Baroness Sherlock (Lab)

My Lords, I thank noble Lords and thank the noble Viscount for doing some of my job for me, for which I am always grateful. I want to try to explain why the Government are doing this. Clause 92 inserts new Section 80C into the Social Security Administration Act 1992 to enact the “disqualification from driving” power. Schedule 6 inserts new Schedule 3ZB into the 1992 Act, containing the substantive provisions of the “disqualification from driving” power introduced in Clause 92. The introduction of this allows the DWP to apply to a court to disqualify a person temporarily from driving if they persistently and deliberately fail to repay their debt. It is therefore essential to boost the DWP’s ability to recover public money. However, it is worth being clear that this is a power to deal with a small subset of debtors who are persistently frustrating the recovery practice—I will come back to that in a moment. Preventing an evasive debtor from driving unless they repay is within the Government’s control in a way that they cannot circumvent. While it will be used as a last resort, it is an additional and effective tool in cases where debtors simply refuse and evade repayment. As I think I said at Second Reading, the latest results from the UK transport survey showed that 74% of adults have a driving licence. Debtors are unlikely to want to be inconvenienced by being unable to drive. They can avoid disqualification and any other enforcement action by making voluntary repayments. Schedule 6 sets out when the power may be used and how it will operate, including rules on the operation of suspended and immediate disqualification orders, variation and revocation of orders, as well as the grounds on which an order may be appealed. Appeals may be made to the appropriate court on points of law, including the terms of an order or the court’s decision to make, not make, vary or revoke an order. In accordance with Clause 90, this power will be used as a last resort and, as outlined in Schedule 6, only for the most serious cases for debts with at least £1,000 outstanding. The aim is to deter debtors from deliberately choosing to evade repayment, such as by moving their capital out of reach when they have the means to pay. Only when all other attempts at recovery have failed, including the new direct deduction order, will DWP be able to apply to the court for a suspended disqualification order. If the court agrees that the debtor had the means to pay but did not repay without a reasonable excuse, it will order the debtor to make what it assesses to be affordable repayments. The debtor can avoid being disqualified by making these repayments set by the court. Only if the debtor does not comply with the court’s repayment terms can the DWP apply for an immediate DWP disqualification order. It is at that point—again, only if the court agrees—that the debtor can be disqualified from holding a licence for up to two years. Before either a suspended or immediate order can be made, the debtor will have an opportunity to be heard by the court. It is important to note that the court cannot make either a suspended or an immediate order if it considers that the debtor has an essential need for their licence, such as that they need to drive as part of their job or to care for a dependant. The role of the court throughout this process is an important safeguard, which we have included to ensure a balance between taking robust action against those who deliberately evade recovery and preventing undue hardship. We recognise that stopping someone from driving is a serious step, so my department has built in several other safeguards to give debtors every opportunity to avoid that. For example, missing a single instalment will not normally result in an immediate disqualification order and, even where someone becomes disqualified, they can get the right to drive back when they start making their repayments and the court considers that repayments are likely to continue. But persistent evaders who have the means to pay their debts will no longer be able to evade paying. In response to my noble friend, I think he is challenging me as to why this is a good and effective means of doing it. I accept that it is unusual, but there is a small subset of the most evasive debtors: people who could pay and just will not. They might be, for example, debtors who transferred their money into cryptocurrency, or fraudsters who moved their capital to offshore accounts that the DWP cannot easily get at because they are outside our jurisdictions. It simply does not seem appropriate. If we cannot do anything else, there is one thing the state can do: suspend or remove their driving licence to pull them to the table. There may be some people for whom this is the only thing that works, so we want to keep it there in our armoury. The power has been used effectively by the Child Maintenance Service. I do not know whether we can go into enough detail in the CMS debt management data to find out whether I can answer the questions that the noble Viscount is asking, but I will have a look at that. But certainly the Child Maintenance Service believes that this is an effective tool for bringing people to the table when nothing else works. The Bill includes strong safeguards. The power will not and cannot be used where someone cannot afford to pay. The Bill is clear in paragraph 1(4) of new Schedule 3ZB, in Schedule 6, that the court must be satisfied that the person failed to pay “without reasonable excuse”. That clearly excludes cases where they do not have the means to pay the debt. Of course, the debt must also be of a certain value. Clause 90 says that it must not be “reasonably possible” to recover via other methods, including direct deduction orders, and that this can be used only after they have been given reasonable opportunities to pay.