Official Report 518KB pdf
Common Financial Tool etc (Scotland) Regulations 2014 [Draft]
Bankruptcy (Money Advice and Deduction from Income etc) (Scotland) Regulations 2014 [Draft]
Debt Arrangement Scheme (Scotland) Amendment Regulations 2014 [Draft]
Bankruptcy and Debt Advice (Scotland) Act 2014 (Consequential Provisions) Order 2014 [Draft]
We move to item 3. The minister has been joined by Claire Orr, who is the executive director of policy and compliance at the Accountant in Bankruptcy. Chris Boyland is still with us, and we are also joined by Graham Fisher from the Scottish Government legal directorate.
We have a raft of subordinate legislation to consider. As the minister will be aware, we have four instruments that are subject to affirmative procedure to consider, and later we will consider three instruments that are subject to negative procedure. I invite the minister to introduce and speak to the instruments.
I will be brief, because the instruments are complex and the committee has a lot to consider. The instruments will bring to life provisions in the Bankruptcy and Debt Advice (Scotland) Act 2014. They form the next layer of our reforms—the most significant reforms to bankruptcy law for a generation—and the four affirmative instruments that the committee has been asked to consider will be invaluable in supporting measures including the single common financial tool and mandatory money advice for all debtors.
As announced during the bill’s passage, the first instrument—the draft Common Financial Tool etc (Scotland) Regulations 2014—will adopt the common financial statement that has been published by the Money Advice Trust as the heart of the common tool method for setting a fair debtor’s contribution in Scotland.
The next instrument—the draft Bankruptcy (Money Advice and Deduction from Income etc) (Scotland) Regulations 2014—fills in significant details about the role of money advisers and provides the forms for telling employers and others when deductions are made from income under the new provisions in the act.
The draft Debt Arrangement Scheme (Scotland) Amendment Regulations 2014 will do two things. First, they will make changes to the debt arrangement scheme to take account of the common financial tool, and secondly they will extend the scheme’s advantages in making protected repayments to certain legal persons, including partnerships.
The draft Bankruptcy and Debt Advice (Scotland) Act 2014 (Consequential Provisions) Order 2014 will make technical amendments to other legislation as a consequence of the 2014 act, by replacing income payment orders with debtor contribution orders and making changes to the provisions on debtor’s discharge.
I will make two general points. The first is about timings and consultation. I have heard some stakeholder views that we have not consulted properly and that we have rushed through the regulations. I am surprised by such comments, in particular those from the Institute of Chartered Accountants of Scotland. ICAS is the body that the AIB has consulted most. It is represented on the CFT working group, the business DAS working group and the notes for guidance working group. it has also seen every draft set of regulations that we have been able to share.
My second point is about the guidance. There are three layers to a regulatory regime—primary legislation, secondary legislation and guidance. Each is, perhaps, as important as the other. Work on drafting the necessary guidance is well under way, and I have heard some positive feedback on the collaborative way that that is progressing.
We will continue to work in partnership with stakeholders and to listen to their concerns as we develop our guidance and operational processes. For example, we have again heard representations from the Institute of Chartered Accountants of Scotland and R3 that it would be helpful to involve external people in the new review process. I say now that, if that will best serve the interests of openness and transparency, I am happy to agree to that and to create a role for independent experts in the final review process that will be rolled out in April.
I hope that that demonstrates that neither our minds nor our doors are closed to stakeholders’ views. We will continue to engage and listen. I am happy to take questions and, given the complexity of some of the instruments, my officials also stand ready to answer the really hard questions.
Before members ask about detailed issues, I will pick up on your general observation about consultation. The committee has had submissions from ICAS, R3, the Law Society of Scotland and StepChange Debt Charity Scotland. They all have a common theme, which is concern about the rapid process for producing the instruments and the lack of proper consultation on the detail.
All the submissions make similar points about the manner in which consultation was conducted. Stakeholder events were held, but it was felt that, even when stakeholder opinions had general support, those opinions were not reflected in the regulations as they are finally drafted. Detailed concerns about some of the measures remain. I heard what you said, but do you appreciate that stakeholders have quite a lot of concern about the manner in which the instruments have been produced?
I understand that stakeholders have concerns. We work extremely closely with them, as the committee will be aware from our extensive work together on such matters in the past three years. We are always keen to consult, share views and listen. However, we must make decisions and implement acts of Parliament. We pass the law, which is there for a purpose.
