Abolition of Poindings and Warrant Sales Bill
We have been dealing with the bill on the abolition of poindings and warrant sales for some time. Everyone is aware that we have a strict deadline, and I am keen that we should keep to it.
There will be two stages. Today we will consider the general principles of our submission and next week we will consider a detailed report, which Martin Verity will draft following our discussion today.
Members have in front of them a paper that Martin has already drafted. It is based on our consideration of the bill so far. Members will have an opportunity to speak, but first I will hand over to Martin, who will talk about the paper and what is expected of us now.
Martin Verity (Committee Clerk):
The committee has now heard all the oral evidence on the bill that it wished to hear. Members will recall that we are at stage 1 consideration and that this committee will feed its views into the Justice and Home Affairs Committee, which will report formally to the Parliament.
Members received copies of all the written evidence that was originally submitted to the Justice and Home Affairs Committee clerk, and identified an number of organisations from which they wanted to take oral evidence. This paper summarises the evidence that members have received so far. It does not provide new information. Anything that has been missed out can be found in the Official Report or in the written evidence.
Because the Official Report of last week's evidence was not available while I was writing this paper, I have not included a summary of the oral evidence that was given by the Department of Social Security and Citizens Advice Scotland. As the Official Report of last week's meeting is now available, I am happy to produce a summary of that oral evidence, if the committee would like me to do so.
Today, I would like the committee to give me a steer as to what it wishes to be in its report to the Justice and Home Affairs Committee. That report will take the form of a letter from me to the clerk of that committee, informing him of this committee's views. I plan to present a draft final report for your approval at next week's meeting, as the deadline for our submission to the Justice and Home Affairs Committee is the end of January.
We will have a general discussion before we move on to specific points that members wish to include in the report.
I do not want to make any detailed points now, but I may want to at next week's meeting. It might be helpful if members were allowed to pass any detailed suggestions to Martin Verity, whose report, I notice, stays out of the politics.
I noticed that.
It is very factual about the evidence that was submitted to us. Of course, the whole point of this committee's consideration is to take a view on the evidence—I am sure that we all have strong opinions. Does Martin want to feed our political views into the draft report, or should we suggest amendments to the draft report at next week's meeting?
I understand that at this stage we should agree our position on the principle of the bill—whether we are in favour or against, or whether we favour a specific amendment.
Martin has been helpful in summarising the evidence, but the committee must take the process further and take a view—that is what he means by a steer. Certainly, we have an opportunity to recommend detailed points
In principle, I am in favour of the bill.
My interpretation of the evidence is that it is sympathetic to the bill. From reading the Official Report and hearing the views of members, I think that it is fair to conclude that we are sympathetic to the passage of this bill, particularly from a social inclusion perspective.
I, too, am in favour of the bill in principle.
Although some things that we did not know emerged in evidence, much of what was said did not come as a big surprise to many of us. However, a recurring point, particularly in the evidence of people who are involved in money advice and debt counselling agencies, was that the vast majority of cases in which warrant sales are threatened concern the recovery of council tax. We have to ensure that local authorities can collect their taxes. West Dunbartonshire Council seems to have thought of a way of doing that, which we should consider further.
People who do not pay for the first half of the year discover that poinding and warrant sale is an automatic part of the procedure—they are not given time to pay. This committee should recommend—to the Finance Committee or the Local Government Committee—that the way in which council tax bills are issued should be reviewed. The procedure should take account of people's ability to pay and should not require cases to be handed over straight away to sheriff officers. I would like more information about that problem so that it can be resolved.
But that does not stop you supporting the bill in principle at this stage?
No. Warrant sales should not be retained just so that we can get over that hurdle, which is not insurmountable. Executive departments or other committees of the Parliament should examine that issue.
The Local Government Committee is considering the bill from that angle.
The Local Government Committee raised that point when it took evidence from Alan Adams of Glasgow City Council protective services. He was strongly in favour of the abolition of poindings and warrant sales, as a matter of urgency. There is much evidence to suggest that there are ways of dealing with the problem that Cathie Craigie mentions without having recourse to the inequities of the poinding and warrant sale system.
Obviously, it will be no surprise to the convener that I am 100 per cent in support of the bill. The balance of the evidence that we have received has been overwhelmingly in favour of abolition. Those who argued against abolition, such as the Law Society of Scotland and the DSS—two professional, well-resourced organisations—presented the poorest evidence by far; their evidence was based on notions and subjective judgments, whereas the evidence of voluntary organisations was more substantive. Anyone with an open mind who listened to the evidence objectively would reach the conclusion that the passage of this bill should be recommended.
