Question proposed, That the clause stand part of the Bill.

With this it will be convenient to consider schedule 6.

The clause inserts proposed new section 80C into the Social Security Administration Act 1992 to enact the disqualification-from-driving power. The introduction of the clause will allow the DWP to apply to the court to disqualify temporarily a person from driving, if they persistently and deliberately fail to repay their debt. The power is vital to boost the DWP’s ability to recover public money.

In accordance with clause 89, the power will be used as a last resort in the most serious cases, where the outstanding debt is at least £1,000 and where the debtor has persistently and deliberately evaded repaying their debt, such as by moving their capital out of reach of a direct deduction order, introduced under schedule 5, despite having the financial means to repay.

Schedule 6 inserts proposed new schedule 3ZB into the 1992 Act and it contains the substantive provision of the disqualification-from-driving power introduced under clause 91. The schedule 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 appellate 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.

Only when all attempts at recovery, including the new direct deduction power, have failed will the Department for Work and Pensions be able to apply to the court for a suspended DWP disqualification order. If the court agrees that the debtor had the means 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 those repayments; it is only if the debtor does not comply with the court’s repayment terms that the DWP can 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 opportunity to be heard by the court. We recognise that stopping someone from driving is a serious step, so my Department has built in several safeguards to give debtors every opportunity to avoid that. For example, missing a single instalment will not result in an immediate disqualification order. Even when someone is disqualified, they can get back the right to drive when they start making the repayments and the court considers that repayments are likely to continue.

However, persistent evaders who have the means to pay their debts will no longer be able to evade paying; it is against them that we would utilise this power. It is important to note that the court cannot make either a suspended or immediate order if it considers that the debtor has an essential need for their licence, such as if they need to drive as part of their job or to care for a dependant. That important safeguard in schedule 6 ensures a balance between taking robust action against those who deliberately evade recovery and preventing undue hardship.

The powers are key to recovering funds from those who deliberately evade repayment of public money owed to the DWP. Having outlined the main provisions in clause 91 and schedule 6, I urge the Committee to support them.

Clause 91 makes provision for a liable person to be disqualified from driving. Any disqualification from driving will always be suspended in the first instance, subject to the liable person complying with what the court has assessed to be affordable and reasonable payments. When disqualification does occur, it is temporary and the liable person can have the disqualification lifted by satisfying the court that they are now making and will continue to make repayments.

We support the clause in general, but I have a few questions for the Minister about the practicalities, which are worth debating. First, however, will he clarify whether the clause is for cases of fraud, error or both? From what he said, it feels as if it is for both, and it is worth getting that on the record. What safeguards will the Department put in place to ensure that someone is not disqualified unnecessarily? Again, it sounds as if there is a long process before getting to that point. Is there a right of appeal or can the process be stopped before the disqualification takes place?

A few additional questions came to mind as I listened to the Minister just now. What role are the DVLA and the police expected to play in the wider disqualification? Who is responsible for the enforcement of that disqualification? I certainly know of a neighbour of mine who was disqualified for two years but continued driving; it was frustrating when I knew what he had done. Who would be responsible for that enforcement? In that instance, I knew that I could ultimately go to the police, but the scenario could be different in this case.

Likewise, will the decisions to disqualify from driving be publicised as they are when someone is disqualified for speeding or drink-driving? Again, that is part of the punishment; it also enables other people to know when somebody is in breach and promotes enforcement. It is also worth querying what measures might be put in place when somebody cannot be disqualified. The Minister said that some people would not be disqualified because of their jobs or family situations. What would be the deterrent for those people?

Furthermore, what if the person were not a driver or in possession of a driving licence? Obviously, recovery will be attempted from bank accounts, but if losing a driving licence is the final stop point it will be in the interests of fraudsters to divest themselves of theirs. We need to make sure that whatever it is that we are trying to achieve in the Bill, there are no shortcuts or opportunities for people to evade the repayment that the Department seeks.

I am uncomfortable with this proposal, because it seems unfair that one group of people should be liable to a punishment and not another. If someone cannot drive or they do not have a car, this punishment means nothing to them, whereas another group who do drive are affected—and some of them very deeply, depending on their lifestyle, such as living in the country or other necessary means. I am fundamentally uncomfortable with what seems to be a punishment that falls on only one group of people, when it should be levied equally.

As we have been discussing, schedule 6 and clause 91 make provision that, where all other methods of debt recovery have failed, including the direct deduction order measures we have been discussing, the DWP may apply to a court to have the debtor disqualified from driving. Like the hon. Member for Horsham, I have real concerns about these new powers. I cannot see how this specific novel civil penalty of removing a driving licence is at all appropriate to the particular group of people we are discussing, nor do I see the equivalence to the people being enforced upon by HMRC and the Child Maintenance Service, which have similar powers.

Legitimate benefit claimants who are overpaid through error, make a mistake or for any other reason owe money to the DWP are, almost by definition, in need of help. They might often make mistakes or fail to disclose information through an oversight, and their failure to engage with the DWP to date might be due to genuine incapacity and health issues. I am therefore very concerned that there are ineffective safeguards in the court process for these powers.

Although the DWP must apply to the court for the disqualification order, the court does not have discretion to refuse unless the debtor needs a driving licence to earn a living or has another essential need for one. It is unclear the extent to which this will protect vulnerable benefit claimants who have not engaged with the DWP due to incapacity, illness or mental ill health, or for whom driving is not essential for their work, but may be essential for their wellbeing or family life. I am not sure that the proposed legislation is clear enough about what will be deemed essential or what will be reasonable for the court to object to.

