Meeting of the Parliament

Meeting date: Thursday, May 4, 2023

Official Report 986KB pdf

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Moveable Transactions (Scotland) Bill

The next item of business is a debate on motion S6M-08810, in the name of Tom Arthur, on the Moveable Transactions (Scotland) Bill. I invite any members wishing to participate in the debate to press their request-to-speak buttons, and I invite members who are leaving the chamber to do so quickly and quietly.

16:10  

I begin by thanking the members of the Delegated Powers and Law Reform Committee for their helpful and careful consideration of the bill. I have very much welcomed the committee’s thorough scrutiny of the bill. It is clear that members have appreciated the importance of getting things right, but they have also appreciated that the process is not always straightforward.

I also thank the committee clerks for all their hard work, and the stakeholders who contributed views and opinions as part of the parliamentary scrutiny of the bill.

The bill is a Scottish Law Commission bill, and I therefore also thank the commission for the considerable work that went into this law reform project. In particular, I thank Professor Andrew Steven and the members of the Scottish Law Commission’s working group on the project. Even though Professor Steven is no longer a commissioner, he and his colleagues have given very generously of their time, insight and expertise throughout the process, which has been much appreciated.

I also put on record my sincere thanks to the Scottish Government officials in the bill team for their sterling work on the bill.

The Scottish Government has also had some very useful engagement with stakeholders across a range of perspectives. I met the Federation of Small Businesses and twice met representatives of the consumer advice and money advice sectors. Their practical experience was important in helping me to reach policy decisions on the content of the bill.

There were mixed, but some strong, views on the inclusion of individual consumers in the bill. We listened carefully to those views and to the views of the committee, and the bill was amended as a result. Despite any concerns about individuals, it was clear that there was consensus that the law in Scotland on moveable transactions is outdated and that the changes proposed in the bill would make a significant and positive difference for businesses in Scotland.

The bill is a product of extensive consultation and consideration by both the Scottish Law Commission and the Scottish Government over the past decade or so. At its heart is the aim of modernising the law of Scotland relating to moveable property transactions, which is vital to the economy of any country with a developed legal system.

I will briefly remind members about some of the key provisions in the bill and what they are intended to achieve. Part 1 of the bill reforms the law in relation to the assignation of debt. It will introduce a new register of assignations, which will provide an alternative to intimation as a means for assigning debt. That should be of considerable benefit to businesses.

The Federation of Small Businesses in Scotland has indicated that 3,500 small businesses in Scotland fail each year, not because the businesses are unsustainable but because they cannot get their customers to pay invoices that are due.

Will the member take an intervention?

Just one moment, please.

The Late Payment of Commercial Debts (Interest) Act 1998 was introduced to give small and medium-sized enterprises the right to claim interest on late payments. It is, however, understood that 80 per cent of small businesses do not do so, for fear of jeopardising business relationships with customers, who often have greater bargaining power. That information was set out in the policy memorandum to the bill, but it bears repeating today.

Notwithstanding the issues that have been highlighted through the amendment stage, it strikes me that the registers are the most important area. For the legislation to work and be effective in delivering what everyone wants, we need the registers to be efficient and to operate in the way that is intended. That is very much about oversight of the delivery. Will the minister set out whether he agrees with that insight and what steps will be taken to ensure that the registers are efficient and effective?

There will be regulations forthcoming. The ambition is to have the registers up and running by summer of next year. Of course, Registers of Scotland, as a non-ministerial office, is directly accountable to Parliament on this issue and on all its other functions.

Members of the committee have had the opportunity, as have I, to see a demonstration of the alpha and beta versions of the software for the registers. I think that it will be a very efficient system and straightforward to use. I have no doubt, given the outstanding work that Registers of Scotland does in delivering across a range of areas, that it will have that continued engagement with stakeholders to ensure that the registers deliver on the intended outcomes that are set out in statute.

I know that Parliament will maintain a keen interest in how the registers actually function, and we will have the review period, as agreed through amendments, to consider not just the operation of the bill and the specific provisions highlighted in the bill, on sole traders and waiver of defence, for example, but more widely how the registers are operating in practice.