The common financial tool will end the disparity of having different measures for assessing the contributions that debtors should pay from their income. It is ludicrous that we in Scotland have different systems for calculating contributions from income, which leads inevitably to disparities and discrimination. The Parliament’s policy is to get on with implementing a new system that is fairer to debtors. That was manifest in the discussions in Parliament.
I will take each point in turn, because I am not satisfied that the criticisms that we have heard have substance. I have gone to some lengths personally to study the precise criticisms from stakeholders, including StepChange, which does a terrific amount of good work to help tens of thousands of debtors and whose views plainly come from the coalface and deserve to be taken seriously.
The AIB consulted extensively on the development of the instruments. It convened the CFT working group, the business DAS working group and the notes for guidance working group. It is difficult to see how many more working groups could be established. We have had bespoke working groups for each significant area of work.
The AIB also consulted the Office of the Scottish Charity Regulator, the Scottish Civil Justice Council and the Scottish Court Service. It shared drafts of some regulations with members of the working groups and made significant changes as a result of that engagement. I have forgotten the precise details of the examples, but if members wish to know more, I am sure that we can demonstrate some of the changes—I referred to one in my opening comments.
The AIB held a series of stakeholder events—two were in Glasgow, one was in Edinburgh and one was in Inverness. It is important to note that attendees at the events were entirely free to ask whatever they wanted. The stakeholder events significantly influenced our drafting approach.
I am happy to do my best to answer any points of detail, but I think that the concerns that have been expressed by the stakeholders are, perhaps, due to the fact that, like us, they are concerned to ensure that we all do our best for people who are in debt, and that we balance their interests with the rights of creditors.
The Institute of Chartered Accountants of Scotland, R3, StepChange, Citizens Advice Scotland and others care a lot about what they do. We respect that. They have a vital role to play, and we work closely with them and treat their views with respect. However, at the end of the day, we are the Government and we must decide. We take the responsibility for that.
Good morning, minister. CAS has expressed concerns about the effect of regulation 4 of the draft Bankruptcy (Money Advice and Deduction from Income etc) (Scotland) Regulations 2014 on the accreditation of money advisers. There is a concern about whether advisers will be able to do what is asked of them by way of gathering information that is to be kept for two years, given the chaotic lifestyles of some of the people whom they are charged with advising. I understand that that requirement is mandatory. If that is the case, are we making things difficult for advisers? If they fail to meet the requirement, they could be suspended as money advisers. That would have a significant impact on the individuals concerned and perhaps also on organisations.
There are two points. CAS is concerned that the regulations give the AIB powers to revoke or suspend a money adviser’s approval, but the AIB would not revoke an adviser’s approved status without notification, representation and the right to review that in court. You will recall that we discussed in considering the Bankruptcy and Debt Advice (Scotland) Bill the fact that there must be a right of appeal. There were concerns about processes, and I made the point that there is always a right of appeal or review. That needs to be taken into account when discussing the idea that there is an overprescriptive or draconian power.
On the detail of the evidence, we have been perfectly clear all along that the regulations would be developed on the basis that money advisers should already comply with the existing requirements under the type II Scottish national standards for information and advice providers and in particular the requirement for advisers to collect
“information from client, social security/tax credit sources which enables an accurate, multiple benefit/tax credit check to be done manually or on computer and details kept on file.”
Given that, there should be no difficulties, as the evidence-gathering requirements are unlikely to change significantly from current practice.
Regulations 3(3) and 3(4) of the Common Financial Tool etc (Scotland) Regulations 2014 provide for discretion in the consideration of income and expenditure. Regulation 3(11) specifies that those using the common financial tool must have regard to guidance issued by the AIB on matters relating to
“the treatment of types of income and expenditure ... how income and expenditure are to be verified by the money adviser and the trustee; and ... the conduct of money advisers in carrying out their functions”.
Discretion is built in and the powers of suspension are subject to a right of review. The powers would of course never be exercised lightly. Such matters are extremely serious. Some of these matters are extremely technical, for which I apologise, but they have been considered in detail and dealt with in what I think is a satisfactory and fair fashion.
