Mortgage Rights (Scotland) Bill
The next item of business is a debate on motion S1M-2007, in the name of Cathie Craigie, which seeks agreement that the Mortgage Rights (Scotland) Bill be passed.
It has been a pleasure and a privilege for me to have introduced the Mortgage Rights (Scotland) Bill, which, when enacted, will benefit many thousands of people and households in all parts of Scotland. Throughout the stages of the bill, I have been heartened by the Parliament and by what is perhaps a reflection of the strength of feeling and support inside and outside Parliament for the proposals in my bill.
I thank all those who assisted me in preparing and introducing the bill and carrying it through the parliamentary process, and those who supported the measures, many of whom are present this afternoon and without whom the bill would not have reached this stage.
I also acknowledge the work of the clerks to and the members of the Social Justice Committee. Their questions and comments helped me to shape the bill to prevent unintended and unhelpful consequences. I appreciate the effort and time that all members put into that. That has ensured that the bill that we seek to enact will meet the objectives with which it set out.
Repossession is a dreadful experience for the people concerned, who may have to move out of the area where they live, leave their friends and family, move their children to a new school and change all the bits and pieces of everyday life. It is well known that moving house is stressful. Imagine how stressful it is to be forced to move because of repossession, particularly if that leads to homelessness and the indignity that that can involve. The social costs that result from the stress and upheaval also have financial costs for individuals and any public agencies involved.
I have long held the view, which I have often repeated, that people and their families could have been spared the indignity of repossession had the courts been able to take all their circumstances into account. It does not make sense to allow those debtors and their families to become another homelessness statistic.
My bill amends the provisions of the Conveyancing and Feudal Reform (Scotland) Act 1970, which created the standard security, known to most of us as the mortgage—members will remember the debates about whether we could call it a mortgage or a standard security. The bill gives the court power to consider the particular circumstances of the debtor and allows the court to consider whether the repossession should be stopped to give the debtor time to get back on track by paying off his or her arrears. If that is not possible, the court can decide to give the debtor time to find suitable alternative accommodation. That is the way forward.
The bill allows the debtor's tenants time to make arrangements to find other accommodation by providing that they are notified of court proceedings. I am not sure how many members in the chamber have had practical experience of that, but I have constituents who have known nothing about a repossession until the sheriff officers turn up and chap at the door. By passing the Mortgage Rights (Scotland) Bill today, Parliament will ensure that those people have a right to be notified of the court proceedings.
The bill gives advice to people who, having been served with a notice to quit, need to obtain legal advice. Robert Brown raised that important point earlier in the debate. I hope to work with the Executive to ensure that proper legal advice and debt management is available to everyone in advice centres. If people are able to get good, sound advice at an early stage, they can avoid the problems of having to go through the courts.
All the way through the passage of the bill, I have argued that debtors need a chance to draw a line under their problems. They need to be able to come to an arrangement with their creditors. As I said earlier, my bill will give them that chance. It is not a debtors charter; it is an opportunity for people to get advice and to get their lives back to normal.
My bill might not be the first member's bill to be passed by the Parliament, but I am proud to be its promoter. I am proud to represent Cumbernauld and Kilsyth in the first democratically elected Scottish Parliament. I am proud to be the first woman MSP to introduce a bill into the Parliament. [Applause.] I am also proud to be a member of a Parliament where the genders are so well balanced that we are 50:50.
I move,
That the Parliament agrees that the Mortgage Rights (Scotland) Bill be passed.
I congratulate Cathie Craigie on having her member's bill reach this stage. The Executive has been pleased to support a bill that will assist those in mortgage arrears who might otherwise become homeless when their homes are repossessed.
As members are aware, one of the Executive's key priorities is to tackle homelessness. Last week, the Scottish Parliament passed the Housing (Scotland) Bill to provide a package of new and enhanced rights to people who are homeless or threatened with homelessness. The Mortgage Rights (Scotland) Bill provides further protection to people who are in mortgage difficulties. I hope that the Parliament will give the bill its support.
As Cathie Craigie noted earlier, repossession is a personal tragedy for the individuals and families that are involved. It also has a cost that goes far beyond people losing their homes or the resources that local authorities might use to rehouse a family. The experience in England, which has had similar legislation for many years, indicates that 45 per cent of debtors in default could get back on their feet and stay in their homes. That is no mean achievement. In Scotland, that would mean 1,350 fewer people having their homes possessed by lenders, 540 fewer applications to local authorities under the homelessness legislation and 405 fewer applications being classed as being in priority need.
We all acknowledge that the provisions of the bill will not help everyone in mortgage difficulties. Some people are unable to cope with the responsibility that home ownership brings; for others, irregular employment patterns may make sustaining a mortgage difficult. However, that does not detract from the importance of what we are debating today. For those who can be helped in this way, the bill will make a real difference. It will give people the breathing space they need to sort themselves out. It can stop the steamroller and give the courts the opportunity to consider all the circumstances that might apply. If it looks unlikely that a debtor can get back on track, the court can give them enough time to secure alternative accommodation.