In the longer term—I do not know which committee should take the lead on this, and it should not prejudice the swift passage of the bill—a number of other issues that cause difficulties should be considered. For example, I was not as aware as I am now about summary warrants. Last week, the DSS official read out the letter that is sent to 25,000 people in Scotland, which says that people have 14 days to pay or else. The implication of the letter did not strike that guy. The bulk of those people have no money and live from hand to mouth from Tuesday to Friday. It is unrealistic and inhumane to tell them to pay off hundreds—sometimes thousands—of pounds of debt in 14 days. There are justice, local government and social inclusion angles to such issues, which we should address in future.
I was disappointed that the DSS witnesses did not have facts and figures with them. They should have expected that we would ask for such things. When we invite people to give evidence, we should make it clear that we expect them to be prepared, that we are bound to follow a certain line of questioning and that we will ask for facts and figures. Perhaps Martin Verity and Rodger Evans could draft a general letter asking witnesses to come prepared—the detail of letters will vary according to the nature of the evidence that we take. We should expect people at least to count up the figures before they come to our meeting. The DSS witnesses should have known the answers to a couple of questions that were asked by Bill Aitken and Robert Brown.
Like Alex Neil, I want to highlight a couple of things that have arisen from the evidence that we have taken. I support the bill; all the evidence that we have been given suggests that the committee should support its swift passage through the Parliament.
In particular, I would like the committee to do some work on credit and the ability of people from a less well-off background and from deprived areas to get access to credit. In our inquiry, we have received evidence that poindings and warrant sales force people to go to moneylenders, because they have no other means to access money quickly. It is shameful that people are still being forced to approach moneylenders. I would like us to examine credit unions. Some local authorities are working well, with income maximisation programmes, which helps them to ensure that people are better able to cover their outgoings. We could discuss those possibilities when we consider Robert Brown's proposed work paper.
I am distinctly more conditional in my support for the bill than some other members are, as I think that there is some unreality about certain aspects of it. In our report, I think we should recognise that the legal system is coercive; it is designed to make decisions and to give people remedies as appropriate, with due regard to the balance of parties. That has been recognised in some of the evidence that we have received.
Having said that, I think that we should consider the evidence in the light of the detailed written report from the Scottish Law Commission. In its summary of conclusions, it lays down a good analysis of some of the issues that we have to consider. I recognise the thrust of the committee's views but I think that this subject should ideally form part of a broader review of civil diligence, regardless of the how the bill progresses.
I should again declare an interest—I am a member of the Law Society of Scotland.
My view has significantly shifted as a result of the evidence that I have heard. I was disappointed with the professional evidence, and with that of the Department of Social Security in particular. It was astonishing that its representatives could not give us the figures that one would have thought would form the basis for their representations.
The evidence highlighted a number of distinctions that we should make. Cases involving commercial credit and arrangements between companies are different from domestic cases. We are essentially dealing with household matters. There is also a distinction between private enforcement, which is a less significant remedy than it once was, and the enforcement methods used by public bodies, including for the community charge and council tax. We should be conscious of the implications of what is proposed on councils' ability to recover money. That point leads on to other pertinent issues, including the availability of money advice and of citizens advice bureaux.
On Karen Whitefield's point on credit, we suggested at one point that, as part of our future work, we could investigate the Prudential or another organisation that is involved at the beginning of the credit process. An understanding of credit and of how people get into debt is relevant on a broader level.
Whatever the law and procedures, it seems that, in many instances, the people affected do not know about them. That applies to the provision to challenge applications for warrants and so on. It seems that people have not been taking advantage of such measures or have not been aware that they could use them—perhaps they do not have the back-up facilities that would enable them to take advantage of them.
We should also be conscious of something that a number of members have mentioned and that was in the Law Commission's report—all the other countries about which we have found out have a system analogous to poinding and warrant sale. I believe that we should concentrate primarily on how people get into debt and on the distinction between those who can't pay and those who won't pay.
The more evenly balanced issue of enforcing aliment was also raised. In cases where, for example, a wife is trying to secure aliment from a husband, poinding and warrant sale might be one method of proceeding.
