Debt Arrangement and Attachment (Scotland) Bill: Stage 1
Good morning. Our first item of business is the stage 1 debate on motion S1M-3085, in the name of Jim Wallace, on the general principles of the Debt Arrangement and Attachment (Scotland) Bill. I call Margaret Curran to speak to and move the motion.
On a point of order, Presiding Officer. Before the debate begins, I seek clarification about the capacity to amend the bill. The advice that has been given to me is that any plan to remove the exceptional attachment order provision from the bill at stage 2 would be ruled incompetent. It is important that that point is clarified later this morning for the information of members. Many members have expressed their opposition to that provision, although they support other elements of the bill.
I understand that Mr Sheridan has been in contact with the clerks on that subject. The matter is for the committee convener at stage 2 and I would not want to pre-empt any decision by the convener. My understanding of the matter is that, although there cannot be deletion, there could be amendment.
I am very pleased to open the debate in the chamber today, which is an important day for the Parliament. Today we effectively discharge our responsibilities to deliver a humane alternative to poindings and warrant sales—a workable scheme that protects the poorest and most vulnerable. We need to deliver a system that does not create loopholes for the few who are prepared to let everyone else pay for the services that they wish to use and are not prepared to face up to their financial responsibilities.
Many in the Parliament will know of the background to the work that has been undertaken to date. They will know that the Executive established a working group that led to the publication of the report "Striking the Balance: a new approach to debt management". The working group brought together people who wanted and knew that we had to find a workable alternative. Those who could not cope with that responsibility made their excuses and left.
The bill is the result of a lot of hard work by people with all sorts of competing interests who pulled together to deliver the alternative that the Parliament had called for. We now have a bill that has drawn together a panorama of opinion and ideas and achieved a consensual approach, which was no mean feat. The result was to turn old practices on their head, to look at the root of the problem, to tackle the real source and to treat it holistically.
The bill is an excellent example of our drive to ensure that different Government departments work together to achieve multiple aims and improvements. As Minister for Social Justice, I am pleased to introduce the stage 1 debate on the bill, which is part of a new strategy for tackling debt. From my social justice perspective, I promote social inclusion in Scotland—that includes financial inclusion. Unmanageable debt is an important, although not the sole, factor in financial exclusion. The perspective of the ministers with responsibility for the justice brief, on the other hand, is to promote improvements to the justice system to make it fairer, more accessible and more effective.
The minister knows that many people have serious, sincerely held concerns that, because personal possessions can be used to offset debt, the bill is merely poindings and warrant sales by another name. What does she say to those people?
I recognise that the Social Justice Committee took a lot of evidence on that subject and considered it in depth. I want to make it clear that last year—I think that it was last year—I voted for Tommy Sheridan's Abolition of Poindings and Warrant Sales Bill. If I thought that the Debt Arrangement and Attachment (Scotland) Bill was not abolishing poindings and warrant sales, I would not be in the chamber today to move the motion. I want to make it absolutely clear to the Parliament and the people of Scotland that the provisions in the Debt Arrangement and Attachment (Scotland) Bill are not poindings and warrant sales by another name.
To illustrate the point, let me summarise the key differences between the old system and the new one that we are proposing. Creditors must make a specific application for an exceptional attachment order. They must provide debtors with an advice and information pack. If that step is successful—in the great majority of cases, we hope that it will be—all legal action stops at that point.
If it is not possible to reach agreement, the case may come to a hearing. The debtor can submit a voluntary declaration, which ideally would be made with the help of a money adviser. The debtor may also be assisted in person at any hearing by a money adviser or another lay person. The sheriff will take account of individual circumstances including whether debtors received the advice and information pack; the nature of the debt; whether creditors tried to reach a settlement or secure payment by other means; and the information that is contained in any voluntary declaration.
That is not just my view or the view of the Scottish Executive. In its evidence to the Social Justice Committee, the Scottish Consumer Council said that it was not reasonable to say that the bill's provisions
"amount to poindings and warrant sales under another name."
In its evidence to the committee, Money Advice Scotland said:
"We would contend that the proposals are not a rose by any other name."—[Official Report, Social Justice Committee, 12 June 2002; c 2994 and 3014.]
As the committee observed more generally:
"the vast majority of the organisations which submitted evidence were generally supportive of the Bill".
Will the minister take an intervention?
No. I am finishing my answer to one intervention. Let me finish that response.
It is absolutely clear that the bill is not poindings and warrant sales by another name.
Will the minister take an intervention?
No. I want to move on. I am not taking two interventions one after the other. It is not appropriate for me to take another intervention if I am to explain fully the general principles of the bill.
Let us consider the general principles of the bill. As I said, debt management is the front-line solution. Early intervention is required to promote dialogue and negotiated settlement. We need free, independent and easily accessible money advice. We are placing the enforcement system behind all that so that enforcement is not the first resort for recovering debt. The enforcement system will help people who can pay to do so. That protects those who cannot pay. However, the system will deal effectively with the minority who very well can but simply will not pay until they are compelled to do so.
The Executive's objective, which embraces the aims of everyone who chose to take part in the search for a new way forward, is to empower individuals to deal with their own debt problems. We will give the help and support that is needed to get people back on their feet.
The minister mentioned Money Advice Scotland. She will be aware that Money Advice Scotland's evidence to the Social Justice Committee included the comment that, under the bill, 70 per cent of its clients would be excluded from the debt arrangement scheme. Will the minister address that point?
We will move on to consider the detail of the bill. I have made it clear that today we are debating the general principles of the bill. We are taking a broad-based approach to consultation and involvement. At the next stage, we will consider the detail to ensure that the bill has the maximum impact that we intend it to have. We will go to wide consultation and consider the detail of that consultation. Money Advice Scotland will be a key source of the evidence that we will consider.
We are absolutely determined to give the help and support that is needed so that people can get back on their feet and, with a bit of dignity, regain control in doing so. We are also determined to get more debt paid in a managed way and to avoid the time and cost of enforcement. That is to the advantage of all. As I said, we reflected, debated and consulted long and hard on all the issues and problems that were raised. The bill is the result of extensive reflection and consultation.
Early in its life, the working group recognised that, in order to find the alternative to the diligence that had been abolished, it needed to examine a new approach to debt management in Scotland. The title of the working group's report—"Striking the Balance: a new approach to debt management"—describes exactly its recommendations. When the Executive put the working group's recommendations out to consultation, people across Scotland took the time and trouble to respond. The vast majority welcomed and supported the new approach that is proposed. It is important that I register that point strongly. Having gone through the process of intense discussion among stakeholder representatives and public consultation, the working group's recommendations now form the basis of the bill.
Will the minister take an intervention?
No. I want to carry on.
We have introduced a new approach to debt management and debt enforcement that responds directly to the views of the Scottish people.
I now turn to the detail of the bill. The bill was introduced in May and has been scrutinised by the Social Justice Committee, which took further views from interested parties. As I said, the committee endorses the general principles of the bill and welcomes what the bill seeks to achieve.
We will, of course, take account of the concerns that the committee raised. However, the bill has passed its first, fundamental test—that of setting the humane and workable alternatives that the Parliament sought. In order to make it absolutely clear, I will repeat that the bill is not poindings and warrant sales by another name.
Will the minister give way?
No. If the member does not mind, I will carry on. I have already taken an intervention from him.
The bill creates new procedures and protections for recovering debt. It also establishes a national debt arrangement scheme, which will allow the repayment of multiple debts in a managed way that is free from the threat of enforcement. The money advice movement has advocated such a scheme for many years.
The Executive is committing resources to support that. For example, it has already provided £3 million additional funding per annum for front-line money advice support, which is being deployed across Scotland even as we speak. I have already said that the bill is the result of a wide-ranging consultation process and follows the conclusions of a diverse range of people, who reached universal agreement on the need for a national debt arrangement scheme.
There was also agreement about the need for enforcement for those who had the means but were unwilling to pay their debts until they were forced to. The Executive has set out its stall for the debt arrangement scheme in part 1 of the bill. Moreover, details of the proposals have been set out in "Enforcement of Civil Obligations in Scotland", the Executive's consultation paper on the reform of all aspects of the enforcement system. We invited views on detailed arrangements for the debt arrangement scheme and received a wide range of responses, which are being independently analysed. I can confirm that the results will be published.
The Subordinate Legislation Committee has made some criticisms about the extent to which the Executive wants to rely on regulations. Will the Executive respond positively to those comments? It is important to ensure that citizens' rights are contained in primary legislation and the major statutes.
The Executive takes the Subordinate Legislation Committee's comments seriously. Some would argue that we are doing things the wrong way round and that we should have finalised the details first before introducing the bill. Indeed, I suspect that Robert Brown would make that argument. However, because of the nature of the previous member's bill and the need for the Executive to respond within a strict timetable, we have had do things this way round. That said, I can confirm that the Subordinate Legislation Committee—and the Parliament, if appropriate—will be fully consulted on the matter. As I said, given the time scale available, our only real alternative was to put the detail in regulations. We would have done so in primary legislation, but we are where we are.
Money advice will be the gateway to the debt arrangement scheme. Although we do not see it in the bill, real people are already benefiting from the Executive's investment in money advice. Even as we have this debate, 100 additional money advisers have already been put in place across Scotland. We have invested an extra £500,000 per annum towards training and a common framework for quality assurance that will support consistent, high-quality money advice.
The bill's provisions in relation to the debt arrangement scheme and the introduction of money advice as part of the enforcement process will ensure that we focus on giving information and advice by accessible, straightforward means. That will allow people to understand the choices that they can make to help them to help themselves.
Part 1 of the bill focuses on debt management. The debt arrangement scheme will build on existing and successful voluntary debt payment programmes that are already provided by the voluntary and not-for-profit sectors. We can improve such voluntary arrangements by ensuring that no enforcement action can be taken while real efforts to pay off debt are being made and maintained. The scheme needs to be national so that it is freely available to everyone under consistent terms.
Undertaking a debt payment programme under the scheme is not an easy let-off. However, setting up realistic programmes for repayment will mean that creditors as well as debtors will benefit. We must stop the upward surge of debt for the sake of everyone—individuals, the wider community and Scotland as a whole.
Parts 2 and 3 of the bill are about debt enforcement, or at least about one kind of enforcement. As members know, the Executive has been consulting separately on the whole enforcement system. Part 2 of the bill responds to recommendations from the Parliament, the working group and the consultation exercise that we should treat domestic and commercial situations differently. The new means of enforcement, which is known as attachment, will be available for use, except in a person's home, and will most often involve assets held in a place of business where recovery must meet unpaid business debts. The Parliament made it plain that enforcement was necessary in such circumstances and that firm arrangements should be retained. We have done that in the bill not just for creditors, but for decent ordinary working people who pay their bills and are fed up with seeing chancers get away with it.
Part 3 of the bill introduces an entirely new court procedure for obtaining an exceptional attachment order. It is called "exceptional" because it is exactly that. The bill is designed to ensure that, in domestic cases, an order will be available only in exceptional circumstances. We have taken numerous steps to ensure that an order will be granted only as the exception in the few can-but-won't-pay cases. The provision is specifically designed to ensure that all but the exceptional cases are filtered out. The process is geared to reducing the numbers involved at each stage until only the few difficult cases are left.
Perhaps the process can best be illustrated as a journey that has various stages and stops. We will give people the exit signs that they need to end their journey through, for example, the provision of free, accessible expert money advice, which will be available before any type of court and enforcement action becomes a possibility; the debt arrangement scheme; and the advice and information package, which will be compulsory when enforcement action is threatened and will signpost the way to money advice and the debt arrangement scheme. When enforcement action is taken, it will not be possible to proceed unless opportunities for money advice have been given.
There will also be an opportunity to give information in a voluntary declaration and to have a lay representative explain circumstances. Money advisers have repeatedly told us that it would be helpful if they could represent their clients in court. Furthermore, enforcement action will not be allowed unless it can be established that assets are involved that are not everyday necessities and that have a genuine value towards meeting the debt.
There is also the possibility of a home visit from a money adviser, even for people faced with action who, for whatever reason, find it difficult to deal with their situation. That will ensure that, before an order is granted, it genuinely relates to someone who refuses to pay and not to someone who is in real difficulty. By taking those steps, we will ensure that only the tiny minority of people who can pay, but go out of their way to refuse to do so, will have the exceptional order granted against them.
We arrived at that new approach through a recognition that one size cannot fit all and that a horses-for-courses solution was needed. The working group quickly realised that we did not require an intimidatory tool. Most debtors want to pay their debts but need help in finding ways of managing how to do so. We should not forget that failing to find a way through means that creditors end up wasting time and money pursuing debtors through the court and enforcement action. Some might even withdraw access to credit.
Like the working group, the Executive wanted to provide an incentive for other solutions before the enforcement route was used. We were particularly anxious to ensure that people who wanted to pay their debts and who had the means to do so would not be caught up in enforcement when other solutions were possible. The other solutions are in the bill, which represents the humane and workable alternative that we were looking for.
The Social Justice Committee has raised some points that the Executive will systematically address as we work through the next stages of the bill. If the Parliament approves the general principles today, it will take a decisive step towards tackling the problems of financial exclusion as well as addressing enforcement issues in the civil justice system.
Those who oppose the bill and imply that there is a cost-free alternative are doing the working families of Scotland a great disservice. I know as well as any other member in the chamber that the ordinary working people of Scotland insist that people must face up to their financial responsibilities. We cannot create a debt enforcement system that can be avoided and exploited. We welcome the widespread support for the bill's general principles. We are responsible elected representatives in a responsible Parliament and we will deliver for the working people of Scotland.
I move,
That the Parliament agrees to the general principles of the Debt Arrangement and Attachment (Scotland) Bill.
The Scottish Executive has made it clear that it intends the Debt Arrangement and Attachment (Scotland) Bill to fulfil its commitment to provide a workable but humane alternative to the enforcement procedure of poindings and warrant sales. The Executive also intends the bill to implement the recommendations of the working group as outlined in the report "Striking the Balance: a new approach to debt management", which was published on 6 July 2001.
Proposals in the bill include a statutory national debt arrangement scheme to help people to repay debts in a managed way free from the threat of enforcement action; new incentives for debtors and creditors to reach negotiated settlements out of court; a new, less intrusive enforcement procedure that will target only those people who can pay but will not; and provision of money advice and information in court within the court process.
On 15 November 2001, Ian Brown, spokesperson for the citizens advice bureaux, said that current legislation does not protect consumers from unscrupulous companies. He related the story of a single parent on income support who was told that, if payment was not forthcoming, the bailiffs would be round within 72 hours to lift the beds and that she should not have children if she could not afford them. After the bill is enacted, such situations must become a thing of the past.
Scotland's current debt collection regime takes no account of individual need and fails to address multi-indebtedness. People in debt feel shame. They are powerless to stop debts increasing, no matter how hard they try to pay them off. Debtors experience complex legal rules, limited assistance with unpredictable costs and variable availability and quality of help. They need better advice and information.
Who is in debt? Not surprisingly, it is often the poorest and most vulnerable in our society. For example, an article entitled "Labour accused of victimising poor over social security loans" in The Independent explained that
"people refused social fund loans are most at risk of falling into debt and into the hands of the loan sharks."
Benefit deductions for repayment of social loans affect 1.22 million income support claimants in the United Kingdom. The largest group consists of disabled people and lone parents.
Each year, debt increases. In 2001, citizens advice bureaux in Scotland dealt with 160,000 cases. Indeed, 71 per cent of agencies report an increase in case work every year and debt now averages £4,500 per debt-advice client in Edinburgh.
As the minister said, people want to pay their debts. However, when the system traps them in a cycle of poverty, it is the system that is at fault, not the debtor. The SNP agrees with the broad policy objective of the bill—the need for negotiation and voluntary agreement without resort to enforcement.
