Road Traffic Debts

– in the House of Commons at 1:01 am on 27th March 2007.

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Motion made, and Question proposed, That this House do now adjourn .—[Mr. Heppe l l.]

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby 1:03 am, 27th March 2007

I am very lucky to be speaking to the House at this witching hour. However, the Table Office has somewhat marred the beauty, simplicity and elegance of my title, which was "The Enforcement of Road Traffic Fines by Bailiffs". I want to raise that issue because it is producing a huge extortion racket, with local authorities—which should protect the people—colluding with cheating bailiffs to impose huge and excessive charges that are then justified by lies and enforced by bullying. Those charges are imposed on motorists who have unpaid fines, many of whom do not even know that they have offended. That is the group I wish to talk about in particular. I am talking about the innocent, not the Nigerian embassy or the American embassy, or habitual offenders who do not seem to get caught. This is an extortion racket against the innocent.

I want to give an example involving my daughter, Susan Mitchell. She lives in Dulwich—all my kids are middle-class and have moved up in the world faster than I have. She arrived home from work on 5 March this year and set off to take the kids to their swimming class only to find that her car had been clamped by an enforcement firm called JBW. It was demanding £706.22, plus £1 if she paid by credit card—£707.22—to release it. It said that if that was not paid it would tow the car off and sell it.

This incident was related to an unpaid parking charge from 8 September last year. My daughter says that a ticket was not stuck on the car, and given that she was moving house at the time to a house two streets away, it seems clear that any reminder to pay and any notice of the court order had gone to the old house. We have this obstinate British habit of not sending court orders, reminders to pay and other such documents by recorded delivery. Every other European country requires proof of delivery; we do not, but we should.

The local authority, Southwark council, had been notified of my daughter's move. It had the change of address, but it did not bother to check its records; it simply handed the case to the bailiffs. The attitude was, "Here's a nice contract for JBW. Let's give them a nice little earner." JBW, the enforcement agency, claims to have checked with the Driver and Vehicle Licensing Agency—indeed, it charged my daughter £5.32 for that check—which had been notified of the change of address, so JBW knew of that change. Nevertheless, it claims to have made three visits to the old address, for which it charged my daughter £152. Incidentally, the new residents at the old address did not notice those visits, so they cannot have been door-knocking visits.

JBW also claims to have written to the old address warning of distraint action, as it is required to do. Again, it did not send that letter by recorded delivery. It explained to my daughter that it is too expensive to send these things out by recorded delivery. It gets only a statutory allowance for writing one letter—£11.20. Recorded delivery costs 68p and a first-class stamp 32p—a total of £1. So it prefers the certainties of second-class mail for the delivery of these documents, to the wrong address. It did not waste any more stamps writing to the new address, when it found it. In fact, it did not write to it at all; it simply snuck round and clamped the car.

This is the fundamental problem. Bailiffs do not want people to pay up on a first approach, which my daughter would have done once the situation had been explained to her. There is no money for the bailiffs if the person coughs up. They get fees only if they visit the house, so we get these phantom claims for calls that were never in fact made. The streets of London are presumably filled with ghostly visitors flitting from house to house, unnoticed by the householders. They get money only if they distrain or clamp the vehicle, because that entitles them to charges, which they set.

JBW clamped my daughter's car and charged her £240 for doing so, which is double the rate that it says it charges for that service. That made a total of £707, of which £155 went to Southwark. Jamie Waller, the boss of JBW, says in an affidavit that he varies charges by area, so presumably the posh areas get the higher charges and the less well-off ones get the lower charges. My daughter must therefore live in a middling-posh area.

Eventually, once my daughter had paid, JBW came to remove the clamp—at 6 o'clock in the morning the next day. Anybody in that situation would be as distressed as my daughter was. What do they do? Who do they turn to? Naturally, she rang Southwark council for help. It told her that the charge was "not unreasonable". A charge of £707 seems to me absolutely monstrous, but to Southwark council it is not unreasonable. It must pay its staff very well indeed if they can afford to pay such charges out of their own pockets. The council is very courageous in committing itself to the phrase "not unreasonable".