The residual debt from the days of the poll tax dispute is also a problem; it puts a heavy burden on the effectiveness of any legal, debt or poverty-avoidance system. I am not clear in my own mind about what the proper solution should be, but that problem must be tackled. We have to establish whether that debt is realistically recoverable. If it is not, it should be removed from the system, because it has distorted the whole issue, with implications that we have to take into account.
I hope that some of those observations can be considered in our approach to the final report. Some of the points are detailed, but they are important. Unqualified support for the bill, without taking those other angles into account, would be unbalanced.
It might be useful, Robert, if you could distil those comments into a number of points that you want other members to examine.
I would be happy to produce something in writing. Members should, however, look at the Law Commission's report. I think that it is a balanced and good analysis, regardless of whether members agree with it.
Before I call Lloyd Quinan to speak, and before I let members respond to what you have said, Robert, I should mention that yesterday I received an e-mail from the Institute of Credit Management. Did anyone else get it?
Yes.
I have not received any other submission from the institute before, and it seems that the clerk has not either. The institute is against the bill. I will circulate the e-mail to members for their attention.
To continue from what Karen Whitefield and Robert Brown have said, I believe that, by supporting the bill, we will come under pressure to examine other aspects of debt recovery and debt management. I think that, as an on-going part of our social inclusion remit, we should specifically consider debt management. It falls to us to consider that rather than debt recovery, which is a matter for the Local Government Committee, although we should continue to exchange evidence on it, as we have done in our consideration of this bill.
Taking into account the income maximisation programmes that are being carried out, the approach of West Dunbartonshire Council to the recovery of council tax and rent arrears, and Karen's commitment to credit unions, I think that, after we have submitted our report on the bill, we need to begin an investigation to prepare ourselves for what the Institute of Credit Management and other anti-bill organisations will want—they will, I imagine, want legislation to fill what they perceive as a gap. However, the responsibility lies with us to consider debt management and, specifically, access to credit and maximisation of income—I think that we come down on the side of the people who are, in effect, socially excluded.
That is a good specific recommendation, to which we could refer in our next discussion on social inclusion.
I always get very nervous when people talk about the swift passage of a bill. Any bill should go through the normal procedures, particularly a bill such as this, to which I am not unsympathetic, although we should remember that it abolishes something without suggesting alternatives.
I tend to agree with other members about the quality of the evidence that we received. I missed half of one meeting, but the professional bodies' evidence was disappointing. As the Law Society of Scotland and the DSS laid such emphasis on poindings and warrant sales, it was disappointing that they did not discuss possible alternatives—perhaps the DSS felt that its ability to do so was restricted. I was also disappointed that Citizens Advice Scotland, an organisation that I strongly support, had not in its written and oral evidence really thought about alternatives. Although it submitted a couple of paragraphs on the subject, when we pressed the witnesses, we found that they did not have any steer on what the alternatives might be.
I agree with many of Robert Brown's comments, even though we have not actually discussed the issue. [Laughter.] There you are—Liberal Democrat telepathy. Are not members of other parties envious of that?
Robert made a valid point about private enforcement, which is a diminishing concern. However, we heard evidence about the knock-on effect on self-employed small builders or plumbers if their bills are not paid. Although that might be a small part of the issue, we cannot completely ignore it.
Council tax is clearly the biggest area affected by this issue. We should bear in mind the fact that, if many people do not pay their council tax, that affects other people's council tax in an area. This is a question of fairness, and the distinction between can't pay and won't pay is important. Karen Whitefield, Lloyd Quinan and Robert Brown are right to say that we have to examine the whole area of debt management and gaps in provision by such bodies as the CAS. Advice is not widely available; the DSS clearly does not regard it as part of its responsibility, but goes hell for leather to recover what is owed to it, irrespective of other debts that are held by the people being pursued.
My sympathy towards the bill is qualified by my reservations about simply abolishing these measures. Local authorities or others will find it difficult to know where to go when pursuing a debt.
Committee members seem unanimous in their view that poindings and warrant sales are distasteful, to say the least, and I do not think that any of us are particularly happy with the situation. However, debts have to be recovered, because sometimes the creditor can face real hardship—Robert Brown gave a very good example of the wife pursuing aliment from her estranged husband.
The problem lies mostly with the local authorities and the DSS and it was disappointing that, last week, the DSS could not provide figures and information that the committee obviously required in order to make a wider determination on the matter. Has there been no response to our correspondence?
We are expecting a letter today.