Although we do not want to throw the baby out with the bath water, we have major concerns about the practical difficulties of some of what has been proposed. Fears have been expressed about the ability of the bill to separate those debtors who cannot pay from those who will not pay. Other fears include the need to obtain the consent of all creditors before a debtor is accepted on to the debt arrangement scheme. Notwithstanding the minister's comments, the SNP is also unhappy about the proposed exceptional attachment order. We believe that the bill does not adequately address summary warrants and their usage, given that they contravene article 6 of the European convention on human rights, an issue on which my colleague Colin Campbell will expand.
It has not escaped our notice that, at present, debtors south of the border have better protection from undue harassment by creditors. We would like Scots to enjoy the same level of protection. We must promote independent advice agencies in tackling debt and poverty in Scotland and we must fund capacity to make a difference. It is vital to establish triggers at various stages of the debt recovery process to prompt debtors to seek early independent advice. We must introduce independent in-court advisers to every court in Scotland and compel loan firms and creditors to inform debtors of their rights before proceeding to diligence.
The SNP endorses in principle the proposals for the introduction of a national debt arrangement scheme and recognises that it is supported by Money Advice Scotland and other organisations.
In written evidence to the Social Justice Committee, the Scottish sheriff court users group noted:
"The introduction of a debt arrangement scheme could provide the cornerstone for an effective system of debt collection in the 21st century."
However, concerns were expressed about the lack of detail in the bill relating to the debt arrangement scheme. For example, the Law Society of Scotland said that it was
"concerned that a number of fundamental matters are to be dealt with by way of regulations, particularly when it is intended that these regulations will be subject to negative resolution procedure only."
Citizens Advice Scotland suggested that the vast majority of its clients with multiple debt problems would be unable to meet the criteria set out in the consultation document. As Mr Sheridan has mentioned, Money Advice Scotland stated:
"About 70 per cent of the clients who come to us for debt advice would not benefit from the scheme as it is currently set out."—[Official Report, Social Justice Committee, 12 June 2002; c 3003.]
Does the member agree that the concern of Citizens Advice Scotland and Money Advice Scotland is that the exclusion of their clients from the debt arrangement scheme will lead to their being subject to exceptional attachment orders?
That is a major concern of the SNP as well, as I shall outline in due course.
Organisations such as Money Advice Scotland, Citizens Advice Scotland and Debt on our Doorstep agreed that the scheme should allow for the composition of debts and the freezing of interest. The SNP concurs with that and seeks assurances from the minister that that will be seriously considered. In giving evidence to the committee, Citizens Advice Scotland argued:
"The important issue is not simply the length of time but whether composition of debts will be allowed and whether interest is frozen. The way in which those things are combined will be what makes the bill effective or ineffective."—[Official Report, Social Justice Committee, 12 June 2002; c 3000.]
I agree that there should be composition of debts and that interest should be frozen. However, there is a practical problem in that some debtors will never be able to pay the debt. If they are to get even part of it paid, that would be to the advantage of the creditor and the debtor in a number of circumstances.
I fully agree with what Robert Brown has just said. Indeed, in the committee and during the debate on loan sharks, I mentioned the fact that some companies want people never to get out of debt but to keep paying interest ad infinitum. I told members about a company that offered me a credit card with a limit of £11,000, which I would have to pay off at £5 a month if I were daft enough to run up that much debt. I calculated that it would take more than 180 years to pay off the debt at that rate. As I do not consider myself to be immortal, I did not take up the kind and generous offer.
Another illusion gone.
Absolutely.
Meanwhile, back at the bill, debtors who can repay some money but have interest that exceeds or almost exceeds their repayments are often faced with a repayment schedule extending far beyond the lifespan of the debt arrangement scheme. The length of time to pay the debt must be more flexible and the freezing of interest must be possible if those debtors are ever to be debt free. As the Social Justice Committee report succinctly put it:
"The Committee would be concerned if the scheme was only open to those debtors who were able to repay their debts in full, including interest if demanded by creditors, within a 3-5 year period."
Section 2(4) of the bill says that a debtor's application for a debt payment programme has to incorporate the consent of all the creditors. However, section 7(2)(g) states that ministers might, by regulation, make provision about the circumstances in which
"the consent … of a creditor or creditors generally may be dispensed with".
Citizens Advice Scotland argued that
"creditors can be less than co-operative when trying to negotiate a manageable debt repayment programme"
and that
"there is little incentive for creditors to actively co-operate in respect of the proposed arrangement".
It is important that creditor consent is implicit rather than explicit and allows consolidation, rescheduling and repayment of multiple debts at a level that the debtor can afford. Placing a cash ceiling on the debt that a person may have prior to entering the scheme is unhelpful and will exclude many who wish to clear themselves of debt.
The SNP strongly believes that the national debt arrangement scheme will work only if advice is provided by properly trained independent money advisers. We welcome the fact that the bill recognises that.
One in five people are in arrears with household expenses, but the majority do not seek any advice, even when the debt proceeds to court. Research has revealed that six out of 10 people with problem debts sought no help or advice, even from family or friends. Only one in five made contact with their creditors and only one in three consulted a formal adviser, most often an independent advice agency or bank manager. Those who had sought advice said that it had made a significant difference, that advisers could often negotiate an agreement where they had failed and that a welcome barrier was placed between the creditor and them.
Further research has shown that the rent arrears of those who did not seek advice rose by more than 100 per cent compared to 25 per cent for those who did. The detailed picture of a client's finances drawn up by debt counsellors can allow creditors to see the most effective ways of recovering a debt.
The independent nature of the advice that is given is crucial and provides a balance in the relationship between debtor and creditor, as it is critical that the debtor trusts that the adviser will act only in his or her best interest. Debt on our Doorstep and Citizens Advice Scotland highlighted the fact that the bill does not state that the money adviser should be independent, which means that a money adviser who is employed by a local authority could be giving advice to someone who is in debt to that local authority in respect of council tax or rent arrears. Although local authorities might give impartial advice on the issue—I believe that they do—they might not be perceived to be doing so.
The Executive has allocated £3 million in resources to fund 75 additional money advisers, with £500,000 for training. Additional resources are to be welcomed, but that money is seriously inadequate for the demands that may be placed on money advice services if the scheme works as it is hoped. That money should be considered as a first step, rather than as a last one. Recognising the importance of money advice, the SNP notes that trust in advisers can come only from clear independence, good training and adequate numbers of trained advisers for the various roles that are envisaged.
I am sure that many members will agree that some of the principal concerns about the bill relate to exceptional attachment orders, which have been called, in some circles, poindings and warrant sales by another name. In evidence to the Social Justice Committee, Citizens Advice Scotland said:
"we remain opposed to this form of diligence."
The Scottish Association of Law Centres believes:
"Exceptional Attachment Orders are not exceptional enough."
Significantly, the Society of Messengers-at-Arms and Sheriff Officers described section 46(2)(a) as "unworkable in practice", further commenting that it would lead to
"unnecessary confrontation between the officers executing the attachment and the debtor … The officer would require to arrange transportation prior to every visit, with no precise idea of what non-essential assets, if any, are going to be attached and removed."
The firm of John Campbell, messengers-at-arms and sheriff officers, described the exceptional attachment proposals as
"draconian, harsher for debtors than the present legislation. Many of the protections and ‘diligence stoppers' which presently exist for debtors and third parties will be lost."
The submission continues:
"It is not clear how a creditor will be able to establish the exceptional circumstances under which the above order can be applied for without access to the debtor's assets to ascertain what the debtor's circumstances are. In addition to this there is no provision for what happens when an exceptional attachment order is breached."
The SNP would have urged the minister to ditch exceptional attachment orders at stage 2. However, this morning it was made clear that that may not be possible. We are disappointed that, to date, the Executive has been unwilling to make it mandatory for sheriffs to decline the granting of an exceptional attachment order where it is known that the debtor is directly or indirectly in receipt of income support, income-based jobseekers allowance, working families tax credit or disabled persons credit. Deleting part 3 of the bill would have made such distinctions unnecessary.
Will the member give way?
I would like to take an intervention, but I have only two minutes left and I have a lot to pack in.
The Scottish Consumer Council said:
"The issue of summary warrants is not addressed in the Bill. In our view, this issue is central to the proposed new system."
In a similar vein, the Institute of Credit Management stated:
"We made a recommendation through the working group that the summary warrant system should be reconsidered. It is probably true to say that the summary warrant system is why we are here today. It requires serious review if we are to go forward."
Also in oral evidence to the Social Justice Committee, the Scottish sheriff court users group stated:
"It is vital that council tax collection under the summary warrant procedure is included in the debt arrangement scheme."—[Official Report, Social Justice Committee, 12 June 2002; c 3008.]
It was also noted that the Executive should give more consideration to summary warrants. "Striking the Balance" recommended that
"the Executive should give further consideration to its policy on recovery of unpaid council tax and the use by local authorities of summary warrant procedure. The Executive's diligence review should take on board the Scottish Law Commission's recommendations for introduction of debtor protections within the court and enforcement processes for summary warrants."
In written evidence, the Executive stated that its consultation on "Enforcement of Civil Obligations in Scotland"
"was not considered the appropriate context in which to address the merits of whether summary warrant procedure should be available for use and by whom. Those principals are primarily for local government policy interests."
The Scottish Consumer Council argues that there are natural justice and ECHR issues in relation to the summary warrant procedure. It suggests that
"all debtors should be treated in the same way, whatever the reason for the debt."
The SCC also argues:
"summary warrant procedure may be found to contravene Article 6 of the European Convention on Human Rights (the right to a fair hearing), and is therefore subject to challenge under the Human Rights Act 1998."
On that basis, the SCC would
"like to see the abolition of the powers of local authorities to obtain summary warrants for council tax and community charge arrears."
The Executive must make it clear that it is truly committed to abolishing poindings and warrant sales in whatever guise. The SNP will seek to make radical changes at stage 2 should the Executive not do so.
I begin by declaring an interest as a member of the working group that was established by the Deputy First Minister and Minister for Justice to seek a workable and humane alternative to poindings and warrant sales. As a member of that working group, I speak in support of the bill that Margaret Curran has introduced today. I believe that it balances the legitimate concerns of those who supported Mr Sheridan's member's bill with a clear need for an alternative form of diligence against moveable property. As can be seen from the report "Striking the Balance", the working group was broadly based. I regret that neither the Scottish National Party nor Mr Sheridan saw fit to participate in its deliberations. That Mr Sheridan would prefer to retain his ideological purity and not engage in finding a practical solution to a complex problem came as no surprise, but the SNP boycott was disappointing, given that the party constantly proclaims its desire to assume the burdens of government.
Will the member give way?
I will give way to Christine Grahame in a second.
One of the burdens of government is the duty to find solutions to problems such as this. The SNP's abdication of responsibility says a great deal about its political maturity—or lack of it.
I remind David McLetchie that, during the debate of 6 December 2000, Phil Gallie said that the Conservative party
"would not stand against the principle of getting rid of poindings and warrant sales."
When challenged in that debate, Mr McLetchie admitted that in putting a diligence against moveable property and an attachment
"there is no point in kidding ourselves"
and agreed with me that
"That would be poinding and warrant sale by another name."—[Official Report, 6 December 2000; Vol 9, c 668 and 646.]
That is why Mr Sheridan and I left the working group—the attachment is a replacement not an alternative.
Christine Grahame is playing with words. It is a workable and humane alternative. As I will explain, I have always believed that there has to be, in exceptional circumstances, a last-resort method for attachment of moveable property in satisfaction of debt. That is the view of the Parliament as a whole.
It ill behoves Mr Gibson to come to Parliament and, in an otherwise balanced and reasonable speech, express a lot of practical concerns about detailed measures in the bill, given that the SNP did not participate in any of the detailed deliberations that took place over many meetings. Had the SNP done so, we might have had a better bill and many of the concerns that Mr Gibson has expressed might have been expressed in advance.
I have noticed that the Conservative party has much to say about the Scottish Parliament building at Holyrood, yet it is still boycotting the Holyrood progress group. In view of the principle that Mr McLetchie has just enunciated, will the Conservative party be adding a member to the Holyrood progress group?
Will the member give way?
I can take only one question at a time. As we have made clear on several occasions, the reason why we are not participating in—or as John Home Robertson puts it, boycotting—the Holyrood progress group is that from day one of the Parliament, the Scottish Executive has constantly boycotted and abdicated its responsibility for that folly down the road. The day that the Scottish Executive accepts that financial responsibility is the day that we will join John Home Robertson's group and be happy to participate. If he gets his side on board, I will get my side on board.
I hope that we can get the debate back on track.
Is it Mr McLetchie's understanding that the working group considered a compulsory sale order as an alternative to poindings and warrant sales? Will he clarify whether the compulsory sale order has become the exceptional attachment order, or whether the compulsory sale order has disappeared altogether?
I am sorry, but I do not understand the detail of that question. Mr Sheridan will have to give me more illumination.
That was the group's recommendation—a compulsory sale order.
Again, we are playing with words.
I think not.
I am afraid that we are. We did not support Mr Sheridan's bill to abolish poindings and warrant sales because we believed that it was irresponsible to do so without having an alternative in place and because we recognise that there has to be a last-resort measure if we are to maintain the viability and effectiveness of our system of debt enforcement. It took some people quite a long time to wake up to that reality—there are some people who will never wake up to it.
We all know that Mr Sheridan has a keen interest in the issue of poindings and warrant sales. However, that does not excuse the irresponsible manner in which he has conducted his campaign in the past. He and all the other "can pay, won't pay" people have undermined the principles on which a liberal democracy is based. Those principles are that we accept the law of the land and abide by it—not because we agree with every law, but because we accept both the law as it stands and the law reform process. The flagrancy with which Mr Sheridan and his like have breached those principles makes the member unfit to be a lawmaker.
Such conduct undermines the rule of law on which our civilisation depends and is contrary to the interests of the vulnerable people in our society of whom Mr Sheridan likes to think he is the sole champion. Many of those people see him breaking the law and think that it is acceptable to follow his example. Mr Sheridan has also made it easy for them to justify such behaviour to themselves, because he absolves them of their individual responsibility—he tells them that it is not their fault and that they are simply victims. Such a doctrine may find favour in some quarters, but it is corrosive for a free and democratic society. It leads to a system in which we are all free to pick and choose which laws we obey. That is a sure recipe for anarchy. In a lawless society, vulnerable people suffer the most.
A free society is founded on individual responsibility. To argue otherwise is either naive or self-serving. We can all choose whether to obey the law or to break it. Where credit arrangements are entered into freely and legally, there is a clear obligation on the debtor to repay their debt. Failing to do so was regarded as not only legally but morally wrong. That principle was accepted by generations of people from all walks of life in Scotland, because they understood that it was in the interests of society as a whole. Trying to undermine it does no one any favours.
The Abolition of Poindings and Warrant Sales Act 2001 offered no alternative system for collecting debts, which demonstrates that it was not a serious attempt to tackle the issue of debt but a piece of political showboating and grandstanding.
Does the member accept that there is a plethora of means for collecting debt, including arrestment of wages, arrestment of bank accounts, arrestment of benefits and sequestration? Does he accept that those provisions are in place and that to suggest that there are no means for recovering debt is to mislead Parliament?
At the beginning of my speech, I said that a variety of means for enforcing payment of debt were needed. In virtually every civilised society and jurisdiction, one of the mechanisms that is approved for doing that is the attachment of moveable property that falls into certain categories. The idea that Scotland should be different in that respect is barking mad.