I will go back to the comments from the FSB. In its written evidence, it provided a worrying update on the figures to which I referred earlier, stating that it believed that the issue is “becoming more acute”. It stated:

“Over one in ten Scottish firms ... say late payment is now threatening the viability of their business.”

The ability of a business to assign the debts that are owed to it is a vital way of improving its cash flow, which is the lifeblood of many businesses—especially micro and small businesses and new start-ups. The present system is cumbersome, expensive and often impractical, and it does not work in respect of future claims.

Once again, I will quote from the written evidence to the committee at stage 1 from the Federation of Small Businesses, because small businesses are a key sector of the economy that the legislation will help. The FSB stated:

“The need for Scotland’s small businesses to be able to access such finance options is plain. There is a maxim that it is not a lack of profitability that kills businesses, but a lack of cash. And small firms’ cashflow is often interrupted by the late payment of sums owed to them.”

The provisions in part 1 of the bill are intended to address the current problems that businesses face.

Part 2 of the bill will deal with security over moveable property. In Scotland, there is no such thing as a mortgage over moveable—as opposed to heritable—property, in the way that there is in England. Instead, businesses here are faced with adopting difficult alternative arrangements, which are often impractical and invariably more costly.

For example, the current system of pledge requires the delivery of the property to the creditor. However, businesses require possession of the assets, such as vehicles, plant and machinery, in order to trade. It is understood that at least one major financial institution will not lend on plant and machinery in Scotland because of the current state of the law on moveable transactions. Others will lend, but at a higher rate of interest, due to the complex workarounds. That situation is simply not good enough; it needs to change and the bill will change it.

In its submission for stage 1, UK Finance wrote:

“In terms of lending against wider assets, the Register of Statutory Pledges will be an important step-forward. Large (including global) businesses seeking to borrow on the strength of extremely valuable stock that is subject to Scots law are, again, generally only able to do so on the basis of floating charge at present. The most obvious example of this would be whisky stock. The new regime would allow specific fixed security to be taken against such assets, facilitating new lines of finance.”

In UK Finance’s view,

“the absence of first charge security attracts greater risk and thus a higher cost of funding for the lender which will inevitably need to be passed on to the customer business either in whole or in part. Introducing the possibility of having specific security over a range of wider assets—through the Register of Assignations and the Register of Statutory Pledges—would help close that gap for smaller businesses, in particular.”

I am convinced that the provisions in the bill will result in reforms to the law that will be of benefit to businesses across Scotland and improve the lending environment to facilitate business growth.

I move,

That the Parliament agrees that the Moveable Transactions (Scotland) Bill be passed.

16:17  

I thank the Scottish Government for introducing the bill. It is an important bill for business and the commercial sector in Scotland and, as the minister outlined in his opening speech, one that will allow people to trade more quickly, easily and efficiently.

For far too long, we have been reliant on English law. Evidence that the Delegated Powers and Law Reform Committee took at stage 1 showed that people were having to use contracts that were not really fit for Scots law as a workaround. The changes that the bill introduces will really help.

The committee has had a good working relationship with the Scottish Law Commission and the Scottish Government, which shows that Parliament can work together to bring forward changes that will benefit business in Scotland. There needs to be wider consideration both by the Scottish Government and Parliament about how we look at Scottish Law Commission reports and bills.

The legislation has been a long time coming. Many other bills are in the pipeline, waiting to come through—I appreciate that another one is already before the committee—that will not bring great political excitement but that will radically change how people can work and live in Scotland. I hope that the Government will keep introducing those bills over the next few years so that we can deal with some of the backlog that has built up over a number of years.

When we considered the evidence at stage 1, there were two areas that raised concern among committee members. The first was in regard to ensuring that we did not, through the back door, include individuals in the legislation. Clearly, we want sole traders and partnerships to be able to enjoy the benefits of the bill, but we do not want people to misuse the law and pull individuals into that. There have been amendments from different parties on that issue and, on balance, we have just about reached the right level with it. I hope that individuals will not be drawn into it; I think that, with the £3,000 figure and the removal of household goods from the bill, we have protected individuals in that regard, while allowing sole traders and partnerships to benefit.