Southwark council also told my daughter that this was none of its business—it was between her and JBW. That is not true, because the council has a duty of care toward its residents; however, it also has a contract with JBW. However dodgy JBW might be, Southwark has a contract with it to perform this service. That makes it liable for the acts of its agents, because JBW is acting as the agent of the council. Instead of giving that useless and untrue information, the council could have told my daughter that she could have made a statutory declaration in the county court, which would have cost her £5. That would have gone to the Northampton parking fines centre, stayed the process and the clamp could have been removed. However, Southwark council was spectacularly useless and did not give my daughter that information. It did not do so because it is in collusion on this issue with JBW, because it has a contract with JBW for the charges. People are left defenceless and bullied by the bailiffs into coughing up. My daughter coughed up £707.22.

I was appalled by that enormous and ridiculous charge, so I began to investigate with the help of the London motorists action group. Sheila Harding, Philip Evans, Alison Laughton and others were all very helpful and very angry. Through those investigations, I have built up a picture of what is a huge extortion racket operated by a £6 billion industry, primarily in London but all over the country. They are private contractors on contract to public bodies.

The industry is cutting corners, lying and pretending that it has done things that it has not, because the fee structure does not pay it for simply getting the money, which is what the local authority presumably wants. That is not the real job of bailiffs. Their real job is to distrain goods. That is their traditional role and they only get any fees if they distrain goods—or clamp cars. So they fabricate charges, claim for phantom visits and use uncertified staff. In fact, Sheila Harding keeps a record of 103 inquiries about acts that should have been done by certified bailiffs, but when checked only 47 had been. I do not know whether Mr. Marsh, who clamped my daughter's car, is certified. Southwark council does not seem to know and the firm is not saying. He may be certified or he may not be. All I know is that I do not like his tone or aggressive attitude in a recording of his interview with my daughter.

Sheila Harding's research also shows that there are only 1,521 certified bailiffs in the country. Those 1,521 certified bailiffs are dealing, on 2006 figures, with 4 million liability orders for unpaid council tax, 900,000 unpaid parking charges in London and 1.6 million people in arrears with child support. They cannot do that, so they are using uncertified staff. Sheila Harding's research shows that the local authority contracts, which should be open and used to regulate the bailiffs, are useless. Some of them are secret and people have had to apply under freedom of information legislation to find out about them, none of them is published, and many of them have lapsed. One contract, Hammersmith's, was lost and all of them are weak. The result is that the extortion racket is unchecked.

I shall give some examples. Equita, which is a subsidiary of Crapita—I am sorry, I mean Capita—is the biggest firm in the business. Alex Henney was clamped by Equita and he took the case to the local ombudsman and proved that Equita and Camden had both lied about the visits made—phantom armies making phantom visits. Simon Aldridge was charged £704. He took Equita to court and the judge accepted that the visits had been claimed for but not made. Duncan McGowan was charged £2,084 and he got £1,426 back through the small claims court. I have many more examples—these are just a sample. In one case, a man had a letter dropped through his letterbox saying that a certified bailiff had visited him. He dashed out and followed the man who had delivered the letter. That man was delivering a sheaf of similar letters, and he turned out not to be a certified bailiff but just a messenger. In 2004, Equita's pre-tax profits amounted to £7.4 million, against capital employed of £5.8 million—a return on capital of 127 per cent. The company does not make that much from £10 letters and regulated fees.

Bailiff certification is a licence to filch money from people over unpaid charges. That was exposed by the BBC's "Whistleblower" programme last September. Given what I have learned through my daughter's experience and my research, the question that I want to ask is, "What should we do about it?" The problem is that private bailiffs are working on public authority contracts, so my first suggestion is that local authorities must exert tighter control over contractors. The Transport Committee recommended that in 2005. It wanted careful regulation by the local authority to ensure that charges, operations and practices were all transparent. That should be put in place: when they hand out a contract, local authorities should exercise their powers to ensure that it is not a nice little earner, but a duty to be fulfilled.

Secondly, the fees need to be regulated. The present structure is based on the old-fashioned view that bailiffs distrain goods, but it should recognise that nowadays they are about getting the money to pay charges. We need a structure that places the emphasis on getting the fines paid, not on grabbing goods—something that bailiffs want to do because that gives them access to bigger fees. Some industry leaders are trying to develop a more transparent fee scale. Good on them—I hope that they are successful and that the Government encourage them.