I take it that you are satisfied with the procedure that is in place in relation to gathering particular information. There are many routes for collecting the information. However, people’s chaotic lifestyles could create a problem with gathering that information. If the requirement is mandatory, that could put the money adviser in a difficult position. Are you satisfied that there is enough flexibility to enable someone to say that everything that could be done to get the information has been done, so they are satisfied?
09:30
Yes—I am so satisfied. Flexibility is built in and the issues are not new. Mr Robertson is correct to argue that it can be extremely difficult to obtain evidence of income and expenditure from those who might have chaotic lifestyles, for example. Those are practical difficulties. Money advisers who are involved in doing the work are well acquainted with the difficulties. That has always been a practical matter to deal with and people will continue to deal with it with the required flexibility.
I will follow that up. A question was raised about the implications of compulsory money advice for the free money advice sector and it was agreed that the Government would conduct research into that. What has been the outcome of that research?
Given the flexibility that is needed and the complications of collating information, how do you intend to control—that word is in inverted commas—the free money advice sector? What research has been done and what has been the outcome?
Will you clarify what research you mean?
I am talking about the impact of compulsory money advice on the free money advice sector.
I am advised that the Accountant in Bankruptcy, on behalf of the Scottish Government and in conjunction with members of the money advice sector, will develop a research framework that will allow the Scottish Government to monitor the new legislation’s impact. Once the findings of that research have been reviewed, the Scottish Government will consider whether any changes to the legislation or associated guidance are necessary.
You are saying that the research will be conducted. I can only assume that it has not been started and that, when the guidelines are issued in December, we might be missing that important factor.
Maybe I am misunderstanding the member’s question. Because we are six months from the implementation of the new provisions, by definition, there can be no analysis of how they are performing. We are working extremely hard to prepare the way for the regulations that are before the committee and for the proposed guidance, which will be shared with stakeholders as soon as possible—some of it will be shared later this month. However, the new provisions are not yet in place, so no assessment or research can be carried out on how they are operating. We will look at that carefully after the provisions have come into force and the system has come into effect.
I have every confidence that the Accountant in Bankruptcy will perform its functions in respect of the implementation of the BADAS bill, as it is known on the street, just as effectively and competently as it performs all its other functions. We in Scotland are extremely fortunate to have in the Accountant in Bankruptcy a highly motivated and effective group of public servants who do a terrific job in handling difficult and sensitive matters.
I acknowledge the broad support for the general direction of policy. You mentioned the ICAS submission. ICAS says that it has taken part in the working groups, whose establishment I welcome, but that the comments that have been made at the consultation events and through the working groups have not been acknowledged or properly addressed by the Scottish Government’s regulations. ICAS feels that the regulations will make the debt arrangement scheme a less attractive debt management solution, which seems to be counter to where we should be going with the generally agreed policy. ICAS recommends that the committee should consider recommending rejection of all the regulations.
I have also looked at the StepChange submission, which you mentioned. StepChange asks for
“a more realistic timetable for implementation”
as well as
“(a) proper consultation with the sector on the detailed guidance, and not just within the Working Group, and (b) amended regulations to be drafted.”
Would you consider that?
We think that it is important that the committee recommends approval of the regulations today, which is why I am here. If we do not agree to that today, we will not be able to get on with providing the benefits of the changes that we need to make.
On your general point about ICAS and, I think, other stakeholders, it is simply not the case that the AIB has ignored the working groups’ views. The AIB made a number of substantive changes to draft regulations on the basis of the working groups’ feedback. It listened and it responded. I have a list of eight specific examples, which I could share with the committee, but we should perhaps not take up time now with ultra-technical matters. The eight changes were adopted in response to criticisms that stakeholders put to the AIB, so the general charge is not valid.
The AIB has worked extremely hard to provide as much time as possible for training on and familiarisation with the changes before they are brought into effect. The regulations were laid in August so that the sector would have early sight of them. Regulations are not always consulted on in this way, and I hope that the early laying of the regulations will be taken as a sign of the good faith of everyone involved. The AIB has allowed more than seven months between the laying of the regulations and their coming into force.
In comparison, the DAS regulations in 2011 came into effect only four months after they were laid. The sector has almost twice as long to familiarise itself with the changes that we are considering today, many of which are technical and clerical and are to do with forms and so on, which are completed electronically in any event. Seven months seems to be a reasonable time to prepare, so I feel that perhaps the critics do protest too much.