There has to be a close association of ideas between people who hold the can't-pay, won't-pay philosophy and people who are in genuine need. I find it difficult to accept the assertion made by one of the voluntary organisations that there would be no knock-on effect for the ability of people from deprived communities to get credit. Although an alternative should be in place before the bill is passed, poindings and warrant sales are anachronistic and I am well aware of the hardship that they cause, particularly in Glasgow's peripheral schemes, where people are driven into the hands of illegal moneylenders and the evils of that system.
Yesterday, I had the opportunity to sit through the Local Government Committee evidence session with the Scottish Law Commission and the Federation of Small Businesses. It is interesting that, like Bill Aitken, the FSB described poindings and warrant sales as "distasteful". The FSB said that many of its members were subject to those procedures on account of the Inland Revenue, which uses poindings and warrant sales at the drop of a hat even though alternatives are available. The FSB supports the principle behind the bill partly because it feels that poindings and warrant sales are being misused by bodies such as the Inland Revenue to drive small businesses to the wall.
The Scottish Law Commission has submitted a 194-page tome, to which Robert Brown referred. That report has been used as the backbone of evidence against the bill. All I would say is that, in those 194 pages, there is not one case study of a poinding or warrant sale. When I asked the Scottish Law Commission representatives whether any of them had attended poindings or warrant sales, one of them said no and the other said that he had not attended them after 1985. The Scottish Law Commission's submission lacked the experience of the humiliation and indignity of poindings and warrant sales that is detailed in other evidence and, as a result, I disagreed with 99.9 per cent of its evidence. However, one point on which we agreed was that there was no possibility either of separating private debt and credit debt or of creating an artificial divide between a business debt and a personal debt. Gil Paterson of the SNP said that he was probably a fine example of that, as his business is in his name and separation would therefore be impossible. It is interesting that the Scottish Law Commission has considered that aspect and agrees that such separation would be extremely difficult.
What I found illuminating in the Local Government Committee's discussion was Johann Lamont's summary of the position that members had reached, which was that most people felt that poindings and warrant sales should go. Opinion was divided on whether an alternative should be found before poindings and warrant sales were abolished or whether they should be abolished to force people to find an alternative. I am glad that the committee decided that abolishing these "spurs"—a word that sheriff officers somewhat ungratefully used to describe the point of these measures—would be a spur to change. If poindings and warrant sales were no longer available, the idea of finding an alternative would have to become a reality—the debt recovery agencies and legal minds would be forced to find that alternative if they continued to tell us that we needed to put something in place.
I was very pleased that the Local Government Committee recommended support for the bill as a spur to change and did not want to wait for change before it gave its support. I hope that, given the evidence that this committee has heard, it will conclude that the bill is a start, not the be-all and end-all. I found Loretta Gaffney's evidence stunning. She said that we had to take this step now and then consider other changes, because that would tell the very poor and excluded people in our society that we had not forgotten them and that we were seeking a more humane form of debt recovery and debt management. I hope that this committee will adopt the same view.
I will take John McAllion and Karen Whitefield next, then we should move to some conclusions.
The report should reflect the question of the effectiveness of poindings and warrant sales. There is a fundamental contradiction on the part of those who argue that, on the one hand, the Debtors (Scotland) Act 1987 protects individuals and that there is no real hardship for those who are subjected to those measures and, on the other, that the fear of poindings and warrant sales makes people pay up.
There is fear of those sales because of the hardship that results from them. Robert Brown is absolutely right to say that the system is coercive. The question is whether that coercion falls within the moral bounds of the kind of society that we want Scotland to be—my judgment would be that it does not. The evidence given to the committee has suggested that the use of poinding and warrant sales is not morally acceptable.
There are other restraints. Nowhere except Scotland can people forcibly enter the homes of others—even when their children are present—and subject them to the humiliation of a poinding. We must remove such blots from the Scottish legal system.
I am not concerned by the swift passage of the bill—the conveners liaison group last night discussed how slow the progress of the bill had been. There is a principle at stake—this is the first member's bill that has come before the Parliament and its progress has been painfully slow. We are not even at the end of stage 1 consideration and we have been at it for months. At stage 2 we will go through the details line by line. The argument that we should wait until some other system is in place before we get rid of the sales is the argument of those who do not want change.
As the Parliament matures, there will be more and more Executive business and less and less time for dealing with issues that are not central to the economy. This is the Parliament's chance to send a signal that it listens to those who are socially excluded. If the committee cannot listen to them, no other committee will be able to. We have a moral responsibility to support the bill and its progress to the statute book.