As a last resort, it must be possible to attach goods with significant commercial value to satisfy debts that are owed by their owner to his creditors. The exceptional attachment order is such a last-resort measure. There are sufficient safeguards in the bill to ensure that in the domestic setting exceptional attachment orders will be very much a last resort.
Will the member give way?
I will give way to Brian Adam, as he sought to intervene first.
Does the member accept that the principal role of poindings and warrant sales is to threaten and harass those who are unable to pay or who refuse to pay? Does he think that exceptional attachment orders will be different? It may be more difficult to obtain them, but will they not also be used to threaten and harass those who cannot pay?
On the basis of the evidence that was given, I accept that there are instances of harassment. People with multiple debts, in particular, feel threatened and buffeted by their creditors. That real concern is reflected in the findings of the working group and in the bill that has been produced. A number of safeguards have been included in the bill to ensure that attachment orders are obtainable only in exceptional circumstances and as a last resort. I do not accept that they will be used to harass people, as Brian Adam suggests was the case with poindings and warrant sales.
We believe that the people who have most to gain from an effective system of debt recovery are the most vulnerable people in our society. If there were no means of ensuring payment, it would be far harder for many people to obtain credit, which has done much to raise their standard of living and to improve their quality of life. Our overall economy would also suffer, harming us all. Without a full range of means for enforcing payment, the poor record of Labour authorities in collecting council tax would be even worse. That might have grave consequences for those who rely most on local public services, who are overwhelmingly the poorest and most vulnerable people in our society.
Because I was prepared to accept that we could improve on the current system, I agreed to serve on the working group. The group has devised a system that is an improvement on its predecessor and that addresses the legitimate concerns of many supporters of the bill, even though it will never satisfy the wearers of ideological blinkers.
I did not support the Abolition of Poindings and Warrant Sales Bill because it offered no alternative means for enforcing payment of debts, but the debate surrounding the bill identified some real problems. Many people in Scotland with multiple debts are no longer able to cope with their problems. They feel buffeted and harassed by their creditors—as Mr Adam pointed out—and have a real need for guidance in resolving their situation, at the same time as they try to face up to their responsibilities. I became convinced of the scale of the problem during the working group's deliberations, which demonstrated that there was a clear need for a new system of debt management such as that for which the bill provides.
Under the national statutory debt arrangement that part 1 of the bill establishes, people with multiple debts will receive support from money advisers, so that those debts can be repaid in a managed way over a specified period. During that period, enforcement and sequestration action will be prohibited.
I know that—very properly—some of the lobbying organisations to which Mr Gibson referred have expressed concerns about practicalities. Reference has been made to the potential conflict of interest of someone who both advises the debtor and is seen as a procurer of payment on behalf of the creditor or creditors. That is a potential problem if the adviser is perceived as acting exclusively in the interests of the debtor. However, I see the adviser's role as more akin to that of a mediator who acts in an even-handed manner towards both debtors and creditors, with the aim of achieving a mutually desirable and desired outcome.
Many will see the bill—and, in particular, exceptional attachment orders—as warrant sales by another name. There must be a means of enforcing payment. However, the bill goes to great lengths to ensure that exceptional attachment orders are in every way a last resort and will never be granted without attempts to reach an appropriate solution for creditors and debtors. The bill strikes the right balance between consideration for those who cannot pay and strict action against those who can but wilfully refuse to do so. I have not a jot of sympathy for the latter. There is a world of difference between the two groups. I am satisfied that those who are unable to pay will be filtered out of the system so that they are not subject to attachment action and can be helped through their financial predicament.
The Abolition of Poindings and Warrant Sales Act 2001 failed completely to deal with the issue of those who are able to pay but choose not to do so. It is naive and irresponsible to deny that such people exist. There must be an effective sanction to prevent them from abusing the system. That is why we need the bill. It is why the Scottish Conservative party supports the bill and is pleased to play a full and constructive role in its genesis. I support the motion.
I begin by declaring an interest. I am a member of the Law Society of Scotland and have a consultancy with Ross Harper solicitors.
I welcome David McLetchie's recruitment to the ranks of those who take the liberal view on a number of issues. In many respects his speech represents a valid and helpful contribution to the debate. It provided a timely reminder of the principles on which civil society and the rule of law are based.
The law of diligence in Scotland is a curious hotch-potch of old law with a few modern patches—of arrangements made originally for a very different, more rural society. It is a preserved area of historic, unpronounceable and often meaningless phrases such as poindings, keyhole citation, and heritable and moveable items.
The people who administer the system, such as sheriffs, sheriff officers and messengers-at-arms also hold offices whose origins are in the earliest days. Technically, many aspects of the system work well and we should be careful about changing those without understanding them in case we produce something more bureaucratic, costly and oppressive. That has resonance with regard to some of the detail of the exceptional attachment order, to which I will return later.
The old system was not designed to work in an age of consumer credit, where people are inundated recklessly with invitations to achieve the dreams of a lifetime by getting up to their eyes in debt, and where basic household goods, which category now reasonably includes televisions, telephones, fridges and washing machines, are bought routinely on credit.
The Debt Arrangement and Attachment (Scotland) Bill, which builds on the work of the working group that produced "Striking the Balance", is part of the answer. Many strands have come together in the bill, such as the work of the Scottish Law Commission, the experience of lawyers and sheriff officers, the work of voluntary groups and campaigners who are involved in debt work and the experience of those who see the misery of poverty and multiple debt in our constituencies and want to do something about it. As a lawyer, former CAB chair and Glasgow MSP, I fall into a number of those categories. Like David McLetchie I think that it is a matter of regret that members of the SSP and the SNP did not see fit to take part in the group that considered the proposals.
I am clear in my mind, as were members of the Social Justice Committee, that the bill is founded on proper principles that will stand the test of time. The ministers and those involved deserve congratulations on the way in which they have worked to produce a liberal and modern structure.
I turn to the principles of the bill. The first principle is that people should honour their contracts and pay their debts. The Justice and Home Affairs Committee's stage 1 report on the Abolition of Poindings and Warrant Sales Bill stated:
"the law must provide enforceable mechanisms for the recovery of debts freely and legally entered into and that any mechanism for the enforcement of debt necessarily involves a degree of coercion."
When I listen to debates such as this I sometimes think that people do not really understand the purpose of the law, which is to set a standard and enforce it in suitable instances. That background to the debate is in all our interests.
Ultimately, unpaid debts are paid by others in the form of higher commercial and consumer charges, higher tax bills or a reduction in services. People see that clearly in the context of the council tax and we have heard views from councils throughout the land about the problems that they will face if council tax is not collected. Most people acknowledge that and realise that laws are there to compel people to act reasonably.
The second principle is that enforcement should be carried out in accordance with the principle of least coercion. Linked to that, by way of an exception to the first principle, is the key distinction between those who cannot pay and those who will not pay. The next principle is that there should not be loopholes in the law through which those who can pay but wish to avoid doing so can escape. That is where there requires to be a diligence against moveable property which, as a number of members have said, exists in all civilised legal systems.
The bill rightly acknowledges distinctions between private debt and commercial debt and between a diligence that seizes an item outside the home, such as a motor vehicle, and a diligence that requires forced entry to a home. A Scotsman's home—or Scotswoman's home—is, like that of an Englishman, his castle and rightly so.
There are significant issues to do with the detail and working of the bill, one of which relates to the welcome provision for debt advice and the independence of the advice that is available. Members will see from the last page of the Social Justice Committee's voluminous stage 1 report that the committee agreed by division to insert in the report a paragraph that I proposed on that subject. My clear view is that the Executive should have taken the opportunity to reinforce the infrastructure by resolving the core funding of citizens advice bureaux throughout Scotland, because they are the main independent advice agencies. There are of course legal advice agencies throughout Scotland, but Citizens Advice Scotland is the major national body. The Executive should build the new money advice provision on the basis of a solid management structure.
The issue of independent advice is not academic. I instance two situations. The first is that money advice must include advice on debt from council tax and rent to the council. Money advisers within councils can erect Chinese walls, but there is a problem with the real and perceived independence of in-house council money advisers. There is a view that payment for debts such as those for council tax, rent and fuel bills should take priority.
Hugh Henry, the Deputy Minister for Social Justice, said in his letter to the Social Justice Committee of 31 August that he had been assured that in-house local authority money advice provision does not prioritise the recovery of debt that is owed to the council as that would be in conflict with good standards of money advice. The minister might be right on that, but that is not my understanding. A council money adviser told me that the council prioritises such debts precisely because that is good practice. I hope that I do not misrepresent the position of Citizens Advice Scotland, but I believe that it takes the same view on how it deals with debts for the good reason that council and fuel debts are not just past debts, but recurrent, continuing and future debts, which have to be dealt with in a fashion that takes account of that. When, as a lawyer, I worked in a limited way on debts I would have adopted the practice of prioritising such recurring debts. There seems to be an important and unresolved issue about who gives money advice.
If citizens advice bureaux acknowledged that the debt was recurring, it would be logical for them to recommend that it be addressed first, so there would be no distinction between the advice given by citizens advice bureaux and public sector money advice. The point that Robert Brown made about independent advice would be valid only if the citizens advice bureaux and the council gave different advice.
I accept Johann Lamont's point in principle, but we still have to consider the detail of how much is attributed to the recurring debts and what the balance is between debts. There is an inherent conflict of interests that has to be acknowledged, because I do not think that it has been overcome.
The view of Citizens Advice Scotland is that money advisers should be independent to ensure that as many people as possible are attracted to seek advice on their debt situation. The perception as well as the reality of the independence of the advice is an issue.
There is also a need for a clear distinction between the adviser and the monitor, because that is not entirely clear from the bill at the moment. The Executive has not taken fully on board the fact that if Citizens Advice Scotland has to act in a double capacity, that might cause problems for its principles of independence. The Deputy Minister for Justice might reassure us on that matter in his summing up, but we have to examine it closely when we consider the detail of the bill.
I have no particular difficulty with the principle of creditor consent, but it must not be absolute—I think that it might be dealt with in regulations later. It certainly should not be the case that one or two unreasonable creditors, perhaps for the reasons that Kenny Gibson outlined, could hold up debtors' entry to debt arrangement schemes. The ministers will have to reassure us on that point as the bill develops. There is a nuance in whether debtors have to show explicit acceptance or whether they can get by on the implied acceptance on which money advisers rely at the moment. If debtors do not object, they are taken to be giving their consent. Progress should be made on that matter.
I have no difficulty with the principle of the exceptional attachment order, but people on the ground who will have to deal with the practicalities of the order have drawn our attention to several issues in the detail. One such issue is the immediate removal of goods when the sheriff officers call. That is unduly bureaucratic and harsh and has practical difficulties, because every time the sheriff officers attend, they will have to have the van in attendance, with all the consequent expense. That system is not satisfactory and we should bear in mind the sheriff officers' comments on it.
The second issue relates to summary warrants. One of the things that most impressed me, and other members, about the evidence that was taken on the Abolition of Poindings and Warrant Sales Bill was the fact that council tax creditors, rather than private creditors, were identified as the principal issue. The idea of a summary warrant has always seemed objectionable in principle. We must examine whether there should be a charge for payment or some in-between mechanism before councils are allowed to go ahead with summary warrant procedure.
I agree with Kenny Gibson's comments about the composition of debt and freezing of interest for the practical reason that many debtors are not able to pay the full debt. It is better from everyone's point of view to freeze the interest on the debt and to allow repayment to take place over a realistically manageable period. That point should be taken account of.
It is important to have the debt arrangement scheme register, which I think the bill provides for. There must be a clear and distinct system that is readily accessible to creditors if that aspect of the proposals is to work.
I draw attention to the advertisement of the scheme. It is important to get on board as many people as possible. All the other systems have failed because, whatever the legislation said, people did not know their rights on the issue. Mechanisms must be put in place to ensure that advice is available and that people know where to find it.
Finally, I want to discuss the use of subordinate legislation. As we go through the bill, we must endeavour to ensure that people's rights, the principles of those rights and the procedures that have to be gone through are, as far as possible, included in the bill. That is an important element in ensuring that people have access to arrangements of the kind that we are discussing.
In spite of the reservations that I have made, I believe that the bill will give Scotland the most comprehensive and liberal system of debt collection in western Europe. I welcome the bill and I look forward to stage 2 consideration. The bill, with one or two amendments, will be a major contribution to the advancement of a proper concept of civil society in Scotland. I support the bill.
We move to open debate. I will allow five minutes for speeches at this stage, plus time for interventions. That period will shorten later.
In its current form, the Debt Arrangement and Attachment (Scotland) Bill is no more than a dog's breakfast—it is messy and incomplete and it exposes the Executive's overriding concern, which is to placate the legal establishment and the credit industry rather than properly to humanise and modernise debt recovery for 21st century Scotland.
There are so many ifs, buts and holes in the bill that hereafter it should be referred to as the tea-bag bill. The legal establishment might well like the taste of it, but it will leave a poor taste in the mouths of those who fought so long and so hard to rid Scotland of the degrading practice of warrant sales.
The declared will of the Parliament is under threat. More than two years ago, the Parliament defied the Labour and Liberal Executive and the Tories, who all wanted to keep warrant sales. The Parliament voted to abolish warrant sales.
The bill introduces a diligence that is to be used against a debtor's household goods. It will be granted by a sheriff, on application by a creditor, and will be know as an exceptional attachment order. It was formerly known as a compulsory sale order and, before that, as warrant sales. The exceptional attachment order will allow sheriff officers to force entry to a debtor's home and to remove certain household goods. If those goods are not redeemed within seven days, they will be sold at a public auction. Poindings have certainly been abolished, but warrant sales remain in the guise of the exceptional attachment order.
As I mentioned, exceptional attachment orders were to be called compulsory sale orders. If Mr McLetchie had paid any attention to the "Striking the Balance" report, he would have known what I was referring to. Exceptional attachment orders were called compulsory sale orders before the Labour spin-doctors got hold of them and realised that they did not sound very good. They thought that they had better change the name to sweeten the pill.
There will be nothing exceptional about exceptional attachment orders. They will be used as a tool of fear and humiliation against ordinary debtors, just as poindings and warrant sales were used.
The member is seeking to misrepresent the content of the bill. Does he not agree that exceptional attachment orders will be exceptional in that they will be used only against those people who can pay and will not pay? A good socialist principle—and a principle of the working classes—is to pay one's way and to take care of people who cannot afford to do that. Mr Sheridan appears to be in favour of a debtor's charter for the chancers who will not pay—we all know that they are out there.
I thank Cathie Craigie for bringing me nicely to my next point.
Will Mr Sheridan answer the point?
I will answer it, if the member will allow me to.
Cathie Craigie claims that I am misleading the Parliament. I will not quote Cathie Craigie, because she does not deal with the problems at the coalface. Citizens Advice Scotland deals with the problems at the coalface. Let us quote Jim Melvin of Citizens Advice Scotland, when he gave evidence to the Social Justice Committee. He said:
"It will depend on how the bill works out, but I feel that the majority of our clients will not be able to take advantage of the debt payment programmes in their present form. That is very worrying."
For whom is it worrying? It is worrying not for well-paid Executive ministers but for the thousands of low-paid workers who are in debt. People say that the bill should be changed. Of course it should be changed—it is full of holes.
Susan McPhee of Citizens Advice Scotland said:
"We worry that exceptional attachment orders will be used as a threat to force people to pay when they cannot."
I am not seeking to mislead the Parliament. I am giving the opinion of those who deal with the issues day in and day out.
In her evidence to the Social Justice Committee, Pauline Allan of Money Advice Scotland said:
"If the exceptional attachment order is retained, we also have concerns about the fact that the proposed process for poinding some goods is one stage shorter than the previous process. As a result, it is worse than the old poindings and warrant sales. For example, goods can be taken away immediately and only seven days have been allowed for the person or a third party to have the item removed. That increases the threat."—[Official Report, Social Justice Committee, 12 June 2002; c 2992-2993 and 3013.]
