Henry Bellingham (Shadow Minister, Constitutional Affairs; North West Norfolk, Conservative)

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 (Parliamentary Under-Secretary, Department for Constitutional Affairs; Redcar, Labour)

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 (Shadow Minister, Constitutional Affairs; North West Norfolk, Conservative)

Yes, indeed.

Vera Baird (Parliamentary Under-Secretary, Department for Constitutional Affairs; Redcar, Labour)

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 (Shadow Minister, Constitutional Affairs; North West Norfolk, Conservative)

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.