ICAS’s point is that, if the regulations go through unaltered, debt arrangement might become a less attractive option, which cannot be what the Scottish Government wants. What detriment would there be in taking on board the practical suggestions that ICAS said would make a difference to the scheme and in laying amended regulations? Do you not agree that any changes should be made?
I have just consulted the officials. I will bring in Claire Orr, because I do not think that you have specified why ICAS thinks that DAS will not work effectively.
That is in the ICAS submission. ICAS sets out a number of concerns—
You have not set out the basis of ICAS’s argument—
ICAS has.
Perhaps Claire Orr will do so and explain why we do not accept the argument, to help us to get to the nub of the matter.
One of the issues is the five-year limit on the repayment of the debt, which we deem to be appropriate. We should bear it in mind that this is not an insolvency solution and that there is a requirement to reach agreement with creditors about what is reasonable, so we think that it is fair to set a limit on the time that is available for repayment. That is probably the main issue.
Another issue concerns all debts having to go into the debt payment programme. We are changing the approach for all debt arrangement schemes to ensure by including all debts that there is no unfair preference of any creditor; our caveat is that a debt is included only when it is constituted as being due.
Our approach provides sufficient flexibility. If there was an arrangement with suppliers, for example, to continue to supply stock, that would continue to be possible, because the debt would not have been called up as being due to be paid, so that arrangement could be excluded. By making such changes, we have addressed the main points that ICAS suggests make the scheme an unattractive option.
As a solution, the current debt arrangement scheme had a slow start. In the first couple of years of its operation, the numbers were not significant. If we look now at the growth of that solution, we see that there are more than 4,500 applications a year. It is growing year on year, which is what we might expect to happen with the new solution as well.
There is clearly disagreement between ICAS and ministers over the impact of the regulations. In its submission—which you must have received, minister—ICAS describes concerns about what it calls the
“Inappropriate regulation of money advisers”,
which relates to Mr Robertson’s earlier points. I welcome the fact that you will consult stakeholders after the regulations are passed—or otherwise. If the motions are agreed to today, do you have any intention of amending the regulations further in the light of that consultation?
We will keep matters closely under review. However, we believe that we have listened carefully to the points that stakeholders have made. I have a lot of detail about points made by ICAS and the responses thereto. We think that the regulations as proposed will do the job.
I remind Mr Baker that DAS, to which he has referred, is one of the most effective tools that there has been in debt management. The process of encouraging the payment of debt by ordinary individuals has been a great success story in Scotland. Our friends south of the border, peering over Hadrian’s wall, have looked with some envy at how well it has done. It was Mr Baker’s party, when it was in administration, that introduced DAS. We have developed and worked on it to improve it. About a decade of performance has seen it work extremely well.
There is no reason to suspect that the success of DAS will be impeded in any way by the regulations—quite the opposite. The common financial tool will introduce fairness and consistency, which have been lacking in the current system, with a plethora of options.
I take Mr Baker’s point seriously. We will continue to listen carefully to ICAS, which will continue to serve on the various working groups to which I have referred. As the convener will know from insolvency work in the past, the guidance deals with nitty-gritty, practical points and always has done. In introducing and adjusting the guidance, we will listen extremely carefully to the opinions of ICAS and R3 on behalf of insolvency practitioners in Scotland—and rightly so.
Good morning, minister. One thing that impressed the committee during its scrutiny of the Bankruptcy and Debt Advice (Scotland) Bill was the flexibility that is built into the common financial tool to take account of different circumstances. However, there is some merit in the concern expressed by StepChange and Citizens Advice Scotland about whether the tool has sufficient flexibility to allow them to continue to encourage their clients to build up small amounts of savings in order to provide resilience and enable clients to weather the financial storms that they might face, while maintaining payments and so on. Can you reassure us that the tool is sufficiently flexible to ensure good practice and allow StepChange and CAS to encourage their clients to save a small amount?
09:45
Yes—I can. Not for the first time, Mr MacKenzie gets to the heart of matters. Discretion and flexibility are built in. I looked carefully at the StepChange criticisms. I obtained a detailed response from officials and I obtained supplementary responses to a set of questions specifically to identify precisely where the flexibility and latitude are built in.