Finally, we need a regulator. Cowboys need a sheriff, and the mafia cannot be regulated by the mafia. Crooks—and I use that word in the Australian sense, to describe people who are "crook"—need a rule-maker to control them. The Government have proposed that the Security Industry Authority should be the regulator, but I do not think that it is up to the job. The SIA is a licensing authority, not a regulator, and bailiffs are not part of the security industry. We need a proactive regulator who can investigate complaints.

The Government began a consultation process in January but, unfortunately, they have set their face against giving the regulator the ability to investigate complaints. It is essential that someone protect people who suffer the sort of problems that I have described. It is daft to exclude investigation from the regulator's role. The regulator should disqualify, discipline, regulate fees, hear appeals, and be available to help people faced with the sort of bullying that my daughter experienced.

I must warn my hon. and learned Friend the Minister that the best that her consultation paper proposes is not good enough, and that it is a shame to see the Government back-tracking. In the 2001 Green Paper, they suggested a dedicated regulator, and that was a good idea. However, they had pulled back a little by 2003, and the Tribunals, Courts and Enforcement Bill still has not got the matter right.

It is a rare pleasure to be here at 1.18 in the morning and chatting up my hon. and learned Friend. I am enjoying the experience, and I am delighted that she is replying to the debate, as I know that she has a concern for justice and fairness. I hope that she will be bold and make sure that the Tribunals, Courts and Enforcement Bill gets this matter right.

We need a regulator who can beat the bastards, bash the bullies, control the crooks, comfort the complaining and ease the pains of the people. Unless we get that, the sort of extortion racket that I have described will continue. I hope that my hon. and learned Friend will give us a regulator who can deal with these people.

Photo of Vera Baird Vera Baird Parliamentary Under-Secretary, Department for Constitutional Affairs 1:19 am, 27th March 2007

First, may I congratulate my hon. Friend Mr. Mitchell on securing parliamentary time for this important and timely debate? The Department for Transport is responsible for policy and the statutory framework for the enforcement of some road traffic regulations, including parking penalties and debts resulting from them. My Department is responsible for the bailiff certification process. Section 78 of the Road Traffic Act 1991 allows the Lord Chancellor to make orders for road traffic debts to be enforced by certificated bailiffs. It should be those certificated bailiffs, working for local authorities, who deal with the enforcement of road traffic debts. My hon. Friend referred to the Tribunals, Courts and Enforcement Bill, which finished its Committee stage in the House of Commons today. It includes important changes to enforcement agent law, which I hope he will find more convincing than he expects. Enforcement agent law is mixed up in myriad legislative fragments and in the common law. The role of bailiffs has evolved piecemeal over centuries. There is a need for the law to be clear, as well as a need to regulate the individuals and businesses responsible for the activities. What we are doing is to legislate and to regulate.

The Bill consolidates enforcement agent law and puts it all in one place, which is going to make it a lot easier for enforcement agents, creditors, the advice sector and debtors to understand it. Those provisions will apply to the enforcement of road traffic debts. Schedule 12 sets out a new procedure that must be followed when enforcing debts by taking goods. It is a framework, and further detail will be provided in the regulations to follow. A detailed policy statement has been laid before the House that sets out what we intend to include in regulations. In paragraph 160 of that statement, we set out what the enforcement agent will need to provide to the debtor when entering the premises. That information will include charges which have been made, information on any further charges that could be made in relation to the debt, and an outline of avenues of complaint and rights of appeal, including how to appeal against excessive fees.

There are different fees depending on the type of debt. The Bill provides for one fee structure and puts all fees in one place, which should empower people to resist abuse. Importantly, there will be an up-front fee element, payable to bailiffs so that they do not act entirely in pursuit of a cut of the cash recovered—we hope that that will help. It will be necessary, through the consultation on the detail, to ensure we get the level and nature of the fees right to avoid possible abuses such as grabbing goods and phantom visits of the kind discussed by my hon. Friend. As I said, there will be an appeal route and a complaint route. The Bill includes an enhanced and extended certification process, which will make a major contribution towards our goal of a fully regulated, trained and professionalised enforcement industry. No one at all save state employees can practise as an enforcement agent or bailiff unless they are certificated after that provision comes into force.