I would like to make a point about the evidence that was given by the DSS. I served for 11 or 12 years at Westminster and the DSS would never have gone to a committee in Westminster with only two sides of paper as evidence. Our report should reflect the fact that the committee is insulted by the way in which the DSS has treated the committee and that we expect better from Westminster departments in future.
We should include that in our report, but we should also make it a separate issue and flag it up later.
I agree with much of what John said. At the start of this process, I was not convinced that the warrant sales bill was the way forward—I was concerned about the implications if we did not have an alternative to warrant sales in place. There has been overwhelming evidence that there is a pressing need for abolition of poinding and warrant sales.
Those who can pay but will not were mentioned in the evidence from the DSS and the Child Support Agency. The reality is that the vast majority of those people will not pay because they are not affected by the fear of poinding and warrant sales. It is the poor who are worst affected by poinding and warrant sales. I worked for a Westminster MP for seven years and my experience is that the CSA does not do its job in relation to parents who can pay but refuse to do so. The people who are most adversely affected are those who are not receiving child maintenance from the other parent. That other parent—who does not have care of the children—might be more than able afford to pay the maintenance. Those people do not fear poinding and warrant sales because they can afford to replace goods that are poinded. We must be careful about using the CSA's evidence as an excuse for delaying the passage of the bill.
We are hearing clear views, but I would like guidance from members who wish to qualify what has been said. It seems that the committee is in favour of the bill in principle. We will ask Martin Verity to draft a report on the basis of today's discussion.
John McAllion mentioned stage 2 of consideration of the bill; we will have time to go through the bill again. It will go before the Justice and Home Affairs Committee, so any qualifying remarks that members make will be examined.
Issues relating to the bill can also be raised in the chamber. Any member's bill—particularly a bill of abolition—should be subject to sufficient scrutiny. I put two private members' bills through the House of Commons and they were not subjected to sufficient scrutiny. I take John McAllion's point about the unfortunate delays that have slowed passage of the bill, but it should not be rushed now—I would oppose that in the chamber.
I am sure that you will keep an eye on it.
I do not mean that I would oppose the bill—I would oppose it being rushed through.
Should we release to the press the fact that the committee agrees unanimously to support the bill in principle?
Members' agreement is linked to certain conditions.
We will not say that we are unanimous, but we will say that we all agree in principle to support the bill and that the committee will examine detailed comments from members next week. We will keep an eye on comments as they arrive.
When we examine our future work programme in February or March, we should try to build in a review of the kind of issues that Karen Whitefield raised in relation to access to credit for low-income families, debt management and so on. We must establish exactly what the committee needs to examine, but we should take the lead on the issues that I have just mentioned.
Yes—absolutely.
My second point is about drafting, which is important. Martin Verity's report was very good, but paragraph 11 states:
"The Diligence Committee was opposed to the Bill, which was of a piece meal and ill conceived nature."
It should say that that committee was opposed to the bill, "which it regards as being piecemeal and ill conceived." Alternatively, the words "piecemeal and ill conceived" should be included in quotation marks. When people read such documents, they must be able to distinguish between this committee's views and the views of other committees—care must be taken in drafting to ensure that.
I know that the clerks' work load is onerous. I represented that view to the conveners meeting last night and mentioned that this committee must share clerks with other committees. You would have been proud of me, Martin, but I would appreciate it if you could get the next report to members as quickly as possible, so that we are prepared for next week's meeting. There might be different points of view to which we must be sensitive, so we will set aside plenty of time for that.
Could Martin also circulate the DSS response?
Yes.
I would also like some clarification on Keith Raffan's comments, which were—as usual—worth while. He referred, however, to the CAS. Did he mean to refer to Citizens Advice Scotland or to the CSA, or the Child Support Agency?
I meant to refer to Citizens Advice Scotland.
Might I be assured that the report will include the qualifying comments? There is agreement that many of the issues that have been mentioned are important and must be taken forward by this or other committees.
We will put Lloyd Quinan's points about debt management on our next agenda. We will discuss next week the points that Robert made with specific reference to the bill. There might be different points of view about those matters, and those must be included in our report.
It is important that our concerns and the constructive views—even minority views—of others are expressed.
We will try next week to find the form of words that will allow that. Martin will e-mail copies of Robert Brown's draft report to the committee so that we are prepared for the discussion.
Thank you for your indulgence.
Thank you.