The second area of concern—the minister will think that I am a broken record about this—is financial instruments. I still think that that could have been in the bill, but I did not want to lodge amendments at stage 3 in case that caused legal problems. However, financial instruments are one of the big areas that the legislation has to cover. I appreciate that there is on-going work between the minister and the United Kingdom Government. I hope that, once the bill becomes an act and as work continues over the coming year, things can be progressed quickly on both sides in that regard.

I was pleased that, at stage 2, the minister gave the assurance that he is committed to that and that he and his officials will work with the Westminster Government to achieve it. However, it would be helpful if the minister, in closing the debate, would re-emphasise that assurance. He can be assured that I will lobby my colleagues at Westminster to ensure that there is no delay there.

Overall, I think that the bill is good. It is a better bill due to the scrutiny of the committee. I look forward to it working in practice as soon as possible.

16:22  

Not having sat on the committee or put in the hard yards, I must apologise to the members who did put in the hard yards for being something of an interloper.

The bill is an important piece of legislation. It might seem dry and technical to people on the outside, but, having run a small business, I can tell them that it is really important.

I welcome the words of the minister when he reflected the comments from the FSB, which were absolutely right. Many small businesses find getting up and running—or just staying running—incredibly difficult because of their inability to finance. The simple reality is that, for many small business owners, they might be set up as a limited liability company, but the only way in which they can gain finance is by putting up their house as collateral. If the bill, in some small way, eases that situation, frees them up and provides more options, it is welcome.

It is right that we bring the law up to date. I found it surprising to learn that assignations were not possible. Those are important for things such as invoice finance, which is critical for small businesses, many of which transact with large corporate entities that force them on to terms that might not reflect the reality of their cash flow. On that corporate note, assignations are also a critical part of a broad range of corporate transactions, and the fact that those are not possible makes doing business in Scotland more difficult. Making it easier to set up and run small businesses is a good thing, and facilitating business full stop in Scotland is also a good thing.

A number of concerns were raised throughout the passage of the bill, and I am pleased that, in broad terms, those have been addressed. The concern that was raised by Mike Dailly of the Govan Law Centre and others about the possibility of reintroducing warrant sales through the back door was a serious one. The £3,000 threshold, the making explicit that the arrangement does not cover private individuals and the emphasis on the primary business use of the assets are all welcome.

I would have preferred an automatic mechanism for uprating. We all know that inflation can undermine the value of things over time and, indeed, oversight could mean that that threshold—which, as Stuart McMillan was right to say, is fundamentally important—could be undermined through neglect. I note the Government’s commitment at least to a review after five years, but a mechanism would have been better.

Likewise, although I heard what the minister said, I regret that Carol Mochan’s amendments on the specifics of the review were not agreed to.

On the more technical points, I urge that we have continued interest in and oversight of the registers. It is all well and good to have beta testing of software but, fundamentally, for the registers to work once they are up and running, its operation will be critical.

Likewise, we need to ensure that the review takes account of all the key concerns and issues that have been flagged. It was good to hear that on the record from the minister today.

I will end with some broader reflections. There is a need to set out in a more standardised way what good practice is when it comes to legislative review. With every piece of legislation that we consider in this Parliament, we have the same arguments. We say that it is important that we have a review period. The Government then says, “Oh, actually, that would be onerous and cumbersome. Just trust us to get on with things.” We might need to reflect on that and come up with a standard form of how reviews should take place that does not overburden the Government but ensures that we keep a watch on things. We can all agree that we are much better off if we proactively look at such things rather than fall back. I am pleased with the time period in the bill, but we do not always manage that through the passage of legislation.

