Baroness Anderson of Stoke-on-Trent (Lab)

My Lords, I welcome the opportunity presented by this group of amendments to talk about some of the safeguards in the Bill for the recovery powers. The liable person will always be provided an opportunity to voluntarily repay, as I said in the previous group. The Bill affords them rights of making representations, and review and appeal to a court or tribunal. There are set maximum regular deduction rates and we have written into the legislation that deductions must be fair and affordable. Vulnerability will be considered at every step of the way and action taken where appropriate to tailor our approach accordingly. As the Government have developed this approach, we have had to balance necessary and proportionate safeguards against the requirement for operational flexibility to efficiently and effectively recover money that the liable person should never have had in the first place—money that could and should have been used for the public good. I firmly believe that we have struck the right balance here. Unfortunately, the amendments tabled by the noble Baroness, Lady Finn, and the noble Viscount, Lord Younger, while well intentioned, will negatively impact our recovery activity while not providing any meaningful additional protections. Amendment 28 would limit recovery from joint accounts if the liable person had a sole account from which the full amount owed could be recovered within five years. To reassure the noble Baroness, Lady Finn, what this amendment misses is that recovery from a joint account is already limited to the beneficial interest of the liable person. I understand her concerns about how that would be allocated but we believe we have a responsible medium here. The joint account holder is able to make representations on this matter to ensure that the funds taken into consideration are solely those of the liable person. The amendment therefore limits the operational flexibility of the PSFA to undertake recovery action and provides no further protection to joint account holders. The time taken to recover will depend on the facts of the particular case and on the amount being recovered—five years may be suitable for some amounts but may not be where the PSFA is recovering substantially larger amounts and is seeking to do so over a longer period. There may also be circumstances where repayment needs to take place over a longer period; for example, for those who are vulnerable or face hardship but none the less have the money to make repayments. It is important that the PSFA retains the flexibility required to recover a wide range of debts of varying amounts and to tailor repayments to the liable person’s circumstances. Amendment 33A would require the PSFA to try to establish the joint account holder’s beneficial interest before using the formula defined in the Bill. This is duplicative and already provided for under Clause 20(3), which states that “the presumption does not apply where the Minister has reason to believe that the liable person’s beneficial interest is different from the presumed share”; that is, on review of the statements obtained for the account in question. As mentioned already, all joint account holders will have the opportunity to make representations as to their beneficial interest before any money leaves the account. Amendment 34 would require the PSFA to provide the direct deduction order notice to the liable person within seven working days of it being provided to the bank. However, the current drafting already stipulates that the order must be shared “as soon as reasonably practicable”. I cannot foresee many circumstances where this would ever be more than seven days; after all, we want the money back. It is also important to maintain an element of flexibility to ensure that the banks have sufficient time to put in place the restrictions under Clause 26. This is to prevent the liable person from moving money out of their account and circumventing the debt recovery process. Amendment 50 relates to applications to vary direct deduction orders and would compel the PSFA to set out its reasons behind any decision. This amendment is duplicative. The PSFA would be doing this anyway as a matter of good public law. The liable person should know why applications have been agreed or rejected, and it is necessary they know why if they are then to take up their review and appeal rights. The PSFA would also publish guidance on applications to vary, setting out its high-level approach. Amendment 53 relates to the unfortunate circumstance where someone dies while a deduction order is in place. It would compel the PSFA to write to the next of kin or estate to confirm the cessation of the order. The Bill already stipulates that the order ceases as soon as the PSFA becomes aware of a death. This simply creates another administrative burden for the PSFA as it would be expected to hold information on next of kin or personal representatives—information that the banks themselves are unlikely to hold as it is not mandatory for this information to be given to banks by account holders. The suggestion in Amendment 55 is an interesting one. It would prevent suspended direct deduction orders being restarted after a period of 24 months. This would impact the discretion that the PSFA could offer to those who owe money but have experienced an impactful, if temporary, change in their circumstances; for instance, through losing a job or undergoing medical treatment. It would also limit the operational flexibility of the PSFA, which would still have a duty to establish the most appropriate way of responding to such circumstances, balanced against the duty to recover money lost to fraud and error. For example, someone may come forward to the PSFA after a DDO has been put in place and seek to negotiate because of a change in their circumstances. They may seek to engage directly and to negotiate their payments going forward but then fail to see things through. This could happen over a period of two years; we would then have to start the process all over again. Moreover, the Minister will already have the power to revoke a DDO if the liable person’s circumstances necessitate it. I hope that these explanations reassure noble Lords and that the noble Baroness will withdraw her amendment.