Baroness Sherlock (Lab)

My Lords, I am grateful to the noble Viscount for his amendments and to all noble Lords who have spoken. We all want to ensure that, when someone who is subject to these debt recovery powers is vulnerable, we are aware of that and take appropriate steps to treat them as we should. Before I turn to the individual amendments, I shall recap on how direct deduction orders will operate and what safeguards are there, as this is relevant to the debate. These powers are vital to recovering funds that are owed by debtors who are—just to remind the Committee—by definition not on benefits or PAYE. If they were, we would have other ways to deal with them. These are people who have some other source of income, owe the DWP money and have simply refused to engage with us at all, at any stage. That does not mean that none of them is vulnerable—of course, they may be—but this is the category of people that we are talking about. The department has long-standing powers to recover public money that has been wrongly paid in excess of entitlement, through deductions from benefits or earnings, but not for those in that category. There are important new safeguards for these powers. They are there only as a last resort. First, before they can be used, multiple attempts at contact must be made, of different types. We must make at least four attempts to contact someone, at least twice by letter. We not simply trying once and giving up. We must have really tried to engage with people who simply do not engage with us all. Secondly, when a direct deduction order is necessary, the DWP must be satisfied that any deduction, whether a lump sum or a regular deduction, will not cause the debtor, other account holder or their dependants hardship in meeting ordinary living expenses. That means that, legally, the DWP must ensure that there is enough money remaining in an account after a lump sum deduction to allow the debtor to meet their essential living needs. In response to the noble Viscount, deductions must be fair in all the circumstances. This would include consideration of any vulnerabilities or additional costs related to living with a disability. The noble Viscount helpfully outlined what some of those will be. The point is that they must be particular to the individual. Each individual’s circumstances will be different. As the noble Baroness, Lady Fox, pointed out, not everybody who is poor is vulnerable, not everybody who is on benefits is vulnerable and not everybody who is disabled is vulnerable, necessarily. We need to understand their circumstances to know what is fair and ensure that they will not be pushed into hardship by a deduction. Thirdly, to ensure that the deduction is made in that way, the amounts will be decided following an affordability assessment based on information shared by the debtor’s bank and any subsequent representations made by the individual or their representative if they need someone to speak for them. Legislation sets out the maximum amounts that can be deducted for regular deduction orders. Fourthly, the Secretary of State can vary or revoke direct deduction orders in the light of a change of circumstances—for example, if the debtor had a change of income, made a new claim to benefit or something else of significance happened. Fifthly, when a direct deduction order is made, notice must be given to the bank and all holders of the account in question. If an order is still upheld after a review, or after considering information that has been presented, an individual who is not happy with that has a right of appeal to the First-tier Tribunal. Finally, I remind the Committee that a code of practice for the new powers has been made available for noble Lords to review. This sets out revised guidance on ways to identify and support those who are vulnerable. Ahead of public consultation, our team continues to work on the code collaboratively with key stakeholders, including charities such as Surviving Economic Abuse and the Money and Pensions Service. These are important safeguards which I hope will alleviate noble Lords’ concerns. On Amendments 99D and 109ZA, it is worth looking at what these amendments would do in practice. While we all share the desire to protect vulnerable groups, these amendments would place additional legal duties on the DWP to consider the impact of any vulnerabilities that a debtor may have, even when it could not be reasonably possible for the DWP to know. These requirements would be imposed without providing any new ways for the DWP to obtain that information. As I have said, the direct deduction order power is one of last resort, aimed at those who are not on benefits or in PAYE employment, where all reasonable attempts to engage with the individual have failed. These are individuals who have not responded to repeated contact from the DWP’s debt management officials about their debt. In the absence of meaningful engagement from the debtor or their representative, the DWP will not be aware of their current personal circumstances. This puts the DWP in a difficult, if not impossible position, regarding the obligations that the proposed amendments would impose. However, we need safeguards. The new safeguards that are introduced in this Bill, which I outlined at the start of my speech, alongside the existing safeguards and departmental processes for supporting those who are vulnerable, reflect a better approach to protecting vulnerable people. I shall now set out some of those existing safeguards and processes that are outside of this Bill, for the record. Layers of support already exist within the DWP to support those who are vulnerable or have complex needs. They include proactive vulnerability checks at different points in the customer journey, and where vulnerable individuals are identified, to ensure that the necessary support and adjustments are put in place. Where any additional support or adjustments are identified by a DWP official or are disclosed by the individual, they are recorded on DWP systems to ensure that all officials know how best to support them.