My final point was raised by Jeremy Balfour and is critical. The Scottish Law Commission does excellent work. It performs that on-going tidying up and reviewing of law that is so critical to our law functioning well. However, I note that 34 of its reports remain outstanding and unactioned. That represents 15 per cent of all the work that it has done since its inception. We need to look carefully at how those reports are actioned, not just because of things such as compulsory owners associations in tenements, which I would like to see when it comes to ensuring common repairs, but because of a broad range of other important things. Again, the Government needs to commit to ensuring that there is parliamentary time to consider important bits of tidying-up legislation.

We move to the open debate.

16:28  

Today, I speak not as the convener of the Delegated Powers and Law Reform Committee but as a Scottish National Party member. However, I put on the record my regards and thanks to committee colleagues for the way in which we have conducted ourselves and for the level of scrutiny of the bill throughout the process.

I will use some of my time to highlight aspects of the committee’s work on the bill and the positive impact that I believe the committee to have had. I also acknowledge the positive way in which the Scottish Government has engaged with the committee and its willingness to take on board many of the concerns that the committee raised during the process.

Points about the Scottish Law Commission have been touched on. As we know, SLC bills tend to be non-party political and non-partisan. They are more technical, which Daniel Johnson alluded to. The fact that the committee has looked at a number of such bills has highlighted the positive impact of the extension of its remit, because that has provided the space for some SLC bills to be scrutinised and then implemented. However, I accept the point that Daniel Johnson has just made about the number of bill proposals that are still sitting with the SLC. A large amount of work is still to be done to update Scots law in a wide variety of areas.

It is very unusual for someone to say to me, “You’re one of the people from the Delegated Powers and Law Reform Committee. I want to talk to you about a bill.” However, when I was at an event here in Parliament a number of months ago, the very first person I spoke to said, “This moveable transactions bill that you are looking at is a hugely important piece of legislation.” I said, “Well, it’s just come to the committee. We are starting to process it and we are very much enjoying what we are doing with the scrutiny of it.” The individual then said, “As soon as the bill is implemented, we will be using it from day 1.” That touches on the points that were made by Daniel Johnson and Jeremy Balfour. Jeremy Balfour touched on the workarounds that have been utilised so far and the use of English law. The bill will ensure that more money is spent in Scotland and in the Scottish economy, which can only be a good thing.

From the outset, the committee was clear that the bill proposes important reforms that could benefit individuals and businesses across Scotland in relation to access to credit and finance. However, the committee’s scrutiny raised a number of issues with the bill as introduced. I am pleased that some of the recommendations have been taken forward, such as removing the ability of individuals to grant a statutory pledge, taking into account the concerns about the potential for the bill to open up a further high-cost credit market, so we consider that that will protect consumers.

In addition, the value threshold for statutory pledge items has been raised from £1,000 to £3,000. That will certainly further reduce the risk of household items being taken, which is a good thing. There is also the provision relating to only a simple electronic signature being required, which will make it easier to conduct business.

I believe that it is important that the two registers established by the bill are extended to include financial instruments. Throughout its scrutiny of the bill, the committee sought regular progress updates from the UK and Scottish Governments on a section 104 order, which Jeremy Balfour touched on. In one of his final comments earlier, he said that the bill is “good” and that he will be delighted to see it implemented “as soon as possible.”

That takes me back to the point about the section 104 order.

Please conclude.

Sure.

If the Scottish Government had had that in the bill and it had been challenged at some point, that would have hampered the bill’s implementation. The process that has happened is right so that the bill can be implemented. I absolutely agree that we would like to get an update on the section 104 discussions between the Scottish Government and the UK Government, but I am certainly happy to support the bill today.

16:32  

I thank all the members across the chamber who are debating this very technical bill. As a latecomer to the committee, I recognised that quite early on.

At all stages, Scottish Labour has supported the modernisation of the legislation and recognised the positive impact that it is likely to have on access to credit and finance for many different groups and individuals. My colleague Daniel Johnson laid that out well.

We have worked hard, alongside consumer and money advice organisations, to get this right. I am satisfied that, for the most part, we have achieved that. As I said, I was a latecomer to the committee. Having come into the committee at that late stage, it is important for me to recognise the work that it did on the report and to say thank you to the minister, the members of the committee I came in to work with, and the clerks for all the support that they gave on it. Some of the technicalities were quite difficult to work through, but everybody took the time to support each other and to make sure that we got it right because it was seen as such an important piece of legislation.