For the record, in relation to details of the evidence required, regulations 3(3) and 3(4) of the common financial tool regulations provide specifically for discretion to be exercised in the consideration of income and expenditure. Regulation 3(11) specifies that those who use the CFT
“must have regard to guidance issued by the Accountant in Bankruptcy”.
On the prescriptiveness of triggers, which StepChange and ICAS raised in relation to the effect of regulation 3(2), the response is that regulation 3(3) provides for expenditure that exceeds the trigger figures
“if satisfied that the expenditure is reasonable.”
Those are a few examples of specific provision that the regulations make for latitude, flexibility and reasonableness. It is correct that they do so, because it is impossible to have regulations that are entirely prescriptive and which allow no flexibility, given how many different situations occur in real life.
I am pleased that Mr MacKenzie has raised this important issue, and I am satisfied that sufficient discretion, latitude and flexibility are built into the regulations to allow money advisers to do their job properly and fairly. It is not us, the money advisers or ICAS that we are concerned about; our concern is that the people involved get treated fairly. The common financial tool’s aim is to ensure that people are required not to pay more than is fair or reasonable but to pay a sufficient sum towards their debts, according to their means.
I thank Mr MacKenzie for asking his question. I believe that the regulations provide the necessary flexibility.
Regulation 8 of the money advice and deduction from income regulations applies to deductions from debtors’ earnings. Is it the case that the regulations allow for deductions from earnings after two payments have been missed without the debtor having to be informed in writing? In its submission, Citizens Advice Scotland mentions the example of an unexpected family death, which could involve funeral costs. In such circumstances, for a debtor to end up facing earnings deductions without his or her knowledge does not seem characteristic of a system that we want to be seen as a financial health service.
Could you repeat that last bit, please?
If someone’s earnings are reduced through an unexpected deduction, of which they have not been informed in writing, that could put them in a very serious position. That seems to be at odds with the drive to create a financial health service.
I think that we debated what a reasonable system would be during the passage of the primary legislation, and I thought that the solution that we came up with was reasonable. As far as the specific provision to which you refer is concerned, I will ask Claire Orr to address the points that have been made.
We will be very happy to build into the guidance reinforcement of the safeguards that are in the legislation, which provide for such deductions to be made only after two payments have been missed.
We looked at what is happening with protected trust deeds, in relation to which the ability to deduct directly from earnings already exists. The practice is that that is happening at the outset with the debtor’s consent, which suggests that debtors find it helpful for that arrangement to be put in place, because it means that they no longer have to worry about making on-going arrangements for payment. However, we understand the point that CAS makes, and we will be very happy to ensure that the guidance includes appropriate procedures for such situations.
Thank you.
We will write to the committee on that, convener. It is a very fair point, and I am concerned to ensure that we get things absolutely correct. We will do and, to ensure that that is the case, we will write to the committee after we have made progress on the guidance.
I understand from what you have said this morning, minister, that you will take on board some of the remaining concerns about the guidance, as will be reflected through a continuing relationship with the various working groups, and that that will eventually be reflected in the guidance once you have done that. Matters such as the flexibility of the financial tool, to which Mr MacKenzie referred, will be implicit in the guidance, will they?
Yes, I can give you that assurance. The general response is that a draft of the guidance document relating to the common financial tool will be shared with stakeholders this month.
I was looking for the precise document setting out StepChange’s concerns, which I think alluded to the organisation getting sight of the document in December, but I queried that, because I thought that a little more notice would be required. I was advised that a draft of the guidance document will be shared with the common financial tool working group, of which StepChange is a member, this month. That will allow time for discussion.
Given my interest in ensuring that we get the guidance correct, I will personally take a close interest in the matter. If members so wish, I am happy to undertake to report back on the issues that members have raised in the course of today’s proceedings, which we take very seriously.
There will be a lot of time for joint working in relation to the common financial tool, because it is absolutely essential that the guidance is correct.
Thank you.
First, I apologise for my coughing interludes.
This is perhaps a question not for you, minister, but for one of your officials. We were advised in our briefing—in fact, this relates to an earlier conversation about the proposed legislation—that the electronic application would reduce the administrative burden, because the user would visit only pages that were appropriate to the individual customer, based on whatever information was provided.
The implication of our briefing is that there have not been sufficient time and resources for training before implementation. Is that the case? If so, how do we intend to cover the whole need for training as a catch-up?