Under the new certification process, certificates will be issued by a county court judge, as they are now, but the conditions will be much stricter. There will be a greater emphasis on training, especially in diversity awareness, conflict avoidance and dealing with the vulnerable. In my view, that is about getting all members of the bailiff industry to understand, as many of them already do, that they are working in the public interest, and are not simply debt collectors working single-mindedly in the interests of their creditors on a commission. They are agents of the public authorities, notably the courts. However it is our longer-term intention for the whole enforcement industry, other than Crown employees, to be overseen by an independent regulatory body, and we are confident that the Security Industry Authority is an appropriate body to cover such bailiffs. An affirmative order under the Private Security Industry Act 2001 will bring bailiffs within the terms of the Act. On 30 January, as my hon. Friend said, a joint consultation paper was issued by the Department for Constitutional Affairs and the Home Office on the regulation of enforcement agents. The SIA contributed to that consultation, and we indicated that it is our preferred option. The consultation will end in about a month, and an announcement will be made in the summer.

The SIA's regulatory structures are strong. Since it has been able to regulate doormen properly, it has done a good job. It has raised standards immensely—the good-quality professionals are pleased with that—and it has got rid of many of the bandits.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

I do not think that will be strong enough. The SIA is not a regulatory body; it is a recording and registration body. Bailiffs are not part of the security industry. Abuse is rife and there will be more cases—for example, as the police issue on-the-spot fines—that press further down the social scale, where difficulties are unique. People need a body to which they can appeal; the body needs to be able to investigate and hear appeals, and the SIA cannot do that.

Photo of Vera Baird Vera Baird Parliamentary Under-Secretary, Department for Constitutional Affairs

I realise that my hon. Friend is not yet convinced that the SIA is the right body. I have already outlined step 1: nobody will be a bailiff unless they are certificated by the court, which should get rid of a large number of the bandits. As my hon. Friend says, there are not a large number of certificated bandits and many of the types of people to whom he referred are still in the business. Training will be part and parcel of the job of the SIA. I would have thought that my hon. Friend's constituency experience was similar to mine, in that the quality of doormen has infinitely improved since the SIA had a proper role in regulating them. Although there is a difference between a bailiff and a doorman, it seems to us that the SIA is the right body to take the regulatory role.

The SIA has regulatory structures; it will have the right tools to encourage compliance and will work first to achieve it rather than using enforcement. However, it will set the competences required for individuals and accredit training, and ensure that all enforcement agents have achieved levels of competency. It will also licence the managers and supervisors of front-line operatives and provide a voluntary approved contractor scheme for business.

The SIA's enforcement policy code sets out in detail that it will use oral and written warnings first if it finds that companies or individuals fail to comply, but there are also penalties in the Private Security Industry Act 2001—a fine of up to £5,000 maximum or six months' imprisonment for various offences. In addition, we will be looking at the possibility of using alternative dispute resolution for complaints. There will thus be an interim system of enhanced certification with the emphasis on training, but there will be full-scale regulation soon. I urge my hon. Friend to respond to the consultation with some of the stories he has told us tonight.

On the actuality of the enforcement of road traffic debts, there is a set procedure which the Government believe gives motorists adequate opportunities to demonstrate that a penalty charge notice has been incorrectly issued. It is also intended to give them ample opportunity to pay. It is only when a motorist disregards the unpaid and unchallenged penalty charge notice that it becomes a debt and the matter will be sent to a bailiff. Only then will the motorist have a bailiff at their door. It is the motorist's responsibility to settle their debts and avoid enforcement.

The parking operational guidance from the Department for Transport to local authorities is being redrafted and will be sent out for consultation later this year. We will take the opportunity then to enhance the existing guidance to local authorities on their contracts with bailiffs, so we will approach the matter from that angle, too.

Although my hon. Friend is clearly unhappy with the current position I hope he can see three things: first, that the Government are apprised of the problem; secondly, that we are legislating for simplification and certainty of bailiff powers, so that everyone will know what they are—the information will be promoted through leaflets and websites; and thirdly, that we are intent on regulating strictly and strongly the bailiff industry, a small part of which has been responsible for the kind of depredations to which he has referred tonight.

I am sorry that my hon. Friend has had such trouble in his family. He is right to bring it to the attention of the House and I congratulate him again on securing the debate. We intend to protect citizens against such things happening in the future.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past One o'clock.