I am especially pleased that the bill requires the court to consider both the applicant's circumstances and the actions of the lender. That should afford a much more balanced approach than the current position. Currently, it is often the case that all the lender has to do is to turn up, say that the debtor is in arrears and get possession—a rather one-sided approach. Where the applicant is not the debtor, it is even more important that the case is made, because it will still be the debtor who is liable for the accruing arrears.
For the purposes of rule 9.11 of the standing orders, I wish to advise the Parliament that Her Majesty, having been informed of the purport of the Mortgage Rights (Scotland) Bill, has consented to place her prerogative and interests, so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.
The bill amends the Conveyancing and Feudal Reform (Scotland) Act 1970, which is a fairly technical piece of legislation. Throughout the passage of the bill, Cathie Craigie has been willing to give careful consideration to all the comments and suggestions that have been made. I acknowledge the care that she has taken. The Parliament should congratulate her, as I do, on being the first woman to steer a member's bill through the Parliament. The Executive and I are delighted to support the motion.
I, too, congratulate Cathie Craigie on the Mortgage Rights (Scotland) Bill. I appreciate the time and effort involved in preparing it and the constructive dialogue with many parties that she carried out during that process. Her reference to the Keeper of the Register of Inhibitions and Adjudications, when we were discussing amendment 6, indicates the technicalities involved and the more obscure organisations with which she has had dialogue.
There are times in the Parliament when we debate issues that make us ask, "What difference will this make to people's lives?" Passing the bill will be one of those moments when we can say that we will make a difference, just as the Abolition of Poindings and Warrant Sales Act 2001 will have a positive impact on people's lives. In England, for every 100 orders for possession that are granted, 60 are suspended; in three quarters of those cases, the debtors resume payment. That means that 45 out of 100 people are able to stay in their homes. If the same thing happens in Scotland, we can say that the Parliament has made a difference to people's lives. I congratulate Cathie Craigie on introducing the bill.
The issue has been a bit of a relay race. I remember trying to amend the Abolition of Feudal Tenure etc (Scotland) Bill to introduce suspended repossession orders, way back in the summer of 1999. Robert Brown, in the Family Homes and Homelessness (Scotland) Bill, also wanted to address that issue. However, it is Cathie Craigie who completed that valuable work by lodging this member's bill.
It has been pointed out that Scots law refers to standard securities; technically, we should be talking about the Standard Security Rights (Scotland) Bill. I hope that the fact that we are not is not evidence of a creeping anglicisation that will appear in other bills in future. I am sure that the Parliament will protect Scots law in future.
Some issues that have been raised are recurrent themes. We must pay tribute to Robert Brown's dogged pursuance of advice issues—they will be raised time and time again when we discuss debt issues in future.
We have to look at the practice and the practicalities of the impact that the bill will have and we may have to change things in future. However, there is good will behind all aspects of the bill and it will receive support, as it will help many people.
We sometimes have to reflect on definitions. It is up to the Parliament to consider the status of definitions in primary legislation. A member's bill may not be the best way to address that issue, but I am sure that it will come back time and again.
Again I congratulate Cathie Craigie. The bill will make a difference. More important, it tackles an issue to which the Parliament must return again and again. All of us wanted to do something about debt and homelessness when we were elected, so I am pleased that we will be able to do so today.
I add my congratulations and those of the Conservative party to Cathie Craigie on the forthcoming successful passage of the Mortgage Rights (Scotland) Bill, because it is a good piece of legislation. Any piece of legislation that impacts on homelessness and on people losing their homes has got to be good and, as Margaret Curran said, the bill resolves an inconsistency and inequity between Scots law and English law. In England, a county court judge has powers that are denied to Scottish sheriffs, so that change to Scots law is a beneficial aspect of the bill.
However, one discordant and disturbing piece of evidence arose in our consideration of the bill. It is quite clear that in their day-to-day business mortgage lenders, whether banks or building societies, do not want to repossess homes. Indeed, they bend over backwards to avoid doing so. After all, they are in the business of lending money, not repossessing homes.
As Cathie Craigie will confirm, it became apparent from some of the evidence that the Social Justice Committee heard that many of those who find themselves in difficulty are not the victims of over-reactive building societies, but have fallen into the clutches of the secondary lenders. It is apparent that those loans are sometimes granted at quite farcical interest rates, giving only temporary relief to those who find themselves in financial difficulties.
If the problem is as widespread as it appears to be, action against those loan sharks, who are parasites and a disgrace to the financial services industry, is long overdue. I am not sure which road forward should be taken in that respect, whether it should be by way of the social justice remit or the legal affairs remit. However, some action should be taken, as those people are preying on a vulnerable section of society or on people who are particularly vulnerable at a certain stage in their lives. Attention to the problem is definitely due.