She also said that about 70 per cent of Money Advice Scotland's clients would be excluded from the debt arrangement scheme, which will open them up to the threat of so-called exceptional attachment orders.
The Social Justice Committee highlighted that problem as an issue. Does the member accept that the problem is not to do with the principle of exceptional attachment orders? If we could establish that exceptional attachment orders would apply only to those who can pay but who choose not to, would the member support the orders? The kind of people who decide not to pay when they can pay are often the kind of people who are hostile to ordinary working-class people, rather than being such people themselves.
After his reply, Tommy Sheridan will have one minute.
The simple answer to the member's question is no. [Interruption.] I am trying to answer the intervention—I know that the minister is not used to that.
The reason for my opposition to any attachment of a debtor's personal household goods is that I do not believe that it is possible to differentiate between those who can pay and those who cannot. More than enough measures are available in respect of wages, banks and benefits to allow the resources of those who—in the member's opinion—can afford to pay their debts but refuse to do so to be attached.
Will the member give way?
I am sorry, but I am in my final minute.
He has had more than seven minutes.
I know that Duncan McNeil is not used to the concept of taking interventions, but it is because I took them that there is no time left.
The debt arrangement scheme is full of holes and a thorough overhaul of the bill is necessary, which would involve major surgery. There are many unresolved issues in the scheme, such as whether interest will be frozen. Provision for the composition of debts and questions such as whether the upper limit on debts will be £5,000, £10,000 or £15,000, whether there will a lifespan for the payment of the debt, and whether it will be three, five or seven years, still have to be addressed.
No members of the Executive are aware of the answers to those issues. Until the Executive is aware of them, those we seek to protect will be the very people who will be exposed to the so-called exceptional attachment orders. That is why the bill as it stands is no more than warrant sales by another name.
I call Trish Godman. She has five minutes, plus time for interventions.
Like David McLetchie, I must declare an interest, as I was on the working group that produced "Striking the Balance: a new approach to debt management". That report's recommendations form part of the bill.
On behalf of most members of the working group, let me also take the opportunity—as David McLetchie has done—to clear the air by saying that I believe that the SNP and SSP representatives did not give the working group a chance. At the second meeting, they informed us that they could not accept the remit of the working group and they withdrew. Most of the members of the working group were not politicians but people from organisations that worked each day with those who are in debt. All of us round the table were committed to rescinding poindings and warrant sales. To walk out on that group was deeply offensive.
Right from the beginning, the working group was clear that those who cannot pay must be helped in every possible way, but those who can pay must pay. We were clear that we had to find a final sanction against those who can pay but unreasonably refuse to meet their responsibilities. I believe that we have done that. We were also clear that a prison sentence was not an option.
The bill does not reintroduce poindings and warrant sales by another name. I have said publicly at meetings that I would never, ever sign up to that; neither would many of the Labour back benchers who spoke in the original debate. There is no way that I would sign up to anything that smacked of poindings and warrant sales. The question for those who will not vote for the motion is whether they believe that those who can pay, should pay. If they believe that, how do they propose to get such people to do so?
I cannot cover all the working group's deliberations, but I want to consider a couple of areas, the first of which is responsible creditor behaviour. We are all aware of the increasing availability of credit, which is clearly the root cause of many people's multiple debts. The working group examined the work that has been undertaken by the Department of Trade and Industry and recommended that the Executive submit proposals for reform in line with those of the DTI.
I ask the minister today to consider the possibility of having regular meetings with those who might be called the movers and shakers—the credit companies and banks who are the people who lend. In Australia, such meetings take place regularly both at state and federal level. People sit round the table and discuss who is lending, who is borrowing and how much it is costing. I also ask the minister to consider whether it would be possible to include information about credit unions in the information packs. It is important that we consider those seriously.
For the most part, people behave responsibly towards each other and pay their debts. If need be, responsible citizens will sell non-essential assets to meet their debts—as, I guess, we have all done. For the working group, that fact underlined the need for a means of enforcement against non-essential moveable assets. We needed a sanction for those who could but would not pay. There would be wholly justifiable public outrage if, having done away with the iniquitous poindings and warrant sales, the Scottish Parliament were to be seen to allow those with money to evade their responsibilities. That is not why I am here.
Will the member give way?
No. Tommy Sheridan did not give the working group a minute of his time, so he will get none of mine.
The Social Justice Committee is right to point out the need to find effective and innovative ways of communicating the advantages of the debt arrangement scheme for people in debt. We must ensure that, wherever possible, bills are not put behind the clock. That is a hard thing to do, but the Social Justice Committee has examined the issue.
The working group emphasised the need for early intervention in the shape of effective advice and counselling, which are at the heart of our report. There should be no stigma attached to seeking rapid help and support. We have all found ourselves in debt and, indeed, all who buy their own homes are in debt. We must be there to help those who find themselves in debt.
Will the member accept an intervention?
No, I will not. Mr Gibson's party did exactly the same thing that Tommy Sheridan did to the working group.
But the member has been given five minutes plus time for interventions.
Order. The member has said that she will not take an intervention.
If the new system is to be effective and humane towards people in debt and if it is to ensure a fair balance between the rights of debtors and those of creditors, there must—after all other avenues have been explored—be a last-resort action against valuable non-essential goods. Such an element is indispensable and we cannot get away from it. The bill will put in place a more humane method of debt recovery, which is based on the premise that those who cannot pay must be helped, but those who can pay must pay.
The working group also recommended that, when the bill is enacted and its provisions have finally been put in place, its procedures and regulations should be subjected to parliamentary review after three years.
I urge members to support the general principles of the bill.
I declare an interest as a member of the Law Society of Scotland.
I begin by apologising that I will be unable to attend the rest of the debate, as I must attend a ministerial meeting at 11 am.
In 1989, my wife Margaret Ewing introduced into the House of Commons the Abolition of Warrant Sales (Scotland) Bill. That is a useful starting point, because the SNP has always been committed to abolishing warrant sales.
Mr Sheridan mentioned those at the coalface. As a lawyer who was an insolvency specialist, I spent 10 years trying to prevent people who had incurred debt from being evicted from their house. I would try to make an arrangement, whereby the stress and misery that families experienced could be worked through, so that they could find some light at the end of the tunnel.
In my experience, people from all walks of life can face huge stress and pressure from debt. When parents incur debt, they can have feelings of guilt about not being able to look after their children properly and give them what they want. They worry about losing the house and so on. That is an horrific experience. Speaking from that experience, I want to make some positive suggestions about how the bill could be improved.
The minister set out the bill's basic premise, which is that warrant sales and their new replacement of attachment will not be necessary because of the debt arrangement scheme. If that is the thesis—I believe that it is—the debt arrangement scheme must work. As Trish Godman said, not only must it work, but it must be taken up and accepted as the way that things are done. Trish Godman suggested that there should be a body to represent all the players, which should include not only the banks and lending institutions but Citizens Advice Scotland and the people who give money advice. That is an excellent suggestion and is one of the solutions to the problem.
In my opinion, the current proposals are opaque, vague and incomplete. Every important question is avoided. Much of the work that was done by the Social Justice Committee shows the way that we need to go. It is totally impracticable for a debt arrangement scheme to require the consent of every creditor. That is an in-built failure. Not only will not every creditor consent, but most will not reply. That is what happens. That provision guarantees the bill's failure.
Some light at the end of the tunnel is provided by the fact that section 7(2)(g) provides that the creditors' consent may be dispensed with in some circumstances. That is good, but in what circumstances should that apply? Let me make a clear suggestion—this may not be perfect, but I think that it is fairly close to the mark. I believe that the regulations that will be introduced should provide that a debt arrangement scheme could be brought about if a majority of creditors—as measured by value—fail to dissent. That would be fair and is about as practicable as is possible. Some refinement to that proposal may be required, but I think that that approach may work.
Secondly, it is essential—although this is not stated in the bill, it is perhaps implied—that there should be a meeting between the money adviser and the debtor. If things are done over the phone, the debt arrangement scheme will be guaranteed to fail. Rarely will a debtor provide all the information about his debts at the first meeting. For example, most people do not regard a mortgage as a debt and so do not mention it. As a result, information is found out in instalments. Unless there is a meeting with a money adviser, the debtor will not reveal information about all the creditors, meaning that any debt arrangement scheme will be doomed to failure.
My third point is on the composition of debt and the freezing of interest and is perhaps the most difficult. Robert Brown touched on it and Kenny Gibson raised all the issues. In the report of the Social Justice Committee, it is stated that the money advice team of City of Edinburgh Council said:
"Given the nature and ratio of debt to disposable income in most cases, it would be impossible to fit them into a three to five year period, without allowing composition, or stopping interest accruing. We agree most cases should be dealt with in three to five years, but that will be improbable without discounting the debt and impossible if interest is allowed to accrue."
Can debt be written off? The issue is extremely difficult. Interest should certainly be frozen, but the answer is to be found in the Debtors (Scotland) Act 1987, which sets out two tables in relation to earnings arrestments. It shows the amounts that can be deducted from somebody's income each week or month. The calculation of what somebody can pay has already been done. That is the way ahead. We do not need to reinvent the wheel. That, or something like it, should be used as a yardstick to measure the amount that an individual debtor is able to pay without it affecting the essential requirements of life—the need to aliment children and look after family. The calculations that have already been done should be the key to any regulations that are introduced.
I do not wish to trespass on the Presiding Officer's patience. The bill is well intentioned. It may be that its ambition is too high and so impossible to achieve, but it behoves us to find the best possible solutions. Unfortunately, because of the 24 powers to introduce subordinate legislation, we have not yet seen the main course, but I hope that the Executive will take on board some of the comments that have been made in the debate and will introduce serious proposals to make the legislation work.
I, too, begin by declaring an interest, not as a member of the working group—because I had about as much chance of being invited to join that august body as I had of retaining my original membership of the Social Inclusion, Housing and Voluntary Sector Committee, which was zero—but as a co-sponsor of the original Abolition of Poindings and Warrant Sales Bill. I regret the fact that that bill is not yet law in this country. The debate so far has left me deeply unconvinced that the new bill—especially with its provisions for exceptional attachment orders—justifies the setting aside of the original bill. I will explain why.
I was struck by the names of those invited to give evidence on the Debt Arrangement and Attachment (Scotland) Bill, and by the absence of the community voices that played such an important role in the original bill to abolish poindings and warrant sales. I am thinking of groups such as the Lothian Anti-Poverty Alliance, the Communities Against Poverty Network, the Glasgow Anti-Poverty Project and others. I looked through annexe C and annexe D for their names, but could not find them anywhere.
I will give way to Johann Lamont to find out why they were not there.
I think that John McAllion will agree with me that the context for the Debt Arrangement and Attachment (Scotland) Bill was the acceptance that warrant sales and poindings had to go and that ordinary working people who were burdened with debt needed help. Our job was to establish whether the mechanisms in the bill met those aspirations. The voices of the community groups that Mr McAllion talks about were so powerful that the Parliament had already taken them into account. The Social Justice Committee wanted to challenge those who had to deliver support for those people as to whether they could do so or not.
I certainly agree with Johann Lamont that those voices were powerful. As I recall, during discussions on the original bill, it was the evidence of those community-based groups—and, in particular, the evidence of individuals within those groups who had witnessed and been at the sharp end of poindings and warrant sales—that swung the committees of the Parliament against poindings and warrant sales. The fact that those voices have not been heard on the replacement for poindings and warrant sales seems to me to be very strange indeed. If we are serious about empowering local communities, why were local communities not asked about the measures to replace poindings and warrant sales, which will affect them much more than they will affect any other group in Scotland? I deeply regret that they were not asked.
We are told that the replacement is not poindings and warrant sales by another name but a humane alternative to poindings and warrant sales. As I recall, the original Executive opposition to the abolition of poindings and warrant sales was based on a commitment that it would introduce a humane alternative. I happen to think that the abolition of poindings and warrant sales by the Parliament—in the teeth of the opposition of the Executive and of the legal establishment—was the finest moment in the Parliament's first three and a half years. However, we have to ask ourselves this question: when we abolished poindings and warrant sales, what were we abolishing? Was it a particular form of attaching poor people's goods and belongings, or was it the principle of attaching poor people's goods and belongings in order to recover debt? I thought that it was the latter. I thought that we were, in principle, opposed to sheriff officers forcing entry to a person's home, attaching their goods and selling them to recover debt, but it appears that that is not the case. It appears that many members here are not opposed to that.
The exceptional attachment order gives sheriff officers that right. In particular circumstances, they can force entry and attach and then auction people's goods to recover debt. Indeed, the evidence that sheriff officers gave to the Social Justice Committee was that the exceptional attachment order was actually a more severe form of attaching people's goods than was the previous method of poindings and warrant sales, which the Parliament was supposed to be opposed to.
I am told that the severity does not matter, because poor people will be protected through the debt arrangement scheme and so will not be subjected to that harsh form of recovery. However, we have already heard from Money Advice Scotland that, in its view, 70 per cent of its clients—who are the people in the greatest poverty and with the biggest debt problems—will not be covered by the debt arrangement scheme. That causes me considerable concern.
I read the evidence from the Scottish Association of Law Centres. It believes that exceptional attachment orders will become the norm and that, instead of there being 23,000 poindings and warrant sales, we will see thousands of exceptional attachment orders against ordinary people.
There is an alternative. The evidence of Trevor Bailey of Dundee City Council was that the best means of recovering goods from the chancers—those who can pay but will not—are already in place. I am talking about, for example, bank and earnings arrestments and bankruptcy sequestrations. Those who can pay can be got to using those methods. The only people who cannot be got to using those methods are the poor and we are told that the poor will not get exceptional attachment orders anyway.
Exceptional attachment orders bring us no further forward. If we cannot vote to delete them at stage 2, some of us will be forced to vote against the bill. I cannot agree to the reinstatement of this barbaric method of recovering debt, which will be forced on poor people in Scotland. I will not do it.
From time to time, it is worth while reminding ourselves why we are considering certain legislation. The Debt Arrangement and Attachment (Scotland) Bill arises as a consequence of Tommy Sheridan's success with the Abolition of Poindings and Warrant Sales Act 2001. Its aims are simple: to create a national, statutory debt arrangement scheme and to establish a humane and workable alternative to the diligence of poindings and warrant sales. Expressed like that, it seems so simple. We have to hand it to Mr Sheridan: he succeeded in steering his bill through to become an act by giving people anxiety attacks about how they might be perceived. All credit to him for doing that.
However, it is a matter of historical fact that we in the Conservatives opposed Mr Sheridan's bill. We did that not because we were unsympathetic or because we were unmoved by the plight of people in debt who have little in the way of material goods or possessions, or by their shame, embarrassment or despair when the sheriff officers came to call. We did so because we could foresee the difficulties ahead, as no alternative system had been proposed.
Sensing the difficulties, my boss Mr McLetchie willingly became a member of the cross-party working group that would seek a solution to the dilemma that was our initial concern. The "Striking the Balance" document was the result and we have no hesitation in supporting the guiding principles on which it was based—responsible behaviour by debtors and creditors.
I want to touch on something that Trish Godman said. I issue a challenge to every member, between now and when we finally come to vote on this issue, to collect every single invitation that they receive to take out some form of credit. Collect every letter from every credit card company that writes, and think about just how difficult resisting the temptation can be for some people. That is the kind of thing I mean when I talk about responsible creditor behaviour.
The Social Justice Committee considered a stand of least coercion and the necessity to avoid loopholes. The bill before us is the result, and we are happy to support the Executive. I come at the bill from the assumption that we all want to make it work. The bill does a fair job of addressing the needs of all sides.
