Tribunals, Courts and Enforcement Bill [Lords]

My hon. Friend has bought himself an opportunity to serve on the Committee. I will take advice on the point that he raises about clause 92(4)(d). Part 5 is about debt management and relief. It affords greater protection to those who should be able to pay their debts but cannot deal with their financial problems, or require temporary protection to enable them to get back on their feet. It also deals with those who cannot pay their debts and are unable to access current debt relief procedures. It introduces a package of targeted measures that improve and extend the range of solutions available to help debtors with low incomes and debts. Those solutions seek to promote financial inclusion and are targeted particularly at those who are disproportionately affected by debt and are generally least able to deal with competing creditor demands. Chapter 1 of part 5 updates and amends the system of county court administration orders, removing the statutory limit on debts, which is currently set at £5,000, and allowing the Lord Chancellor to set it at a more realistic level so as to be helpful to more people. Chapter 2 introduces an enforcement restriction order allowing the court to make an order to protect a debtor from enforcement by their unsecured creditors for up to 12 months. That is likely to cover a sudden and unexpected deterioration in a person’s financial circumstances—for instance, through losing their job or sudden illness—and where there is a realistic prospect of their being able to repay their debts within a reasonable time scale, through recovery, for example. That is an important provision. Chapter 3 introduces a new individual insolvency procedure called the debt relief order for those who owe relatively little, are on low incomes with low levels of assets, and who have no realistic financial prospect of paying their debts within a reasonable time frame. Bankruptcy would be disproportionate for such people, who are financially excluded from the other debt solutions that are available because they have no money to pay their creditors and cannot afford the £325 required to present a petition for bankruptcy. Chapter 4 will let the Lord Chancellor approve debt management schemes. Many organisations negotiate with creditors on behalf of debtors and set up debt repayment plans, but those depend on voluntary creditor participation, and one unco-operative creditor can block the creation of such a plan. The Bill will allow that to be addressed. These measures strike an appropriate balance between the rights of the creditor and the needs of the debtor. They provide clear incentives to encourage debtor compliance for the lifetime of an order, including powers to tackle abuses. At the same time, orders that include a repayment element will offer creditors potentially higher returns than provided by the current system. Details of orders made under the new measures in part 5 will be available on public registers so that creditors can make better- informed decisions on future lending. In conjunction with the Bill, the Government are committed to encouraging responsible lending through a range of actions, including implementation of the reformed consumer credit licensing regime introduced by the Consumer Credit Act 2006. Part 6 provides immunity from seizure for cultural objects that are lent to the United Kingdom for temporary exhibitions to the public at an approved museum or gallery. We currently have no anti-seizure legislation, and foreign lenders are becoming reluctant to lend works of art to the UK. The problems that that may cause were illustrated by the seizure in 2005 of 55 Russian impressionist paintings on loan to an exhibition in Switzerland, under a court order obtained by one of Russia’s creditors. This places us at a disadvantage compared with other countries and will ultimately limit our museums’ ability to stage major exhibitions. Apparently, problems have already arisen. An important Chinese exhibition planned by the British Museum for 2004 was cancelled after a major loan from Taiwan could not be secured because the lender could not be assured that the material would be protected from seizure while it was in the UK. The measure is particularly important for London as it becomes the centre of the world stage in the lead-up to the 2012 Olympics, at a time when many of our leading institutions are planning major exhibitions to coincide with that.