Again I congratulate Cathie Craigie. I noted her remark about how balanced the Labour group is, according to her perspective. Many of us have thought that it is distinctly unbalanced, but that is a debate that we can perhaps continue until another day. In conclusion, the bill is a good piece of legislation and a job well done. We all look forward to the passage of the bill.
I add my congratulations to Cathie Craigie on seeing the bill through. I bet that, when she was elected as the member for Cumbernauld and Kilsyth, the first thing on her mind was not the idea of becoming an expert on the Conveyancing and Feudal Reform (Scotland) Act 1970, far less the Heritable Securities (Scotland) Act 1894. In fact, I venture that she had not even heard of the first one; I confess that I know of it only from my dim and distant legal past.
The consideration of the bill has been a job well done. The Social Justice Committee has given close scrutiny to the bill and I have been impressed by the interest that the Parliament has taken in its passage. I echo other members by saying that I came into the Parliament to try to make things a little better in Scotland than they were when the Parliament was set up. Scotland will be all the better for the passage of the bill. It is also worth saying that the bill would not have been passed without the Scottish Parliament—certainly not within a reasonable time scale once the issue was flagged up.
The bill was raised by a back-bench member. Although it has had Executive backing, it is appropriate that it should be dealt with on its merits by the chamber today. That is why the Liberal Democrats at least had a free vote on the amendments. There is a difference between Executive legislation and that which originates in members' bills.
A house is probably the biggest purchase that people make. As the balance has shifted in recent years towards owner occupation, that is the case for far more families than it was 20 or 30 years ago. There are genuine issues about the extent to which people are encouraged to buy at the limit of affordability and take on commitments that they find difficult to maintain with their job and income constraints and family situations. There is a much more fluid social existence than there once was.
I do not know if this is the same for other people, but about twice a week I get almost unrefusable offers through the door from financial institutions to take on board my credit accounts. They offer me superb financial deals and a carriage clock or a mobile phone as a gift for doing so. I echo what Bill Aitken said: the pressures that people are under to take on credit and to land themselves in financial situations with which they cannot ultimately cope are too great.
There are two problems, notwithstanding the perfectly reasonable view taken by most mortgage lenders. As Bill Aitken rightly said, there are people who are perhaps too keen to make finance available to people to whom they should not make it available. There are also elements of institutional rigidity. At stage 1, I remember an exchange that I had with a representative of the Law Society on how lawyers who act for mortgage companies approach requests for more time or to enter into arrangements. I expressed the view that in my limited experience of that field sometimes people who are difficult to get hold of do not respond, return telephone calls or come back on questions. That is probably not through a lack of good will, but there is sometimes an institutional disregard of individual situations. The bill will provide a long-stop against such situations.
The bill will stop the unnecessary eviction of people from their homes and all the implications of eviction, such as homelessness, family break-ups, alcohol problems and problems relating to children, and replace that with something more civilised and more humane. This is a win-win situation for the Parliament, the Scottish Government and the people who are involved. I am very pleased to have been involved in the passage of the Mortgage Rights (Scotland) Bill.
I thank everyone who has contributed to the debate and for their warm words. I am embarrassed by the congratulations.
It has been great to be involved with the Mortgage Rights (Scotland) Bill. The Scottish Parliament is all about bringing power closer to Scotland, talking and putting party interests to the side most of the time. The Social Justice Committee was able to do that when it discussed the bill.
Fiona Hyslop said that we should protect Scots law, but I am not sure that everyone knows that people have a standard security and not a mortgage in the roof over their heads. There was an argument in the early days of the bill about what the bill should be called. The legal profession strongly advised that the bill should be called the Standard Security Rights (Scotland) Bill. I dug my heels in and disagreed. Who in the street knows what a standard security is? That is why there is a Mortgage Rights (Scotland) Bill. We should speak the language of the people and that is the language that the people use.
We all know that, as Bill Aitken said, there are many unscrupulous lenders. Robert Brown touched on the issue too. The great majority of high street lenders bend over backwards to assist people. Nevertheless, within those organisations there is the institutional rigidity that Robert Brown mentioned. Some people who borrow from high street lenders still find themselves affected by repossession. Although the high street lenders are better than the unscrupulous lenders, they should look at themselves as well.
A document that was published recently might interest Bill Aitken and other members. At the beginning of this week or the end of last week, the Financial Services Authority published a consultation document that considers mortgage lenders and the people involved in the mortgage industry. We should all take an interest and respond to the consultation, because many improvements could be made.
I will finish by saying thanks to everyone who has assisted me in this process. Once the bill is enacted it will help over time to save thousands of people the indignity of repossession and homelessness. I thank everyone for their support in putting the bill through.