I also have concerns, as outlined a moment ago, that these powers cannot be exercised unless the people concerned have tried every other method, from benefit deductions or deductions from earnings to the direct deductions from bank accounts—the measure we have just discussed, which is extraordinarily intrusive on people’s financial information and privacy. Given that these powers would only be used where it appears that those other powers cannot be, is it not true that they are basically only for when a debtor cannot physically pay back what they owe? In effect, this measure of removing the driving licence is a punishment. It is a poverty penalty for those who do not have the means, despite all the intrusion that Ministers have gone through to establish that, to return what they have been overpaid.

I cannot support this power. It is incredibly punitive. I do not think it will create the conditions in which debtors are encouraged to engage with the DWP, but it could create dire consequences for individuals who are already struggling and least able to afford repayments.

I will attempt to answer those questions, and hon. Members are free to intervene if I have missed anything. The Opposition spokesperson, the hon. Member for South West Devon, asked whether this would be a power that is implemented in response to just fraud, or fraud and error. Because it is in response to a failure to repay a debt, it could be utilised for either. The criteria for its use is not how the overpayment came about, but whether the person has engaged to pay it back.

The safeguard around whether somebody is disqualified unnecessarily is all the various measures that we have attempted previously, plus the determination of the court. Responsibility for enforcement would lie with the Courts and Tribunals Service and the DVLA. However, if somebody was driving without a licence, that would clearly also be a legal issue. On the question whether we would advertise that somebody had had their licence suspended, we would not, because no crime has been committed; the suspension is just as a result of somebody failing to repay a debt. That is distinct from somebody who has had their licence removed because they have broken the law through drink-driving or some such crime.

On the deterrents for non-drivers, to respond to the hon. Member for Horsham, this is just one of a suite of powers available to us. We could also look at options such as charging orders, were this power not available to us, but we have seen from the Child Maintenance Service that this is a really strong lever to bring people to the table. It is a power of last resort, and a power that, in practice, is used very sparingly; it is more of a deterrent, when people are refusing to engage with us or to repay money that is owed.

In the light of the Minister’s confirmation that this power does refer both to error and fraud, I am all the more concerned. Removing a driving licence can mean the removal of a means of income. It is almost like the old-fashioned debtors’ prison: someone is in debt, so they are put in prison, and then they cannot get out of their debt. It is a Catch-22 situation.

I understand that the power has been used regarding the Child Maintenance Service. I have a case in Horsham where a constituent feels that he is being unreasonably demanded of; he is in trouble because he will potentially lose his job because of just such an order. Therefore, this power could be applied inaccurately or incorrectly—it is inevitable that in a large organisation there will be mistakes—so I am concerned that the power seems both very extreme and, as I said before, not generally applied. It should be generally applied in order to be legitimate.

On the point about a debtors’ prison, if somebody requires their vehicle for work, that is a criterion that a judge can consider in terms of whether a licence should be disqualified. It is also worth remembering that, in all cases, the initial move would be to suspend the suspension of the driving licence to give somebody the time to engage with us and start to pay. While, as I say, this is baked in as a last resort, we have put a number of break points in this process for people to engage. Indeed, even after we have suspended the licence, if somebody starts making repayments, they can have their licence reinstated. However, we have explicitly stated that caring responsibilities and the need for a car for employment purposes are criteria that would mean that we would not look to pursue that suspension.

Turning to the comments from the hon. Member for Brighton Pavilion, I understand where she is coming from. She is consistent in her view of an erosion of civil liberties coming about as a result of many aspects of this Bill. However, I must say to her that the idea that we have exhausted everything, including deductions from benefits, fundamentally misses the point about the cohort of people who would be in scope for this power. Benefit claimants and people who are paid through PAYE would not be in scope of the driving licence power; it would be people who are no longer on benefits. Indeed, if they were on benefits, we would be able to deduct from those benefits directly, without needing recourse to such actions.

I therefore take a fundamentally different view from the hon. Lady on whether this amounts to a poverty penalty. Clearly, the poorest people would not be impacted by this power; it is for people who we know have the means to pay. Usually, we know they have the money, but they have moved it out of our reach, so we have ascertained their ability to pay, but it is not possible to lay our hands on those funds. This power—like wider mechanisms for people who do not drive, such as charging orders—is the initial lever to bring people to the table.

As I said in response to the hon. Member for Horsham, before we suspend a licence, we will ask people to engage with us. After agreeing the right to suspend that licence, we will give somebody a further opportunity to engage with us and to begin making regular repayments. After the licence has ultimately been suspended, there will again be the opportunity to commence regular payments and have the licence reinstated. All that is a power of last resort.

I will give the Child Maintenance Service statistics for context. The CMS utilised this power on seven occasions last year; six of those were suspensions of suspension and only one was an actual suspension of a driving licence. That tells us that this power is important as much as a deterrent as in practice. It is for that reason that it forms a part of this Bill.

Question put and agreed to.

Clause 91 accordingly ordered to stand part of the Bill.

Schedule 6 agreed to.

Ordered, That further consideration be now adjourned.—(Gerald Jones.)

Adjourned till Thursday 13 March at half-past Eleven o’clock.