The committee took evidence from a wide range of interested parties, including local authorities, the Scottish Consumer Council, Citizens Advice Scotland, Money Advice Scotland, the Institute of Credit Management and many others, including sheriff officers, who have been much maligned. To their credit, sheriff officers even suggested how they could assist, particularly with people who are in the mindset of putting letters behind the clock on the mantelpiece—a group whose interests the committee has been at great pains to be alert to.
From the outset, the Social Justice Committee's concern has been that adequate, humane alternatives would be introduced.
Will the member give way?
Happily.
The Society of Messengers-at-Arms and Sheriff Officers described exceptional attachments as "unworkable in practice". What changes would the member introduce to make exceptional attachments workable?
I am prepared to listen to the advice of the society and others. It is pointless to say, "We will not listen to advice." Listening to advice is the whole idea of considering and debating amendments.
I almost forgot where I was in my speech. Suitable, humane alternatives should be introduced and access to credit for less well-off members of our communities should be available without their resorting to loan sharks and less reputable lenders, whose rates do not appear on glossy cards. That is a win-win situation. Consumers will benefit because of the safeguards, and businesses will benefit because they can continue in the knowledge that an alternative debt recovery system will be in place. If people cannot honour their debts, it makes sense to protect them. On the other hand, the law-abiding remainder should not have to suffer for people who are able but for some reason unwilling to pay.
Members would be surprised if the committee's support was not qualified. We flag up some matters for further attention. I am sorry that Robert Brown is not present at the moment, as he homed in on an issue. The bill displays a penchant for subordinate legislation. Ms Curran has addressed that and I am sure that she will emphasise what has been said. We are also concerned about summary warrant procedure, which is well used by councils to collect huge amounts of overdue council tax and community charge. Why cannot private creditors use that procedure? Perhaps the minister could give us an idea of the Executive's thinking on that.
The minister has responded to anxieties about exceptional attachment orders. I assure members that the Social Justice Committee was well aware of the concerns and will consider amendments carefully, but the guide is in the word "exceptional" in the title. We were at great pains to consider the behind-the-clock people. We would welcome the provision of more money advice for them and we welcome the money that the Minister for Justice provided for Money Advice Scotland.
We are indebted to everyone who submitted evidence—particularly written evidence. I know that my colleagues on the committee will pursue other avenues of interest that have arisen from the evidence that we heard.
I will highlight one more thought. If either side abuses the proposed system, it will not work, and the fears that were originally expressed back in the days of the old Justice and Home Affairs Committee of fond memory will come home to roost.
As convener of the Social Justice Committee, I will outline the committee's position on the Debt Arrangement and Attachment (Scotland) Bill. My responsibility is to outline the committee's position, so I shall resist to the best of my ability my natural inclination to express what are more properly my own opinions. It would be advisable if people did not provoke me.
I thank all those who were involved in producing the committee's stage 1 report. In particular, I thank the clerking team for its help and efficiency. I thank all the organisations and individuals who spoke to the committee and who provided written responses. We took seriously the importance of making the broadest call for evidence. Many organisations and individuals responded and we paid significant attention to those who wrote to us, as well as to those who spoke to the committee.
We were keen to have the broadest scope of views, but we also acknowledged that the key question is whether the mechanisms that will be put in place can do what they claim to do: provide a humane alternative to poindings and warrant sales. That question was the focus of our oral evidence. It is remiss to suggest that the committee wished to disregard the powerful voices that drove the Parliament's decisions on the issue in the past.
The committee's report was unanimous and Robert Brown has talked about the divisions. I am therefore slightly bemused by some of the SNP's comments, particularly those on exceptional attachment orders. It is also not unusual for a front-bench Labour spokesperson to say something different from a Labour committee member, but when a front-bench spokesperson is the committee member and says different things, as with the SNP, perhaps that sends out a more confusing message.
One of the key objections to poindings and warrant sales was that they humiliated those who could not pay, to encourage those who would not pay. I have said that in debate. The case must be made that the proposal takes the can't-pays out of the system. The opposite is also the case. Those who will not pay cannot be allowed to use the dreadful circumstances that face those who cannot pay as a shield to avoid taking responsibility for their debt.
In earlier debate, it was recognised that people want to pay back debt. That is often the principle that drives most of the poorest in our communities. We also acknowledged that people in the poorest circumstances will be disproportionately affected by the non-payment of council tax. It is also acknowledged that a system is needed that does not prevent people who are on low incomes from having access to responsible lending, because the danger is that people are driven to irresponsible lenders.
The Social Justice Committee has concerns about the extent of access to the debt arrangement scheme and about exceptional attachment orders. We welcomed the proposal to introduce a national debt arrangement scheme and acknowledged that that proposal is widely supported by Money Advice Scotland and other interested organisations. However, the committee notes a lack of detail in the bill and expects the Executive to consult on all secondary legislation that will introduce the necessary regulations.
Does the member accept the evidence from Citizens Advice Scotland, Money Advice Scotland, the Legal Services Agency and the Scottish Association of Law Centres that if the debt arrangement scheme is not radically improved, exceptional attachment orders will not be exceptional?
I will talk about that, because the test for the bill is whether the debt arrangement scheme can work. That is not an issue of principle, but it is an issue of the practical delivery of the principle, which can be dealt with at stage 2.
Several organisations told the committee that many debtors may be excluded from the scheme as proposed. For example, the committee would be concerned if the scheme were open only to debtors who could pay their debts in full, including interest if demanded by creditors, in three to five years. The committee invites the Executive to reconsider freezing interest while a debt is being repaid and to reconsider composition in favour of the debtor.
The committee would welcome further details from the Executive on how the bill addresses the circumstances of debtors who might be on means-tested benefits and unable to afford to pay their debts in full within the prescribed time under the proposed scheme. The committee seeks the test and reassurance that the debt arrangement scheme can be accessed by people in the poorest circumstances.
On exceptional attachment orders, the committee's unanimous view is that if the safeguards that the debt arrangement scheme introduces are followed, it is disingenuous to suggest that part 3 amounts to poindings and warrant sales by another name. However, the committee also notes the concerns of organisations that have practical experience of the current system and would be required to implement the proposed procedures. In particular, members are concerned about the provision for the immediate removal of any article that is attached. The committee invites the Executive to examine closely the evidence of the organisations that will be responsible for implementing EAOs.
The committee welcomes the Minister for Justice's announcement of an additional £3 million and we acknowledge the extra central support that has been announced. However, the committee would welcome assurance from the Executive that it has addressed equality issues in the provision of advice and it recommends that the Executive should consider finding effective, innovative ways of communicating the advantages of the DAS to debtors.
The proposal's strength is that it rewards willingness to be involved in the process of managing debt repayment, so it is essential that money advice and information is not tokenistic and that real work is done to engage with those whose first instinct might be to put the problem away from them. That was a feature of the evidence that we heard.
The committee agreed that, for the necessary bond of trust to develop between the adviser and the debtor, a distinction is needed between the roles of the adviser in enforcing and supporting. The committee recommends that the Executive should consider lodging an amendment to clarify that distinction. On balance, the committee thought that it was possible for money advice to be delivered in the public sector. People who work for local authorities can still give independent advice.
The committee obviously looks forward to the Scottish Executive's response to the concerns that I have sought to summarise in my speech and which are set out in the committee's stage 1 report. I emphasise the fact that the committee will take seriously at stage 2 its responsibility to raise the issues that have been flagged up in today's debate. Nevertheless, the committee recommends to the Parliament that it agree to the general principles of the bill.
I, too, am a member of the Law Society of Scotland and a non-practising solicitor who had a great deal to do with clients who were in debt, so I recognise much of what Fergus Ewing had to say.
I want to focus on the principles. The Justice and Home Affairs Committee's stage 1 report on the Abolition of Poindings and Warrant Sales Bill said:
"The first step is … to acknowledge that poindings and warrant sales must go, and that efforts should be concentrated on finding a workable but humane alternative."
It is a pity that Mr McLetchie has left the chamber, because I have an example of what is an alternative and what a replacement. When the bus breaks down, one has the alternative of sitting by the road and perhaps hitching a lift, or one could wait for a replacement bus. That is the difference between an alternative and a replacement. What the Executive is doing—and it is kidding itself on—is replacing warrant sales by the exceptional attachment order, as I shall demonstrate.
Will Christine Grahame accept an intervention?
No. I want to give an example. Murdo Fraser can come in later.
I shall quote from two different pieces of legislation. The first lists as articles exempt from poinding,
"implements, tools of trade, books or other equipment reasonably required for the use of the debtor or any member of his household in the practice of the debtor's or such member's profession, trade or business, not exceeding in aggregate value £500".
The second lists,
"any implements, tools of trade, books or other equipment reasonably required for the use of the debtor in the practice of the debtor's profession, trade or business and not exceeding in aggregate value £1,000 or such amount as may be prescribed in regulations".
The first piece of legislation permits
"the opening of shut lockfast places, if necessary for the purpose of executing the poinding".
The second provides a
"Power of entry and valuation",
under which,
"An officer may open shut and lockfast places for the purposes of executing an attachment."
There is no difference.
I tell Trish Godman that a warrant sale is a procedure of diligence. It is irrelevant whether the person cannot pay because of their economic circumstances or whether they are wilfully not paying. It is a procedure, and that procedure remains in those two pieces of legislation. There is no difference between the Debtors (Scotland) Act 1987 and part 2 of the Debt Arrangement and Attachment (Scotland) Bill.
Christine Grahame is entirely right to say that it is a procedure. There is no argument about that. Surely the issue is about those who go through the barriers to arrive within the ambit of the procedure. That is the principle that the bill is dealing with.
I am talking principles. The preamble to the bill says, inter alia, that it is a bill
"to abolish poindings and warrant sales".
It quite obviously is not abolishing warrant sales. That procedure remains. It is nothing to do with ability or inability to pay. It is the procedure.
There are problems with the bill, but there is a logical argument here. We either abolish warrant sales or we do not. The Debt Arrangement and Attachment (Scotland) Bill is not abolishing warrant sales. However, in the debate on 6 December 2000—
Could I tell—
Please let me finish.
She has misled people.
I have not misled people.
Order. Are you giving way or not, Ms Grahame?
I shall give way.
The only thing that Christine Grahame failed to do was to say that the quotations that she read out refer to commercial cases.
It is not commercial.
It is.
With due respect, I ask the minister to check afterwards, but it is not commercial.
Well, I shall double check.
I would also like to add that, on 6 December 2000, in a debate in this chamber, Euan Robson said that he had suggested introducing a bill to abolish poindings and warrant sales only to be told:
"‘Actually, I think somebody's beaten you to it.' I therefore congratulate Tommy Sheridan".
He went on to say:
"I heard Tommy Sheridan say earlier that it is impossible to make an attachment to property without entry to property. That is simply not the case."—[Official Report, 6 December 2000; Vol 9, c 667-68.]
It is. It is here in the section of the bill that deals with entry into lockfast places.
When the Justice and Home Affairs Committee scrutinised the bill, Phil Gallie said that it was clear that the Tories would not stand against the principle of getting rid of poindings and warrant sales. Poindings and warrant sales are still here in a bill, renamed. David McLetchie was quite right; we must not kid ourselves. It is the same thing. All right, there are barriers and protections, but the Executive is still keeping warrant sales. Let us not kid ourselves.
Will Christine Grahame take an intervention?
The member must wind up now.
In the same debate, Gordon Jackson said:
"The right thing, and the really good thing, that we have done today is to abolish poindings and warrant sales and to say, ‘Focus your minds. On that date it will disappear.'"—[Official Report, 6 December 2000; Vol 9, c 670.]
Warrant sales may be more restricted, but they live on.
The bill before us today is not perfect. There are undoubtedly issues that will have to be addressed at stage 2. However, I believe that the principles of the Debt Arrangement and Attachment (Scotland) Bill are sound. It will provide a more humane and sensitive response to the problem of debt and I am confident that, after stage 2 amendment, the bill will ensure that only those who can afford to pay their debt but are unwilling to do so will face the threat of attachment. Such attachments will be the exception, not the rule. It is our responsibility to make a commitment to see that, after stage 2, that is what the legislation ensures.
I am also confident that the vast majority of people in Scotland want a law that ensures that those who can afford to deal with their debt are required and, if necessary, helped to do so. The people of Scotland do not want a law of diligence that allows individuals to walk away from their debt. Critics of the bill who oppose attachment but offer no viable alternative are being disingenuous. Their plans, if they could be called plans, seem to allow people to walk away from their financial responsibilities. They offer people the option of credit without repayment, leaving the vast majority to face the consequences of the actions of those who simply do not want to pay: increased prices and greatly reduced access to credit. That would undoubtedly disadvantage those on low incomes.
Does Karen Whitefield agree with the evidence that she heard, which was that if exceptional attachment orders were not part of the bill, that would have absolutely no effect on the provision of credit?
What Tommy Sheridan does not say is that his proposals would not sort out the attachments or make them work. He must accept that we have to do something with those who are unwilling to pay their debts. People in my community to whom I have spoken, including the poorest people who strive to pay their debts, do not think that people who do not want to pay should get away with it. It is disingenuous and quite wrong to say that poor people do not want to pay their debts, because they do. Tommy Sheridan is not aligned with the views of the majority of the people of Scotland. I believe that ordinary Scots, and most certainly the people in my constituency, understand that individuals should take responsibility for the debts that they incur. They would resent any system that allowed anything else.
The committee report raised a number of concerns, many of which were reflected in the excellent briefing produced by Citizens Advice Scotland. I would like to highlight three of those issues. The first is the issue of an upper monetary limit beyond which the facilities of debt arrangement would not be available. I am persuaded by the arguments put forward by Citizens Advice Scotland that setting such a ceiling in stone might exclude people with multiple debt from participation in the debt arrangement scheme. It is vital that the arrangement be as inclusive as possible and that those who are both able and willing to pay are given every opportunity to do so.
Secondly, I share the concern of Citizens Advice Scotland regarding the ambiguity in the bill about the differing role of the agency or person giving advice and of the agency or person monitoring payments. Those roles must remain separate. Finally, central to the success of the legislation will be ensuring that proper and consistent training is given to sheriffs. The Scottish sheriff court users group highlights the existing inconsistencies with regard to how sheriff courts deal with debt. It is vital that sheriffs understand the implications of the new legislation and that they are seen to be implementing it consistently across Scotland.
I ask ministers to take note of those and other concerns raised in the debate. As I have already said, no one claims that the bill is perfect, but I am convinced that its general principles are sound, and that this morning's opportunity to raise concerns will help ensure that the bill will, at a later stage, reflect what people want.
Many points have been eloquently made about the bill's content. Christine Grahame said that I once suggested that I approved of the principle of abandoning poindings and warrant sales. She is absolutely right. No right-minded person likes the thought of poindings and warrant sales going ahead. If there were alternatives, I would certainly welcome them.
I take Christine Grahame back to the history of the bill, and to evidence taking at the Justice and Home Affairs Committee on the Abolition of Poindings and Warrant Sales Bill, when I expressed grave reservations about getting rid of the poindings and warrant sales process. [Interruption.] I gave notice at stage 1 consideration of Tommy Sheridan's bill, when the Conservative party stood against it, that what was being offered to the chamber then was not a workable proposition. [Interruption.] Unfortunately, the Executive buckled to pressure from the back benches, and accepted that bill at stage 1. The bill progressed, and became an act.