I would of course have liked some of the Labour amendments to have reached the final stages of the bill. We lodged them, at stage 2 in particular, in order to genuinely improve the functioning of the bill. The minister has recognised that we did that in good faith.

When the legislation was announced, concerns about its potential unintended consequences were raised by various stakeholders. Those were a priority for me and Labour colleagues. I asked a question in the chamber early on and the minister and I had a discussion about that. The concerns were associated with the drafting of the bill and how it might negatively affect people.

From today’s debate it can be seen that we have worked hard on those issues, as is now reflected in the bill.

As other members stated earlier, Scottish Labour agrees that the bill should pass. We look forward to its introduction because it will remove a key competitive disadvantage for Scotland’s businesses in comparison with their friends in England. I trust that the process has moved forward with the concerns of small businesses and sole traders in mind and that any unintended consequences have been removed. I applaud the co-operation among all parties that has brought us to this point.

As I am sure the minister will recognise, Scottish Labour members will continue to scrutinise the operation of the bill to ensure that the commitments that he made in the chamber today are kept. I look forward to doing so.

16:35  

I thank everyone who has been involved in discussions and debate on, and scrutiny of, the bill in the past few months.

In particular, I thank the Scottish Law Commission for its report on moveable transactions, which was published back in 2017 and which contained 203 recommendations for change. Our current laws relating to moveable transactions are older than many countries in the world, so I am grateful to the commission for all its work to update our legislation on the subject. I am pleased that, today, we will modernise Scots law on moveable property transactions.

The Law Society of Scotland has also provided on-going and useful information and views on different components of the bill, and I am grateful to it for its insight.

As several of my colleagues have said, the bill is a technical one. I thank the Delegated Powers and Law Reform Committee for its forensic scrutiny at previous stages. I also thank Tom Arthur for his engagement with me over the past few months. I have not been involved in the development or formal scrutiny of the bill, so learning about the committee’s work and having conversations with the minister have been invaluable for my better understanding of its various elements

As we have heard, the bill seeks to modernise our laws on transactions involving corporeal and incorporeal moveable property. Put simply, it will make it easier for businesses to raise finance by using their moveable property such as vehicles, equipment, intellectual property and future invoices. Such legislation is vital for the efficient and effective operation of businesses. It will enable them to raise finance by using assets, selling debt owed to them or granting security over moveable property, all of which will be valuable tools for managing their cash flow and potential financial pressures. Making such transactions more efficient, less expensive and less complicated than they currently are is certainly to be welcomed.

As the ministers and others stated so plainly earlier, businesses—especially smaller ones, perhaps—that find themselves having to fold often do so not because of lack of profitability but because of lack of cash flow. As we have heard from the whisky industry among others, the introduction of the statutory pledge, along with a straightforward online registration system, will improve the lending environment for them, and so will better support those important components of our economy. With the passage of the bill, so-called idle commodities can be made an active part of a business’s operations.

On one of the areas of dispute—the automatic uprating of the £3,000 threshold—I appreciate the concerns that Carol Mochan and her colleagues expressed, and the view that an automatic uprating would be beneficial. It is certainly true that such matters could slip through the cracks. I will join with Carol Mochan and others to ensure that we will not let that happen in the future. I know that she and her colleagues will keep at the Government to ensure that that is the case in future years.

Finally, I again place on record my thanks for all the work that Citizens Advice Scotland, StepChange and other consumer and money advice groups have done, over many months, to ensure that consumers were excluded from the scope of the bill. Especially now, at a time when we have an unprecedented cost of living crisis, including them would have caused harm, however unintentional that might have been.

Scottish Greens will be pleased to vote in favour of the bill at decision time.

16:39  

I, too, thank the DPLR Committee clerks and the legal team, who have helped us through all of this.