The AIB has worked pretty hard to provide as much time as possible for training and familiarisation. I have alluded to the fact that the regulations were laid in August in order to allow the sector early sight of them. I have also alluded to the fact that it will be seven months before they come into force.
The AIB is developing a training programme, which will include awareness sessions, to be delivered at various locations throughout Scotland. The AIB will upload training videos and instructions on its website, and it is building a web-based training system, which will allow users to log on from their offices or homes to try it out.
The AIB will be training business champions from among its own staff, who will be able to visit individual offices to conduct training sessions if required. Therefore, the AIB is fairly well advanced in that regard.
The concern that you express is a perfectly legitimate one, but I am satisfied that the AIB, in accordance with its customary practice, is focusing clearly and well on the necessity of providing the tools that are required for practitioners to continue to do their job professionally.
Thank you.
We had a report from the Delegated Powers and Law Reform Committee in relation to two of the negative instruments before us today—the Bankruptcy (Scotland) Regulations 2014 (SSI 2014/225) and the Bankruptcy Fees (Scotland) Regulations 2014 (SSI 2014/227). It drew to our attention a number of drafting errors in both those instruments and failures to follow normal drafting practice. Minister, do you intend to resolve those errors by bringing forward amended instruments in due course?
I am happy to do as the Delegated Powers and Law Reform Committee asked on Tuesday and to make the further amendments to the regulations that the committee asked for last week. I stress that that committee did not consider the points to be defective drafting, but it noted that the changes would provide better clarity and consistency. No adverse consequences would have arisen from any of those points, but the necessary amendments to deal with them will be brought forward.
If there are no other points, we can move on to item 4—the formal debate on the affirmative instruments before us. I invite the minister to move the motions on the four instruments formally.
Motions moved,
S4M-11068—That the Economy, Energy and Tourism Committee recommends that the Bankruptcy and Debt Advice (Scotland) Act 2014 (Consequential Provisions) Order 2014 [draft] be approved.
S4M-11069—That the Economy, Energy and Tourism Committee recommends that the Bankruptcy (Money Advice and Deduction from Income etc) (Scotland) Regulations 2014 [draft] be approved.
S4M-11070—That the Economy, Energy and Tourism Committee recommends that the Common Financial Tool etc (Scotland) Regulations 2014 [draft] be approved.
S4M-11071—That the Economy, Energy and Tourism Committee recommends that the Debt Arrangement Scheme (Scotland) Amendment Regulations 2014 [draft] be approved.—[Fergus Ewing.]
Do any members wish to speak on the motions?
On reading the written submissions from the various interested parties, I was struck by the fact that a number of them did not deal with the instruments that are before us today but revisited a number of issues that were dealt with in our scrutiny of the bill. Although it was good to be reminded of some of that scrutiny, a lot of what the submissions were concerned about is outwith the scope of what we are talking about today.
It is worth the committee reminding ourselves that our feelings about the BADAS bill were benign: we felt that it was a good bill and was well disposed to debtors and to creditors. The AIB has also shown itself to be well disposed to debtors and to creditors. I place on record my thanks to the AIB, because in dealing with some constituents’ problems I have found the AIB to be refreshingly helpful and predisposed to helping debtors in difficult situations and exploring innovative ways of doing that. I am assured that the AIB is well disposed, which is not something that we get a proper sense of in some of the written submissions that we have received.
I am particularly struck by the fact that the written submission from ICAS seems to reflect a situation in which people are looking into the shadows and seeing bogeymen and monsters that may not be there. When I read the instruments, I do not see any shadows. I might see one or two grey areas, but those grey areas will be resolved when the guidance is available. I am delighted that the minister has told us this morning that the guidance will be available shortly, and I hope that that will put to rest some of the fears that we have heard from some respondents.
I am pleased by the minister’s reassurances this morning. There is an urgency about the matter. We need to get on and implement the regulations sooner rather than later, not least because the UK Government seems to have moved slowly on related matters—in dealing with payday loans, for example. Although the UK Government is finally moving in the right direction, it has taken longer than any of us would have hoped to do that, so there is all the more reason for the Scottish Government to get on and implement the regulations as soon as possible. I urge all members to vote in favour of the motions. Let us ease the burden on debtors and provide a better service for creditors.
I again acknowledge the broad support for the overall policy direction on the important issue of helping people with serious financial issues.