Christine Grahame's comments are attributed to the time of stage 3 deliberations over that bill, when the Conservatives were bound to accept the bill as amended, with the promise that a working party would be established to set out alternatives. That was key to Conservative party support for the Abolition of Poindings and Warrant Sales Bill, and allowed me to state that, in principle, I would go along with getting rid of poindings and warrant sales. Perhaps I went further as, at the time, I complimented Tommy Sheridan on sticking to an issue about which he had expressed great concern over a long period.
Phil Gallie will recall that the Justice and Home Affairs Committee unanimously recommended in its stage 1 report on the Abolition of Poindings and Warrant Sales Bill
"that efforts should be concentrated on finding a workable but humane alternative."
Having heard me quote earlier from the Debtors (Scotland) Act 1987 and from the sections of the bill covering attachment orders and officers being able to
"open shut and lockfast places",
is Phil Gallie saying that such methods are alternatives? Are they not just replacements?
They are certainly alternatives, but, to some extent, Christine Grahame is right in suggesting that they are replacements. They are practical working arrangements. If people incur debt or owe their local authority money for taxation, there must be a final option for those who have not paid. They owe it to society; they owe it to their neighbours. If they do not meet their debt, they pass it on to others. I believe that, in Scotland, poor people, or whoever, do not have the desire not to pay; they want to meet their commitment.
There will always be the shysters, however; there will always be those who want to avoid payment. Realistically, the Executive, the Government and the Parliament have to ensure that people do not get away with incurring debt without any intention to pay. If we were to go along with Tommy Sheridan's original thoughts, I am afraid that that is where we would arrive. The people who would suffer the most would, almost certainly, be the very poor, whom Tommy Sheridan suggests he is here to protect.
Will Phil Gallie give way?
No. Phil Gallie has sat down and finished his speech. Before I call Gil Paterson, I point out that someone in the chamber has a mobile phone switched on. Please check that it is switched off. I now call Gil Paterson.
I hope that that was not me, Presiding Officer.
The aim of the Debt Arrangement and Attachment (Scotland) Bill, to create a national debt arrangement scheme and replace poindings and warrant sales, is laudable. It aims to ensure that the poorest in society, who cannot pay their debt, are protected. It all sounds very fine and well meaning but, when we look at the various consultation papers in depth, we discover that what is being proposed may leave those whom the bill is trying to protect in a worse position than that in which they currently find themselves.
According to Citizens Advice Scotland and Money Advice Scotland, their current clients will not benefit from the present proposals for a national debt arrangement scheme, given that people in debt are on low incomes or on benefits, and have very little or no disposable income. A scheme to repay debt over three to five years would be of no use to them. In evidence to the Social Justice Committee, Angus McIntosh of the Scottish Association of Law Centres said:
"The advantage of the bill is that it prohibits further diligence while debt arrangement schemes are in place. That is a positive step. However, as I said, the difficulty is that, although that is fine for people with substantial disposable income, if a person does not have sufficient disposable income to make meaningful and significant payments to creditors, they may not be able to get into the debt arrangement scheme in the first place."—[Official Report, Social Justice Committee, 6 June 2002; c 2957.]
Regrettably, the problem of the way in which the benefit system works with regard to low incomes is not something that this Parliament can do anything about. It can, however, amend the bill to ensure that debt arrangement schemes work for those who most need them.
As has already been said, Money Advice Scotland estimates that about 70 per cent of those clients who approach it for debt advice would not benefit from the debt arrangement scheme. As the bill's provisions stand, those people would be more at risk of incurring exceptional attachment orders—they would be less protected than they are under the current system of diligence.
When the Abolition of Poindings and Warrant Sales Bill was passed, the will of the Parliament was that no one should be subjected to having their property sold if they are unable to repay debt. Yet here we are, discussing what will replace poindings and warrant sales, and the bill includes a form of warrant sale for domestic customers, albeit without poinding. I say to the minister that that is unacceptable.
In their evidence to the Social Justice Committee, both Money Advice Scotland and Citizens Advice Scotland stated that they did not believe that removing the use of exceptional attachment orders from those who cannot pay would affect either the workings of the bill or the availability of credit to those on low incomes. The Executive should think seriously about that, as should, I suggest, back benchers in the Labour party.
The provisions that the bill would introduce have the makings of a fairer system of debt collection that treats those who experience difficulties with respect. Research by Citizens Advice Scotland shows that it is a low income, together with changes in circumstances and an inability to access mainstream credit, that leads to an inability by some people to repay their debt.
To ensure that the intentions behind the Abolition of Poindings and Warrant Sales Bill and the Debt Arrangement and Attachment (Scotland) Bill become a reality, the Parliament must do all that it can to promote credit unions; to ensure that those on low incomes have access to credit at reasonable rates; to ensure that those who provide credit do so in a reasonable manner; to ensure that money advice is readily available; and to ensure that our young people are provided with the basic skills to manage their money effectively.
I again address my remarks to back-bench members of the Labour party. If the measures before us go ahead, we really are going back to the future. For the folk whom they care about and whom I care about—the poor and the vulnerable—that means warrant sales.
I welcome the opportunity to participate in the debate. I will confine my remarks to some of the equality issues that were highlighted by the Equal Opportunities Committee in its stage 1 report. The good thing about having the chance to speak about equalities in the chamber is that it does not really matter at what stage of the debate it comes—it is not likely to be repeating what other people have said.
The Equal Opportunities Committee's report was not a comment on the desirability or otherwise of attachment; our comments were on the equal opportunities implications of the bill if passed.
The Equal Opportunities Committee is unhappy about the absence of an overarching equality statement in the bill. We believe that such a statement would demonstrate the Executive's commitment to the encouragement of equal opportunities across all areas of its activity. That is a criticism not only of the bill, but of most of the legislation that the Parliament passes. Given that some previous legislation has included such a statement, can the minister explain why that was not thought to be necessary in this bill?
The committee is also disappointed by paragraph 45 of the Executive's policy memorandum. It states:
"The proposed approach should have no impact on equal opportunities."
The committee feels that many of the groups that are listed in schedule 5 to the Scotland Act 1998 could be disproportionately affected by debt and therefore by the bill. The statement in paragraph 45 was contradicted by the view of the justice department in its response to me, when I wrote to it on behalf of the committee. The justice department stated:
"It is recognised that some women still bear the burden of coping with family debt commitments and that the elderly and those with limited education may experience greater difficulty in managing their affairs and paperwork."
Can the minister explain that contradiction?
A matter that particularly concerns the Equal Opportunities Committee—it concerns us about quite a lot of legislation—is the absence from the bill of a guaranteed provision of information in accessible formats. I repeat comments that I make every time that we discuss legislation that the committee has scrutinised. The absence of that guarantee is bound to have a significant impact on equal opportunities, although the committee accepts that the impact is hard to quantify. If there is no guaranteed provision of information in accessible formats, it is difficult to see how the Executive can be confident that all individuals in need of debt management advice can be assisted and that money advice can be equally accessed by people who do not have English as a first language or who have sensory impairments or a learning disability.
On a similar theme, the committee is concerned that section 48 of the bill appears to allow a minimum of four days for an officer to notify a person of an attachment. How can the minister be sure that the four days' notice for power of entry if an attachment is to go ahead is adequate for someone who is disabled or does not have English as a first language? The committee seeks from the Executive a guarantee in the bill that every effort will be made to ensure that adequate support arrangements are provided, for example an interpreter or an advocate for debtors who may require such support.
Finally, it is difficult to comment on the debt arrangement scheme, because very little of its detail is in the bill. The committee would be concerned if the scheme were seen to have a disproportionate effect on any of the equal opportunities categories identified in schedule 5 to the Scotland Act 1998. We ask the Executive to demonstrate that equal opportunities criteria are met in finalising the debt arrangement scheme.
I would welcome a response from the minister to the points that I have raised and to any or all of the points listed in paragraph 25 of the Equal Opportunities Committee's stage 1 report.
The problem with summary warrants was articulated by the Scottish Consumer Council, which stated:
"The Bill does not address the issues surrounding summary warrant procedure, which are in our view central to the proposed new system."
The SCC further stated that it would like to see greater protection for debtors in summary warrant cases; for example, there should be time to pay and a requirement for creditors to serve a charge before proceeding to an attachment order. The Scottish Law Commission supported that view. The SCC was unhappy about what it called
"the continued privilege of summary warrants for the collection of council tax."
In the Executive's view, its consultation
"was not considered the appropriate context in which to address the merits of whether summary warrant procedure should be available for use and by whom. Those principals are primarily for local government policy interests."
That is a bit of an Executive cop-out. I note from paragraph 81 of the Social Justice Committee's 4th report 2002 that
"At the same time, the Executive was addressing the issue of Local Authority use of summary warrant procedure through the joint COSLA and Executive Working Group which produced the report, It Pays to Pay, on council tax collection. The Committee would welcome being advised of the progress of the working group."
I hope that the working group has made progress. I hope that the Executive can tell us today what conclusions have been reached on the matter.
If the Executive is in the business of facilitating debt repayment in a humane and sympathetic way—I believe that it is—the legislation must be comprehensive and foolproof, and its principles must be consistent. The Scottish Consumer Council took the same view—that consistency was imperative. It argued that European convention on human rights issues arise from the continued existence of summary warrant procedures. The SCC's view was that all debtors should be treated in the same way, whatever the reason for their debt. If they were not, there may be infringements of article 6 of the ECHR.
The Legal Service Agency reinforced that point. Its representative, James Bauld, stated:
"charges are important, because they represent the last stage at which people have the chance to bring something back to court through an appeal … When sheriff officers serve a charge, sometimes it is the first time that people actually see what the charge is. As a result, serving the charge is important because it acts as a step before we start proceeding with the final diligence."—[Official Report, Social Justice Committee, 6 June 2002, c 2970-71.]
Of course, the final diligence is precisely what we want to avoid, if it is at all necessary.
In short, it seems to me that, first, there is a want of consistency in the application of proposed debt legislation and collection methods. Secondly, a body of opinion does not believe that summary warrants should be served without prior serving of a charge. I hope that the Executive will address those points.
I am happy to support the principles of the Debt Arrangement and Attachment (Scotland) Bill. We are now well on our way to providing a workable legal framework that will distinguish between those people who cannot pay and those who will not pay.
Thankfully, we are now in a period when Government is taking seriously the many social problems that are associated with debt. I hope that, by putting in place more money advisers and counsellors, we are able to help people to manage their way out of the downward spiral that debt brings to many families. As other members have said, the debt arrangement scheme that is contained in the bill has almost unanimous support. It is seen as a mechanism for helping people to free themselves from the shackles of debt. Money advice agencies and local authorities all have proof that debt repayment plans can and do work. However, I believe that the proposals that are contained in the bill can be improved on to provide greater protection for the debtor. I ask the ministers to consider the points that have been raised in the debate when we proceed to the next stage of the bill.
The debt payment programme will bring together an individual's debts, which will allow a manageable single sum to be agreed for regular payment. However, if interest is not frozen when the payment plan is agreed, the amount that the debtor will be paying towards the debt could be as little as 50 per cent. People who work in money advice currently can, and do, negotiate with creditors and they are often successful in having interest suspended. We should support their work through legislation.
A period of three to five years has been set for payment plans. The Social Justice Committee took strong evidence that that time frame would mean that a substantial number of people who have multiple debts would be excluded. That would defeat one of the main aims of the bill. The time span must be flexible enough to allow plans to be prepared over a realistic period so that they can allow repayment and recognise the level and burden of the debt that an individual faces.
I am concerned that the upper limit will be set too low. A level that is too low would exclude an awful lot of people from the scheme. The indication that has been given is that the level will be set at about £10,000. I am sure that the minister is aware, as I am from speaking to local money advisers and from my experience of constituency cases, that many people have debts that are far in excess of that figure. The Debt Arrangement and Attachment (Scotland) Bill must offer advice, assistance and protection to those people. We must consider that matter closely as we proceed to the next stage of the bill.
A number of organisations raised the issue of creditors' consent. I agree that creditors should not be able to hold up the progress of debt payment plans. Banks, building societies and other credit providers compound many people's debt problems by offering credit and cash far too easily. Their sales policy, for example in their television and newspaper advertising, is very aggressive. They must be made to take shared responsibility for finding solutions to the debt problem.
Other issues will need to be examined further as the bill progresses. For example, the issue of awarding preferred creditor status to local authorities has been raised by local authorities that have no other option. Local authorities have an important role in providing public services, and many local money advice agencies regard them—even without legislation—as preferred creditors. We must look into that further.
Robert Brown raised the issue of summary warrants, and the role of the Scottish ministers in relation to those needs to be clarified further. Johann Lamont, as the Social Justice Committee's convener, raised the issue of the independence of local authorities. Citizens Advice Scotland has raised concerns about the extent to which local authorities can be independent. I do not agree with Citizens Advice Scotland on that issue, as I believe that local authorities give independent advice.
I look forward to the next stages of the bill and to working with the Social Justice Committee, over the next few months, to ensure that we establish a system of debt recovery that not only recovers debts from those who can pay, but helps those who cannot.
Like many members who have spoken in the debate, I declare an interest as a member of the Law Society of Scotland and as a solicitor, although I am no longer practising.
Like Robert Brown and Fergus Ewing, when I was a practising solicitor I had to advise people who were in debt. I also had to advise creditors. We have heard a lot about the rights of debtors, but I would like to speak up for the rights of creditors. It was my job to advise creditors—often people in small businesses—who had difficulty in recovering sums of money that were due to them. They came to me when they faced bankruptcy, losing their homes, closing down their businesses and laying off staff because they could not recover sums that were due to them. What we have heard in the debate so far has been pretty depressing. The Scottish Socialist Party, perhaps not surprisingly, does not care for the rights of creditors. However, it is pretty depressing that the Scottish National Party is taking the same line and not proposing a realistic alternative.
Will the member take an intervention?
Christine Grahame did not give way to me during her speech, but I shall be delighted to give way to her.
I was a bit impassioned at the time.
What Murdo Fraser says is nonsense. I, too, have represented many creditors. At issue is the fact that the principle of the abolition of warrant sales, which the Parliament voted for, is not included in the bill—as I demonstrated by quoting sections from comparable legislation.
The problem is that the SNP has come up with no realistic alternative to the attachment of moveable property. The SNP is therefore disregarding the interests of commercial creditors, which is grossly irresponsible.
Will the member allow me to ask him a question?
No, thank you. We have heard enough from the SNP.
The Scottish Conservatives welcome the bill, as it strikes a reasonable balance between the rights of creditors and the need to protect debtors. Crucially, it allows the attachment and sale of moveable property with suitable safeguards in place. No legal system in the western world does not have a system of diligence against moveable property. All civilised countries need such a system because, without it, it would be too easy for debtors to escape their obligations.
The problem of speaking so late in the debate is that all the points that I was going to make have been made. I will endear myself to the Presiding Officer by being brief on two specific points. The first relates to the volume of subordinate legislation that is mentioned in the bill. It must be of concern that so many issues—some of them fundamental—will be dealt with through regulations, especially when only the negative resolution procedure is to be used. That applies, for example, to the detail of debt arrangement schemes in section 2(5), which sets the limits of the debt payment programme. That detail should be subject to the affirmative procedure, not to negative resolution. There are other examples later in the bill.
My second point concerns summary warrants, which issue has been raised by my colleague Lyndsay McIntosh. The bill does not deal with summary warrants, although they are used widely by public sector creditors, especially local authorities that are trying to recover council tax. There are issues of natural justice attached to that. Why should public sector creditors have advantages that private sector creditors do not have? The bill contains numerous safeguards to protect debtors who owe money to private sector creditors, but those do not apply in the case of public sector creditors. Why should that be? Are public sector creditors much more reasonable and responsible than private sector creditors? There is no evidence of that. In fact, the great majority of warrant sales were instructed by the state—by local authorities. From the consequential amendments, it looks as though the new attachment order will be permitted under summary warrant. That issue needs to be examined carefully. For the sake of fairness to all, we should consider why public sector creditors should have an advantage over private sector creditors.