In short, the Moveable Transactions (Scotland) Bill will support smaller businesses to raise finance, helping them to maintain income and address rising business costs. It will do so by modernising and simplifying the law on borrowing against moveable physical and intellectual property. Overall, that will lead to greater access to finance for businesses in Scotland.

Our economic growth and prosperity over many decades have been the result of entrepreneurial, talented and motivated workers in every sector, geography and demography working in a culture that rewards and celebrates innovation and initiative. The economic strategy recognises that and the challenges that Scotland faces over the next 10 years in what has been described as a decisive decade. In that decisive decade, growing and providing the seeds for success for small and medium-sized businesses will be pivotal to meeting our aspirations, and the bill forms part of the steps that we need to take to meet those aspirations.

The bill will give small and medium-sized enterprises and other businesses new opportunities, allowing them to raise finance by securing funds against largely untapped assets such as vehicles, plant, machinery or even whisky stores.

At the moment, Scots law on moveable transactions is a long way behind international standards, which makes some transactions difficult or even impossible to execute here, necessitating the use of cumbersome, complicated and therefore expensive workarounds or indeed the use of English law, which takes longer and is more expensive for companies in Scotland. We need to support the passing of the bill because, if it is not progressed, Scotland will fall even further behind those established international standards.

I believe that the Scottish Government has worked constructively and effectively with the committee and heard the views of the many organisations that gave evidence. The Scottish Government’s amendments to the bill at stage 2 got the balance right in protecting individual consumers while not denying small businesses and sole traders the opportunity to use the provisions in the legislation.

Committee members from across the political spectrum expressed their support for the principles of the bill and I believe that the stage 2 process should have cemented that support.

For those reasons, I urge members to support the passing of this important bill, which will help Scotland’s businesses and our economy and help us to meet our aspirations to deliver economic prosperity for all of Scotland’s people and places.

We move to the winding-up speeches.

16:42  

The legislation that we have been considering today, although overdue, is welcome. Indeed, as we have heard this afternoon, it has been welcomed across the chamber. If the bill passes this afternoon, as we expect it to do, it will bring us up to date with our English and Welsh counterparts, which I am sure we will all welcome.

Behind the technical terminology that is used to discuss and debate some of the matters that are covered in the bill, there are real people whose lives and livelihoods will be impacted if the bill passes today. I thought that the minister spoke eloquently to the need for the bill and the difference that it can make. In that regard, we can consider the sole trader who is hoping to get their business up and running and the small business owner who wants to raise funds without fear of losing their home. Those people have the potential to contribute to our economy and our society in valuable ways.

In our society, we all too often see wealth accrue to the already wealthy. Those with significant heritable property and significant assets are much more able to secure ready credit, while those without are locked out. That is not the kind of economy that many of us in this chamber want to see, and the more we can do to change that, the better.

As a country, we are facing severe economic challenges, with soaring interest rates, stubbornly high inflation and eye-watering energy prices. The financial fairness tracker report that was commissioned by abrdn Financial Fairness Trust and published in February this year found that one household in five is currently living in serious financial difficulty. That is equivalent to half a million Scottish households and, unfortunately, those headwinds show no sign of abating just yet. Research that the Resolution Foundation published in January 2023 estimated that Britain was only at the midpoint of a two-year income squeeze. It is vital that we recognise the particular context that we find ourselves in and the additional pressures on households and the businesses that we are discussing today.

I want to place on record my thanks to my Scottish Labour colleagues Paul Sweeney and Carol Mochan for their work on the bill at stages 1 and 2, and, indeed, to all members who participated in the committee process and the debate today.

The scrutiny of the bill—particularly in relation to my fellow Labour members’ concerns for sole traders and individual consumers, which fed into discussions with the minister—has resulted in amendments that have enhanced the bill. Raising the minimum threshold for an asset to £3,000, in line with the recommendation of the Delegated Powers and Law Reform Committee, will afford greater protection to consumers and sole traders alike.