The minister was right to praise the debt arrangement scheme. That is why it is important that we take seriously the views of ICAS, which, after all, has great expertise in the area and a long history of working with the Scottish Government on it. ICAS says that it fears that the proposals may make the debt arrangement scheme less attractive.
10:00
Does Richard Baker welcome, as I do, the proposed extension of the debt arrangement scheme to include small businesses and sole traders? Does he think that that is a step in the right direction?
The point is that ICAS has highlighted in its submission a number of concerns about the regulations, so the committee should take them seriously. A number of the issues that ICAS has raised have also been raised by Citizens Advice Scotland and StepChange Debt Charity. They must be listened to.
I welcome the fact that the minister said that he will engage in further consultation in the event that the regulations are approved. I know that he will do that, and I hope that it is done seriously and that people are not only consulted but listened to and that the concerns that have been expressed are seriously addressed.
However, my fundamental point—this is where I depart from Mr MacKenzie—is that I fail to see what would have been lost by withdrawing the regulations and going into further consultation and dialogue to address the concerns materially so that we do not have concerns raised in submissions to the committee at this point in the process. That would be a better way for the Scottish Government to proceed.
I am reassured by the minister’s statement on guidance and his assurance that we will continue to listen to and take on board submissions from all parties. I believe that that has been done throughout the process. Certainly, when the committee took evidence, we looked at the issues thoroughly. Therefore, I am content that the issues that Mr Baker raises can be dealt with through the guidance process. I am content with the reassurance that we have from the minister.
For my part, I have some sympathy with Mr Baker’s points. The submissions contain strong expressions of concern about the lack of consultation in the preparation of the instruments and the way in which they have been brought forward. The minister should reflect on that.
I am grateful for members’ contributions to the debate. Working together with the committee to scrutinise the legislation is an essential part of bringing it forward and the best way to do it.
I reiterate that we will continue to consult all the stakeholders in an extremely detailed fashion. We place on record the fact that we respect and value the work that they all do. We have changed the regulations in a number of ways—I will write to the committee to demonstrate that we have done so on a number of technical matters. We have consulted the stakeholders on the draft regulations and through three working groups. We will produce the guidance in draft, after which the stakeholders will have seven months to consider it. To me, that is the way that we should proceed, and it seems a reasonable performance in relation to fairly technical matters.
I turn to the wider issues that members have raised. I am very grateful for Mr MacKenzie’s remarks, and I am sure that Rosemary Winter-Scott will be pleased to hear them. I will make sure that she and her staff, who do an excellent job, are made aware of Mr MacKenzie’s recognition of the work that they do.
I hope that the wider sector will also acknowledge the good work that the AIB does. It is time to move forward and recognise that, as Mr MacKenzie rightly says, those public servants are doing a difficult job in highly sensitive cases in an effective way. They are also effective in relation to the financial operation of the AIB, which is an example of sound and effective public administration.
The objections have been overegged slightly by ICAS, and to some extent we are revisiting arguments that were fully debated and discussed during the passage of the legislation. I do not think that that is why we are here today; I do not think that it serves any purpose. Be that as it may, we will continue to listen carefully to what ICAS says and to respond as appropriate.
Over the referendum period, I had the opportunity to have fairly detailed meetings with citizens advice bureaux, and I am hugely impressed with their work to help the people who have the least in society. The problems in relation to benefits are appalling, and the delays in administering benefits, particularly applications for benefits related to disability—delays that are not a result of any failure on the part of public officials in Scotland—are utterly scandalous and causative of very real hardship.
Therefore, these matters are not just words on a page or technical matters; they are extremely important matters for people who face enormous financial hardship, the like of which none of us in this room, I suspect, are familiar with. I am seriously concerned about the administration of benefits payments in Scotland—seriously concerned. It is frankly shambolic and the UK Government must take steps to deal with the situation. I make that point because it is directly related to the issue of debt, and it should be mentioned.
In relation to the purpose of the regulations and the 2014 act, I point out that we want to have a financial health service in Scotland. That is why we are getting on with this work. We want a financial health service so that young people in Scotland can increasingly be more effectively educated about how to manage their money. Then they will not fall prey to the sharks involved in some of the excessive interest that is charged on money-lending activities and payday loans, which for far too long were left almost entirely unregulated.
