, soft liberal person. I have given very strong reassurance about clause 133, which manifestly protects people in such a situation. I rather doubt whether, within the confines of the Bill, we have any possibility of thoroughly getting to grips with all the reasoning behind the disparity that my hon. Friend the Member for Stroud set out for us. However, I will look at the matter and have a conversation with the hon. Gentleman in due course.

Clause 124

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I have one question. The clause sets out who the supervising authority is—an issue to which the hon. Member for Braintree referred earlier. Subsection (1) says that it is the Lord Chancellor or anyone authorised by the Lord Chancellor. Whom does the Department have in mind? We went through this last year with regard to some legislation brought forward by the Department. There was an interim arrangement involving Ministers or civil servants, before a transfer to the Legal Services Commission. It would be interesting to know whom Ministers have in mind as an agency—it might be individual or whatever—both on an interim basis and in the long term.

Vera Baird (Labour, Redcar)

We do not have anyone in mind,other than the Lord Chancellor, at present. We are introducing clause 124 with an eye to the possibility of the role being delegated in the future. If that ever occurred, it would be likeliest to go to a judicial officeholder, but not inconceivable that it would go to some existing national advice board, such as the citizens advice bureaux. At present, we do not have anyone to whom we intend to delegate the role.

Simon Hughes (Liberal Democrat, North Southwark and Bermondsey)

I am grateful. I assume that when the time comes there will be the usual sorts of consultation about the appropriate way forward.

Michael Foster (Labour, Worcester)

On a point of order, Mr. Bercow. Due to the excellent progress that we have made under your chairmanship this afternoon, I beg to move that the Committee do now adjourn.

Further consideration adjourned.—[Mr. Foster.]