It is disappointing that, as outlined by Daniel Johnson and others, the Government has reversed an amendment that was made by Scottish Labour at stage 2, when the committee agreed that the minimum threshold of £3,000 be updated annually in line with inflation. I remain unconvinced by the minister’s arguments in that regard. We have heard about the backlog of Law Commission bills that was highlighted by various members. That speaks to some of the challenges that we often hear about from ministers around finding the necessary time in committee and in the chamber to make good on some of the promises of work that is required.

Transparency appears to have become the word of the moment in this place—I cannot imagine why. In that regard, I urge the Government to consider its timeframe for reporting on the impact of the legislation, in order to ensure that we have transparency and that we protect sole traders and individuals. I am sure that none of us wants the rights of individuals to be negatively impacted, and a timely review would certainly help with that.

The Government can rest assured that Labour members will continue to scrutinise the operation of the legislation when it comes into effect. We are happy to support it, and I hope that it has the support of Parliament today.

16:46  

Presiding Officer, I suspect that, like me, you are a bit of a Ronan Keating fan. As he put it,

“You say it best when you say nothing at all.”

I have to say that I am slightly tempted to say that we have almost said enough in relation to this bill, but, as a politician, I feel that I have to say a few more words.

Members: Aw.

Thank you.

I want to thank, in particular, those who have made the bill possible, starting with the Law Commission. More than 30 years ago, just up the road, I sat and listened to lectures given by Professor George Gretton, and found that understanding every fourth word was a real challenge. I have to confess that, when he came to give evidence to the committee at stage 1, I am not sure that I understood much more than I did when I was in those second-year law lectures. However, the Law Commission put in an immense amount of work. As I said in my opening remarks, we need to look at the pipeline of legislation with regard to how we prepare ourselves to deal with it.

My thanks also go to Scottish Government officials for producing the bill, to the minister for taking it through Parliament, to all those who gave evidence to the committee, to my fellow committee members and to the clerks and the team here in Parliament, who make our work as easy as possible.

I want to reflect on the point that Daniel Johnson picked up on in his speech, which reflects something that I mentioned earlier. I think that, across the chamber, we need to consider the issue of post-legislative scrutiny. I think that, with regard to a number of bills that were passed with good intentions in previous sessions of Parliament, it would be a good idea to go back and see how they are working for individuals, communities, charities, companies and so on, because I think that the honest answer is that they are not working well for them.

Does the member think that we could come up with some sort of pro forma review stipulation that we could put into legislation in order to make post-legislative scrutiny more straightforward? Does he agree that we should have some principles that we could agree on as regards timeframes and the content of reviews, so that we do not get into a negotiation bill by bill?

We should consider that. There are committees that could do that and bring forward recommendations involving either standing orders or some form of pro forma text that could be put into legislation.

Often, the issue is caused by the fact that, as parliamentarians, once a bill is passed, we move on and forget about it. In addition, obviously, each new session brings in new MSPs who are not aware of the history of what has gone on before.

I will finish on a positive note: I think that the bill will help business in Scotland. We can all support it, and I look forward to it passing in a few minutes’ time.

16:49  

I thank everyone who has contributed this afternoon. I recognise Mr Balfour’s point that the reality of politics is that the debate is not over when everything is said, but is over only once everyone has said it. However, we have had a very useful debate and the opportunity to explore a range of issues.

The bill is indeed sizeable and, to some—as was noted earlier—it might seem to be dry and technical. There is also some complexity, not least in respect of the insolvency provisions that we considered earlier. However, a detailed and methodological approach is needed to address the particular challenges of reforming law that is outdated and no longer fit for purpose.

I hope that it is clear that we listened carefully to what stakeholders, the committee and other MSPs said at stages 1 and 2, and I hope that it is clear that the bill matters. It matters to the estimated 360,910 private sector businesses operating in Scotland as at March 2022. The vast majority of those businesses—98.3 per cent of them—are small, with 49 or fewer employees.

It is clear that cheaper and less risky access to finance will provide a boost to those businesses, not just in terms of survival and making ends meet, but in terms of development and growth, by improving the facility and the ability for businesses to innovate and expand. Anything that can be done to improve the environment in which business in Scotland operates should be welcomed. Although the bill is legal and specialist, it is intended to deliver real and practical help on the ground to businesses throughout Scotland.