I have made several points. I hope that the Executive will consider them at stage 2 of the bill.
I have learned several things this morning. Before the debate, I did not know that the SNP and Tommy Sheridan did not participate in the Scottish Executive's working group. That concerns me. Given the strength of will that was professed by the Parliament last year, I am enormously disappointed that members who say that they care have not helped to develop alternative proposals. The consultation paper that was issued last year called for responses. According to the papers that I have read, the consultation report states that respondents did not advance any alternative proposals. What more can I say?
The focus of the bill and the Executive's effort is the need to assist the most vulnerable people in society who are at risk of falling into debt or struggling to cope with debt. As a Fife MSP, I am proud that the Scottish debtline pilot has been based in Fife. I agree with Trish Godman and Gil Paterson, who talked about credit unions. They are absolutely right: much more needs to be done throughout Scotland. In America, credit unions are big business. A massive amount could be done to promote credit unions in Scotland. As a Co-operative Party member, I declare an interest in the matter.
I am pleased that the Executive is taking positive steps to tackle the problem of debt at its root, with the investment of £3 million for 100 new money advisers. Money Advice Scotland has been promoting that approach to the problem of debt and has welcomed that move. A further welcome for the Executive's plans comes from the Scottish Consumer Council, which said that the bill
"adheres to the principles that money advisers have been advocating for years."—[Official Report, Social Justice Committee, 12 June 2002; c 2994.]
The SCC has stated that the proposals cannot be described as warrant sales mark 2. Attachments will exist, but the bill's central aim is to protect debtors from them. Attachments will be used only in exceptional circumstances, when a debtor can pay but will not pay. Instead of wrangling for political points, we must ensure that the bill and subsequent regulations stick to and achieve the stated goal of protecting people and lifting them out of debt.
The debt arrangement scheme, along with money advice, will introduce a new approach to the tackling of debt. The ability of a debtor to make single payments to a distributor will end the nightmare of juggling multiple debts. Significant further protection from attachment will be offered by the bill. The onus will be on the creditor to satisfy a sheriff that all reasonable steps have been taken. One of the most telling facts about warrant sales was the fact that they often did not raise enough money to cover even the expenses of creditors. They were used as a punishment. The bill will abolish that abhorrent practice. Even in the rare circumstances in which a sheriff may consider proceeding with an attachment, he or she must be satisfied that a sale would raise enough money to cover expenses and pay off 10 per cent or £50 of the debt.
However, no one is complacent about the need to address the legitimate concerns of all the stakeholders in the issue. The replacement system for debt recovery will work only if both debtor and creditor have faith in it. As Citizens Advice Scotland and others have urged, we must start to think about the possible regulations that would define the way in which the new legislation would work in practice. Many issues will need to be clarified and settled to the satisfaction of all sides.
For example, Citizens Advice Scotland has highlighted the importance of access to the debt arrangement scheme. We must do all that we can to ensure that the most vulnerable people in society—those who are most in debt—can join the debt arrangement scheme. As the proposals stand, there is a danger that those who are unable to pay their debts with interest and within a certain time will not gain access to the scheme. The possibility of negotiating interest and debt payments in certain circumstances should be considered. Such a response would be to the collective advantage of creditors, as more debt would probably be repaid more quickly.
Another possible area of conflict is the need for creditor consent. Clarity is required on what circumstances would allow a creditor to refuse consent for a payment programme. Such guidance must take account of the legitimate concerns of creditors, but it must also protect debtors from having a payment programme that might change their lives undermined by one creditor's refusal to consent to it.
Those are the real and thorny issues that we must tackle soon. The principles of the bill are sound. To protect people from the downward spiral of debt, let us move to address the real issues without further delay.
Stage 1 of any bill is about that bill's principles. I have considerable concerns about two of the principles of the Debt Arrangement and Attachment (Scotland) Bill. First, there is the bill's total lack of transparency. There is little of the detail on which many of the witnesses gave evidence to the committees that considered the bill at stage 1. There is little of the detail that will tell us how the bill will work.
Many concerns have been raised—and acknowledged, even by the minister—that much of the bill will need to be amended at stage 2 and perhaps beyond. I welcome the fact that the Executive is willing to amend the bill, but when is a point a minor detail and when is it something that undermines the bill? So many questions arise about the principle of exceptional attachment orders and how they might be implemented that the proposal lacks credibility. A range of organisations—those that would have to implement the proposal and those that would have to offer the advice—raised concerns about that proposal. John McAllion was right to point out that we did not hear from the community groups that were concerned about the abolition of poindings and warrant sales.
A number of arguments have been ranged against disposing of the exceptional attachment order. One such argument is that there is no alternative. That argument is trotted out regularly by the Tories, for example. In fact, a range of alternatives is currently available and not used. It is possible to arrest wages or bank accounts. It is possible to recover debt from benefits. Debt can also be recovered through negotiation, which the part of the bill that deals with debt advice arrangements will enhance. Ultimately, a sanction called sequestration is available.
Will Brian Adam give way?
I ask Robert Brown to wait until I have finished developing my point.
The principle to which I thought that the Parliament had agreed in passing the Abolition of Poindings and Warrant Sales Act 2001 was that we would not make any charges against moveable property to dispose of it. The fact that the Conservatives support the exceptional attachment order gives the game away. They are the ones who support action against moveable property to realise debt. That is nothing to do with the Abolition of Poindings and Warrant Sales Act 2001. Whatever name we give to it, the Conservatives are prepared to use action against moveable property to realise debt. The bill does not produce an alternative; it just provides a replacement.
If Robert Brown wants to make an intervention, I would be delighted to take it.
It will need to be brief: Mr Adam is quite short of time now.
Is Brian Adam seriously suggesting sequestration as the alternative to poindings and warrant sales? That is what he seemed to say.
I said that it is available and that more than one measure is available. The bill does not abolish the principle of disposing of individuals' moveable assets to realise finance to repay debt. That is exactly what the 2001 act—which Parliament passed overwhelmingly—was concerned with. The bill is an attempt to undermine the 2001 act. It is to no one's credit that we are taking that line.
The principal moving force behind the abolition of poindings and warrant sales was the fear that was associated with that system. That fear will not be removed, because, for example, we have not spelt out what "exceptional" means. The fact that someone can come into a person's home, take away their goods and dispose of them publicly and humiliatingly will not change under the bill. It is a poindings and warrant sales bill. It is to the Executive's shame that it has introduced such a bill, but that is exactly what it did with the abolition of student tuition fees.
I pay tribute to the members of the working group that put together "Striking the Balance". It is evident, when one reads the bill and that report, that a great deal of serious, detailed work has been put into the matter. That is an example of the Parliament at its best.
There have been some excellent speeches from all parties. I will refer to some of them. The minister, Margaret Curran, gave us a good outline of the bill's raison d'être and structure. She said that the bill enjoys widespread support. I believe that that is the case. When I talk to my constituents, that is the message that I receive. The minister called the bill a humane and workable alternative. I believe that to be true.
Kenny Gibson from the Scottish National Party gave a considered speech. I liked his account of the credit card problems that he has experienced. We can all say amen to his comments on that. I will return to that point later on. His point that some creditors would like us to be in debt for evermore is true—the old, biblical word usury comes to mind.
My Liberal Democrat colleague Robert Brown made a number of points. He flagged up creditor consent. The lack of any form of reply from creditors should perhaps taken to be consent. Perhaps that could be examined at stage 2. He and other members mentioned the freezing of interest. I am sure that we all agree that that is logical. Again, some detailed changes may have to be made to accommodate that.
Robert Brown made a general point about advertising, if that is the right word. If the bill is to have the maximum effect, it is hugely important that the greatest number of people understand it and that the message is put across. Let us face the facts: debt is an unmentionable—people do not like to talk about it. Advertising is at least one way of getting across information.
Consumer credit in its broadest sense is not a devolved matter. In parallel with the bill, the Executive should consider establishing some form of best practice and revisit the issue. Consumer debt and consumer credit will be with us for a long time. Westminster may choose to legislate. We will see what happens on that.
Johann Lamont made a worthwhile speech and gave the Social Justice Committee's interpretation of the bill. We had some splendid vintage Gallie, which I greatly enjoyed. It was an effective speech. As a member of the Equal Opportunities Committee, I heartily endorse Kate Maclean's remarks. We must litmus test every bill against the work of that committee. I hope that Kate Maclean's remarks will be borne in mind at stage 2.
Among the SNP speakers, I complement Colin Campbell and Fergus Ewing, who is no longer in the chamber, for considered and thoughtful speeches. Fergus Ewing made a most useful point on the Debtors (Scotland) Act 1987 when he pointed out that some of donkey-work for establishing repayment schemes is in that act. The tool is in the toolbox. It may only be a matter of picking it up.
Murdo Fraser made the point that it is also important to remember the creditor's interest—the argument is not one-sided. David McLetchie took us through the legal framework—the democratic basis of law, why we have laws and how they are best interpreted. I am sure that all members were grateful for that. He brought a forensic skill to it. Lyndsay McIntosh, whose speech echoed David McLetchie's, reminded us that, if we are not careful, the law-abiding folks suffer. In the heat of the rhetoric, we would do well to remember that.
In concluding, I will broaden my theme, moving from the bill to the wider context. There are many reasons why people fall into debt, which hits some of the poorest in society. That is why the bill has been introduced, but if it is to have the maximum effect, we must concentrate on some of the major aspects of the problem.
I will draw attention to three points. The first is a question: how many MSPs have not been approached on the subject of benefits? That is not a devolved matter, but we all know about the appalling time lag that exists between the submission of an application for benefits by someone who deserves them and that person receiving their benefits. That time lag contributes to the debt problem. When we speak to our Westminster colleagues, we should urge them to take action on that front.
Secondly, banks were mentioned—by Kenny Gibson, I think—as independent sources of advice, about which I sound a note of caution. How many of us would leave a meeting with our bank manager absolutely certain that we had received the best possible deal in relation to rescheduling or paying off debts? That is an important point.
Thirdly, the merits of the CABx versus those of local authority debt advice units have been discussed. I do not want to get drawn into that argument, but I remind members that, in the broad context of debt, the strong role of the CABx is not limited to giving debt advice. In my constituency, Caithness CAB conducted a wide survey that identified the areas of maximum debt and the reasons for debt. In turn, that information can be used as a tool by local enterprise companies and local authorities to hit the problem head on and to throw resources at it. That work is a local equivalent of the Executive's laudable initiative of putting extra money into money advice.
It is worth remembering that CABx are at their most effective when they are able to maximise the benefit take-up of ordinary citizens. That tackles the problem of debt—it helps to hit that problem—and it takes money from Westminster and puts it into local economies in our beloved Scotland, which is highly effective. We should build on the foundation of CABx in Scotland—we should increase their number and let them flourish.
We have heard many good speeches this morning, including that of Jamie Stone.
The Conservatives have said that we support the Scottish Executive's Debt Arrangement and Attachment (Scotland) Bill, which was introduced on 7 May. We are always ready to give the Executive constructive criticism when its policies are seen to be lacking, but in the spirit of constructive politics, we support legislation that has been well drafted and that has sound general principles.
The case for the legislation was particularly well presented by Margaret Curran and David McLetchie. I also welcome the fact that the Consumer Credit Counselling Service for Scotland has announced that George Foulkes MP has agreed to become its patron. That Glasgow-based charity offers consumers a free debt counselling service through its dedicated helpline, the Scottish debtline, in partnership with the Highland Council. Last year, the Scottish debtline helped more than 10,000 people in Scotland with their debts. I wish George Foulkes every good fortune. I served with him as a councillor in Edinburgh and I believe that he is well qualified for that role.
In considering debt, I was reminded of an essay by Isaiah Berlin on the meaning of freedom. On one hand, there is freedom to do certain things and, on the other hand, there is freedom from being interfered with. Resolution of potential conflict between those freedoms must happen through well-balanced outcomes. Mr Tommy Sheridan's Abolition of Poindings and Warrant Sales Act 2001 provided for the abolition of poindings and warrant sales by 31 December 2002. However, the act suggested no alternative means of debt collection, which makes it largely unworkable in our view. As we know, a working group was established to recommend an alternative, which met first in July 2000 and subsequently published "Striking the Balance: a new approach to debt management".
Two years on from the introduction of Mr Tommy Sheridan's bill, I stand in the chamber to debate a bill that contains the very safeguards that we called for two years ago, and we welcome that. The bill will provide for a consensual system of debt collection in which creditor and debtor are brought together to create a mutually beneficial programme of debt repayment.
Just a minute—I have something to say.
The new environment will be particularly beneficial to a debtor who has multiple debt responsibilities and to his respective creditors. With the help of a payment distributor, whose role is similar to that of a mediator or counsellor, the parties will participate in the creation of a simple payment programme that will successfully pay creditors the sums that are owed to them. We must not lose sight of the fact that the debt arrangement scheme is designed to help people who have the resources and who are prepared to pay, but who may have insufficient knowledge of, or advice on, how best to effect payment, particularly in cases of multiple debt.
I thank Lord James for accepting my intervention. He said that he supports legislation that has been well drafted. Speakers of all parties have made the point that, although they agree with some of the bill's principles, they do not accept that the bill is well drafted. How would Lord James improve the bill in order to make it more workable in practice?
I accept the point that Mr Kenny Gibson makes, which is a fair one. This debate is not the last word on the bill, which I expect will be amended at stage 2. For example, people will want to know the precise difference between those who cannot pay and those who can. I expect that the Social Justice Committee will consider that point. The intention behind the bill is good and its general principles are good. As Mr Gibson was right to note, the detail of the bill should be examined in due course.
What is the controversial aspect of the bill? It is not whether there should be responsible creditor behaviour—everyone appears to accept that—but whether there should be responsible debtor behaviour when the debtor is in a position to pay. To be frank, it is our view that there is a balance to be struck between the creditor's legitimate requests and the debtor's circumstances. I understand that an overwhelming majority of the groups that were involved in the consultation exercise supported that approach, although there were some exceptions. We want to ensure that the bill protects the interests of creditors and the general public.
The point at issue is whether the debt arrangement scheme and the proposed exceptional attachment orders will ensure that creditors continue to offer credit to those who are less well off. It is extremely unlikely that creditors would have been willing to do so in the absence of a debt recovery system. The blunt reality is that businesses would not have been able to afford to take that risk.
I hope that the member will accept that the evidence that the committee received on the availability of credit—in the absence of exceptional attachment orders—was absolutely clear: the credit industry is in no way relying on those orders. Will he reflect on that fact?
Mr Tommy Sheridan does not represent all the creditors in Scotland. If there is no debt recovery system, creditors will not be willing to offer credit, which will weigh against his constituents. I recognise the consistency of his position, but I believe that he is irresponsible in misleading his constituents. I am genuine when I say that I am certain that, in such circumstances, credit would not be forthcoming.
In our view, the bill will assist businesses, because they would have had to put up with the prospect of lost revenue in the absence of a reasonable means of debt recovery. The bill will also help citizens who want credit. In our view, the bill will provide safeguards for those who cannot afford to pay, who should be excluded from the procedures on exceptional attachment orders, particularly because those orders should always be used as a last resort.
I come back to the need for a balance being struck between being considerate and compassionate to those who cannot pay and taking firm action against those who can pay but who neglect, forget or refuse to do so.
Will the member give way?
No. Lord James is in his last minute and I would rather that he concluded.
I always welcome Mr Jamie Stone's contributions, which are enlightening and welcome. I look forward to having a discussion with him afterwards.