That is despite the fact that the very first members’ business debate that I responded to in this job in 2011 was on payday loans, when Margaret Burgess brought her enormous experience to bear on the topic. It took three years for the obvious steps to be taken, a delay which has seriously exacerbated the problems that money advisers and citizens advice bureaux face. They deal at the sharp end with hugely difficult cases. Many human tragedies underlie all the statistics, so I am very pleased that we are doing something good today. I hope that members will support the regulations.
Thank you, minister.
The question is, that motion S4M-11068, in the name of Fergus Ewing, be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Biagi, Marco (Edinburgh Central) (SNP)
Brodie, Chic (South Scotland) (SNP)
Johnstone, Alison (Lothian) (Green)
MacKenzie, Mike (Highlands and Islands) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Robertson, Dennis (Aberdeenshire West) (SNP)
Abstentions
Baker, Richard (North East Scotland) Lab
Fraser, Murdo (Mid Scotland and Fife) (Con)
The result of the division is: For 6, Against 0, Abstentions 2.
Motion agreed to,
That the Economy, Energy and Tourism Committee recommends that the Bankruptcy and Debt Advice (Scotland) Act 2014 (Consequential Provisions) Order 2014 [draft] be approved.
The second question is, that motion S4M-11069, in the name of Fergus Ewing, be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Biagi, Marco (Edinburgh Central) (SNP)
Brodie, Chic (South Scotland) (SNP)
Johnstone, Alison (Lothian) (Green)
MacKenzie, Mike (Highlands and Islands) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Robertson, Dennis (Aberdeenshire West) (SNP)
Abstentions
Baker, Richard (North East Scotland) Lab
Fraser, Murdo (Mid Scotland and Fife) (Con)
The result of the division is: For 6, Against 0, Abstentions 2.
Motion agreed to,
That the Economy, Energy and Tourism Committee recommends that the Bankruptcy (Money Advice and Deduction from Income etc) (Scotland) Regulations 2014 [draft] be approved.
The third question is, that motion S4M-11070, in the name of Fergus Ewing, be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Biagi, Marco (Edinburgh Central) (SNP)
Brodie, Chic (South Scotland) (SNP)
Johnstone, Alison (Lothian) (Green)
MacKenzie, Mike (Highlands and Islands) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Robertson, Dennis (Aberdeenshire West) (SNP)
Abstentions
Baker, Richard (North East Scotland) Lab
Fraser, Murdo (Mid Scotland and Fife) (Con)
The result of the division is: For 6, Against 0, Abstentions 2.
Motion agreed to,
That the Economy, Energy and Tourism Committee recommends that the Common Financial Tool etc (Scotland) Regulations 2014 [draft] be approved.
The fourth question is, that motion S4M-11071, in the name of Fergus Ewing, be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Biagi, Marco (Edinburgh Central) (SNP)
Brodie, Chic (South Scotland) (SNP)
Johnstone, Alison (Lothian) (Green)
MacKenzie, Mike (Highlands and Islands) (SNP)
McAlpine, Joan (South Scotland) (SNP)
Robertson, Dennis (Aberdeenshire West) (SNP)
Abstentions
Baker, Richard (North East Scotland) Lab
Fraser, Murdo (Mid Scotland and Fife) (Con)
The result of the division is: For 6, Against 0, Abstentions 2.
Motion agreed to,
That the Economy, Energy and Tourism Committee recommends that the Debt Arrangement Scheme (Scotland) Amendment Regulations 2014 [draft] be approved.
Is the committee content that the convener and clerk will produce a short factual report of the committee’s decisions and arrange to have it published?
Members indicated agreement.
Bankruptcy (Scotland) Regulations 2014 (SSI 2014/225)
Bankruptcy (Applications and Decisions) (Scotland) Regulations 2014 (SSI 2014/226)
Bankruptcy Fees (Scotland) Regulations 2014 (SSI 2014/227)
We move to item 5, which is consideration of three negative instruments.
The minister previously indicated that action will be taken on the drafting issues that were identified by the Delegated Powers and Law Reform Committee in relation to two of the instruments. As members do not have any substantive issues that they want to raise other than that, are members content simply to note the instruments?
Members indicated agreement.
That concludes item 5. I thank the minister and his officials for their attendance. I suspend the meeting.
10:10 Meeting suspended.