I was happy to lodge amendments at stage 2 to implement some of the committee’s thoughtful recommendations, particularly in relation to individual consumers. I have also been pleased to support some of the amendments that the committee made at stage 2. We have agreed some adjustments to those today to ensure that they work as intended. I hope that members will appreciate, on reflection, why we needed to reverse some of the other amendments that were made at stage 2. However, some of those reversals have come with commitments—namely, to consult further in respect of the definition of “insolvency” and to keep the threshold for encumbered property for sole traders under regular review so that it takes account of inflation.

If the bill is passed today—I sincerely hope that it will be—there will still be a lot of work to be done before the provisions will be capable of coming into effect. The provisions in relation to assignation and statutory pledge rely on the creation and operation of two new registers that will be run by Registers of Scotland. Considerable progress has already been made on the necessary technology and development; we are in a very good place, with the necessary funding also being in place. Quite detailed regulations will also need to be in place to set out the rules about use of both registers. Again, progress is being made on that. I thank the people in Registers of Scotland who are undertaking that work, and I thank them for their close and helpful co-operation with officials in the Scottish Government.

As I have mentioned, I have undertaken to consult on the complex issues around how we define insolvency for the purposes of the legislation. That will take place over the course of the next year, and any necessary regulations will be made in time for the provisions coming into force.

As expected, mention has been made this afternoon of the need to ensure that the provisions in the bill extend to financial instruments and financial collateral. I hope that I have been very clear that I am absolutely and fully committed to extending the provisions in the bill to financial instruments and financial collateral. We will work with the UK Government to have in place the necessary section 104 order to achieve that.

In that spirit, I very much welcome Mr Balfour’s remarks and his intimation that he will encourage his Conservative colleagues in the UK Government to continue their constructive engagement. I also thank the committee for taking an interest in that and for taking the step of seeking to engage directly with the UK Government. We are absolutely united in recognising the benefits that that will confer on the Scottish economy, and we want to ensure that we can achieve that section 104 order in as smooth a manner as possible, so that the provisions are ready to come online when the new registers are in place next year. Consultation will also need to be undertaken on the issue of the fees for using the registers. Again, we will be relying on and working with Registers of Scotland on that aspect of the legislation.

There is, as I said, still a lot to be done, but our target is to have all the necessary consultations, regulations and functioning registers completed by next summer. At that point, we will commence the main provisions.

Importantly, the bill incorporates powers so that we have the tools and flexibility to ensure that provisions can be kept up to date. Some of the powers are likely to be used rarely. Nevertheless, as time passes and we gain knowledge and experience of how the registers are being used and the extent to which they are being used, Scottish ministers will have—subject, of course, to scrutiny by the Scottish Parliament—the ability to, for example, specify the type of case for which registration of an assignation would be compulsory; provide a model notice of assignation; refine what constitutes a “seriously misleading” inaccuracy in the registers; extend the categories of person who are entitled to make an information request; and add to the kinds of incorporeal moveable property over which it is possible to grant a statutory pledge.

I could go on, but I hope that that illustrates that, subject to what it is reasonable to delegate, efforts have been made to future proof the bill to help it to stand the test of time. From that perspective, although I did not feel that a review duty was necessary, I have always been of the view that the legislation should and would be reviewed as necessary. The Government looks forward to the opportunity to review it in due course.

Finally, I repeat my thanks to all those who gave evidence to help to improve the bill during its parliamentary process. As has been highlighted, that has demonstrated the Scottish Parliament working at its best, with detailed scrutiny by committee and considered engagement with a range of stakeholders. The legislation, which I appreciate has taken a long time to come to fruition, is something that the Parliament collectively can be proud of. I once again put on the record my sincere thanks to the Law Commission, to stakeholders, to the committee and to everyone who has contributed to getting the bill into the state that it is in today.

I commend the motion in my name.

Thank you. That concludes the debate on the Moveable Transactions (Scotland) Bill. It is now time to move on to the next item of business.