The Social Justice Committee is to be warmly congratulated on a job well done. Our position is clear: if people cannot pay their debts, they should be assisted and given protection to help them through their predicament. If people can pay their debts, special privileges should not apply. We also believe that small creditors, and others to whom credit is owed, should not be disadvantaged.
We support the bill. We believe that, through its principles and intentions, a genuine attempt has been made to strike the right balance.
In his speech, John McAllion stated that the finest moment of the Scottish Parliament so far was the vote to abolish poindings and warrant sales. I agree totally; that vote was the most important event in the Parliament to date and I often say so when asked. The vote led to the setting up of the working group on a replacement for poindings and warrant sales. The result of its work is the introduction today of the Debt Arrangement and Attachment (Scotland) Bill. As a member of the Social Justice Committee, I have to say that I had unavoidably to miss some of the meetings at which the bill was debated and evidence taken. However, I have studied carefully the evidence, the committee's report and the Official Report. The issue is one about which I care deeply; over the years I have witnessed the actuality and the effects of debt, including the effect of poindings and warrant sales.
Most of the contributors to the debate noted that the bill has two main parts. Although members said that the debt arrangement scheme is worthy and long overdue, many expressed concerns. Those are summarised best by Citizens Advice Scotland, which highlighted the sort of scenarios that citizens advice bureaux workers and volunteers encounter regularly. The scenarios include debtors who can repay but whose repayments are less than the interest accruing, debtors who can pay but whose repayments are only marginally more than the interest accruing, debtors whose creditors will not agree to composition of debts and—far too common—debtors in high levels of multiple debt.
Citizens Advice Scotland also highlighted the horrendous situation of debtors in multiple debt whose debt repayment would take longer than the lifespan of the debt arrangement scheme. My colleague Kenneth Gibson alluded to that. I am very pleased that the Social Justice Committee took on board and reported much of the advice that it was given by those at the coalface. The committee has considered how to make the debt arrangement scheme a better scheme.
I am heartened by the minister's commitment to taking a broad-based approach to that subject and by her recognition that further consultation is required. I foresee copious amendments at stage 2 to allow the part of the bill that deals with the debt arrangement scheme to serve better the needs of those at whom it is aimed. One contentious aspect of the debt arrangement scheme is the need for money and debt advice to be independent. That was outlined eloquently by Robert Brown, who declared his interest in the Rutherglen and Cambuslang citizens advice bureau. We are talking about an area in which perception can be as important as reality. Earlier this week, I spoke to representatives of the East Kilbride citizens advice bureau, who told me that their clients tell them repeatedly that the CAB's independent stance is crucial to those who seek advice.
It is not surprising that the contentious part of the bill has been the main issue of debate today. I listened carefully to the debate. What I heard reinforces what was at first a gut feeling that the bill does not replace warrant sales—poindings, yes but not warrant sales. However, the will of the Parliament was to abolish both poindings and warrant sales and I am greatly concerned that the will of the Parliament is not being followed.
I have listened carefully to what Linda Fabiani and her colleagues have said in the debate. Given the real concerns that the SNP had from the outset, and the strength of will that the Parliament expressed, why did not the SNP participate in the working group on a replacement for poindings and warrant sales?
I am not the best person to answer that question; neither Kenny Gibson nor I had the social justice portfolio at the time. The matter has dragged on for a long time. I suggest that Helen Eadie ask Christine Grahame that question.
Will the member give way?
Will the member give way?
I did not realise that I was so popular.
I am surprised that, after three and a half years, Helen Eadie does not understand this point, because it has been discussed several times. SNP members and I left the working group because the group declared its intention to propose a replacement for poindings and warrant sales. We are opposed to poindings and warrant sales and do not think that they should be replaced. By the way, we are also opposed to compulsory sale orders. [Interruption.]
I did not think that I was going to be a referee when I stood up. [Interruption.]
Order. Ms Fabiani should continue, and no other members should interrupt her.
I have no doubt whatever in my mind—
Will the member give way?
I might do so soon.
I have absolutely no doubt that the Minister for Social Justice, Margaret Curran, my coalition colleagues in the Social Justice Committee and most MSPs wish to do the right thing. However, I also have absolutely no doubt that they are misguided if they believe that they are abolishing warrant sales. Christine Grahame's absolute logic proves that point. I suggest to Richard Simpson that, before he tries to take on Christine Grahame again, he read the bill and make sure of his facts.
Will the member give way?
No, thanks.
We have heard much about the need to differentiate between those who cannot pay and those who will not pay. However, under the bill, those who cannot pay might still suffer warrant sales—that archaic form of debt collection. We have heard many fine words about the need for a last resort. In theory, a last resort is an absolutely wonderful idea, but eviction from one's home is seen as a last resort for those who owe rent and it is a fact that some landlords use the threat of eviction to control rent arrears. Although warrant sales are supposed to be a last resort, some councils use the summary warrant procedure as a tactic to scare and harass people in order to collect council tax arrears.
It is nonsense to say that there are no alternatives to warrant sales. Many members have suggested such alternatives today, and many others have discounted them.
I accept that Linda Fabiani was not a member of the working group. Indeed, I suspect that, if she had been, she might have stayed on and fought her corner. I am curious as to why she is now arguing that exceptional attachment orders are just warrant sales by another name. After all, she signed up to a report that contains the unanimous recommendation that
"The Committee was of the view that if the safeguards which were to be introduced by the Debt Arrangement Scheme were followed, then it was disingenuous to suggest that Part 3 of the Bill amounted to poindings and warrant sale by another name."
The committee reached consensus on the view that we should try to sort out warrant sales, rather than simply say that we oppose them on principle.
As I have said, the issue is not poindings and warrant sales; we have done away with poindings, but we still have warrant sales, as Christine Grahame clearly pointed out. The paragraph of the report to which Johann Lamont refers mentions "poindings and warrant sales".
The paragraph says that
"it was disingenuous to suggest that Part 3 of the Bill"—
Order. The member is not giving way again.
Johann Lamont said that she, as the convener of the Social Justice Committee, would not get all wound up, but that is clearly what has happened.
Although I was unable to do so, my colleagues sat and listened to the evidence that was given. I have read that evidence. We are not replacing poindings and warrant sales; although we are doing away with poindings, warrant sales still exist. After reading the evidence over and over again and listening to many people, I feel strongly that warrant sales will still be used.
Although we welcome the debt arrangement scheme, we do not welcome the introduction of exceptional attachment orders. The minister mentioned that, in relation to the proposals, a witness had used the phrase
"a rose by any other name."—[Official Report, Social Justice Committee, 12 June 2002; c 3014.]
I suggest that warrant sales by any other name would smell as vile.
I should also add that I am very saddened by this morning's ruling that no deletions—only amendments—to the bill will be allowed at stage 2. The SNP will attempt radically to amend the bill's exceptional attachment provisions, because if we do not, we will be unable to reflect the Parliament's will in a way that protects as much as possible the poorest and most vulnerable people in our society.
As reference was made to a ruling, it might be appropriate to clarify what was said earlier. Decisions on admissibility of amendments at stage 2 will be made by the convener of the Social Justice Committee, with appropriate advice from parliamentary staff.
On a point of order, Presiding Officer.
I was told to seek the advice of your office about the admissibility of amendments at stage 2. The advice was that it will not be permissible to delete section 3 of the bill, which deals with exceptional attachment orders. Will you reflect on that advice and provide us with more details this afternoon?
We will, but the general position is that the Presiding Officers are not willing to give a ruling on stage 2 amendments because the admissibility of stage 2 amendments is a matter for the convener of the lead committee. That is where we should leave it, but if it is appropriate to give any further information to Parliament, Sir David might choose to do so.
I thank the Social Justice Committee for its report, which is excellent. Many concerns have been reinforced in speeches today and I will not be able to deal with them all now. It is extraordinary to stand here today—after standing here yesterday to speak about the Criminal Justice (Scotland) Bill with its 64 sections—because I felt more able to sum up yesterday than I do today. Today's contributions have been well considered and the speeches have been excellent. The points that have been raised need detailed consideration that cannot be given in the short summing-up that I must make today.
Before getting to the meat of the matter, I want to thank the subsidiary committees. There is a fundamental question about whether we should have a general equal opportunities statement in bills. As a Parliament, we need to decide whether we must resolve the matter. I have had a discussion with Kate Maclean, the convener of the Equal Opportunities Committee, but I have not come to a conclusion. The Executive and the Equal Opportunities Committee must resolve the problem because bills that do not contain such a statement will be seen as somehow inferior and not promoting equal opportunities in comparison with those that do. That is not the Executive's intention and it is not the intention of the Equal Opportunities Committee. We do not believe there is a contradiction in what we have said, but I will respond to Kate Maclean in detail in writing on that point.
Robert Brown referred to the Subordinate Legislation Committee, which has also considered the matter carefully. Paragraph 23 of the Social Justice Committee's report refers to equal opportunities in more detail.
Issues have been raised about regulations, their review and whether they should be subject to affirmative procedure. We must discuss that in some detail at stage 2—I will not make such matters less important by trying to address them today.
I always look for opportunities to praise colleagues, even if they are in Opposition parties. I think David McLetchie's speech was—unlike other speeches—excellent [Interruption.] That will probably not earn me any brownie points.
My greatest concern is that the SNP and the SSP chose not to participate in the working group on a replacement for poindings and warrant sales, whose remit was
"To identify a workable and humane replacement diligence against moveable property to that of poinding and warrant sale and to make recommendations for implementing legislation to be brought forward during the Parliamentary session 2001/02."
Will the minister take an intervention?
Not at this point.
To use Christine Grahame's analogy, the bus was departing on this complex issue. The SNP and the SSP tried to decide the route by which they would go, but Christine and Tommy got off at the first stop and said, "We want nothing more to do with it."
Will the minister take an intervention?
Not at the moment, but I promise to let the member speak.
The Opposition must be critical, but what I have not heard today is a suggested alternative to exceptional attachment orders, which will protect the poorest in our society. We all want to protect the poorest in our society.
Will the minister give way?
Will the minister give way?
Will the minister give way?
I will finish my point and let at least two of the members speak.
The point was made by a Conservative colleague and by Labour members. If we do not have some system of exceptional attachment, we will block those in our society who need credit from getting it from appropriate places.
I am not in the business of protecting creditor organisations. Margaret Curran has already met the banks and—to respond to Trish Godman's point—she will meet them again. We need to have discussions with the banks, because there are problems in that respect. However, we must come up with a solution that is workable and that will protect the poorest in our society.
Let me see. I will not take Christine Grahame's intervention because I will come back to her point later. I will take Tommy Sheridan and then Kenny Gibson.
Has the minister read the evidence that was submitted to the Social Justice Committee? Cathie Craigie asked the Institute of Credit Management whether, if exceptional attachment orders were not available, that would lead to a reduction in the availability of credit. That organisation's answer was an unequivocal, "No." Is not it misleading to suggest that if there are no exceptional attachment orders, poor people and low-income families will somehow or other not be able to access credit? That is wrong and the minister is misleading the Parliament by saying that.
Mr Sheridan always takes quotations from one organisation and says that they represent the totality. It is total and utter rubbish. Mr Sheridan is misleading and failing to protect the very people whom he purports constantly to protect.
I have to say that I quoted many organisations. The minister says that we have not offered alternatives, but we have heard about loads of alternatives today, including bank arrestments and benefit deductions. I even quoted several benefit deductions that are available. The bill is about negotiation.
If the minister wants to protect the poor, why will he not ensure that those who are on income support, working families tax credit or disabled persons credit will not suffer from exceptional attachment orders?
The problem is that Mr Gibson has failed to consider the bill in its totality. I will come to those points in a minute.
I want to deal with John McAllion's point. He has made some powerful interventions, but he says that we did not consult. "Striking the Balance" received 800 consultation responses; every organisation was able to respond. I refute John McAllion's point that we did not have adequate consultation.
Will the minister give way?
Mr McAllion had a chance to make his point. I cannot take any more interventions.
All members seek a workable and humane system for those who cannot pay. We must have a system that protects the poorest in our society, but we must also have a system that ensures that those who can pay do so. That is the system that we have set up in the bill. If one considers the matter in the round, the debt advisory scheme is the crucial element. That is the element that—following the working group's approach—gives us a scheme that will take debt in Scotland into the 21st century.
Before the minister runs out of time, he should acknowledge that he has completely missed the point—it is not about not protecting the poor. The bill narrates that it abolishes warrant sales. I want the minister to answer a direct question. Section 16 of the Debtors (Scotland) Act 1987 narrates circumstances of exempt articles and the Debt Arrangement and Attachment (Scotland) Bill narrates, in schedule 2, non-essential assets that are exempt from attachment orders. Those sections are identical. Are not they the same thing?
I accept that the comments that I made in my intervention on Christine Grahame earlier were not totally correct. I want to put that on the record.
Hooray!
Christine Grahame was talking about the provision for tools of trade, which applies principally to commercial cases. However, I accept that it could also apply in some domestic cases. The key issue is that in both cases where there has to be an attachment, there should in all circumstances be adequate protection of essential items. The bill provides that. It also introduces a completely new system for dealing with domestic cases. It is inevitable that where the bill deals with a last-resort sanction of attachment, there will be some similarities between its language and that of other legislation.
The language is exactly the same.
Christine Grahame selected some phrases from the bill in which the language is the same.
SNP members have said clearly that they do not want any form of final attachment, so at stage 2 of the bill they must lodge amendments that will ensure the protection of the poorest people.
Fergus Ewing, Robert Brown and others raised the important issue of creditor consent, which is a problem. We are consulting on the matter. We must ensure that creditors have the opportunity to consent during composition of debts. If they do not participate, no alternative measures will be available to them. The bill does not allow a creditor to attack a debtor on their own. That is fundamental. There is a need for composition of debts.
Lord James Douglas-Hamilton referred to the Consumer Credit Counselling Service, of which my good friend George Foulkes has agreed to be the patron in Scotland. The other day I had an interesting meeting with representatives of that organisation. In England the CCCS deals with 100,000 clients a year, whose debts it manages extremely well. The service has operated successfully for 10 years and has debt repayment schemes that run for 15 years, on average. However, most debts are wiped out after 4.7 years. Creditors make agreements that allow them to collect something, in the knowledge that they will not be able to collect the entire debt. Members have been asking all along whether such a scheme could work in practice here. The CCCS is a not-for-profit organisation that provides exactly the service that we require.
Concerns have been expressed about the independence of money advisers. The Chinese wall system works, but we will ensure that it is effective. More than 50 per cent of money advisers are independent and 100 new advisers have been recruited. We will ensure that the service is properly funded and that people get the money advice that they need.
Linda Fabiani and Kenny Gibson mentioned interest freezing. I will send Kenny Gibson a quotation to remind him of what he said originally on the matter.
I apologise to members for failing to deal with all the points that have been made. Today the Parliament has done itself a great deal of good, because this has been a measured debate. I want to end almost as I began—with a challenge to Tommy Sheridan and the SNP. They should admit that they made a mistake in resigning from the working group. They should have participated, but they went off in a huff.
Let us leave that debate behind us. We will not expect an apology from Tommy Sheridan or the SNP.
Did the minister vote for the abolition of poindings and warrant sales?
I did.
You did not.
Order. Mr Sheridan, will you please desist?
Aye, sure. I am sorry.
I challenge Mr Sheridan and the SNP to devise workable alternatives to the EAO. If they do so, I am sure that they will be considered at stage 2. However, today I have not heard members propose such alternatives.
Taken as a whole, the bill embodies the principles that the Parliament articulated in the Abolition of Poindings and Warrant Sales Act 2001. I urge the Parliament to support the motion.