Chamber and committees

I thank Martin Whitfield for his intervention and for the point that he raises, which is important and relevant. I think that I said in my remarks that, for those outside the chamber, there is a need for certainty and for understanding about the things that they want to see in the bill that will enhance it, and there is a need to ensure that people are given adequate protection. That is a very clear point, and I am sure that the Government will want to reflect on that more widely in our proceedings today.

I believe that amendment 15 is important and that it will push the Government to ensure that the moratorium is enacted and consulted on widely. I press the amendment.

Amendment 16 is similar to an amendment that I lodged at stage 2. I took time to reflect on the process at stage 2 before lodging this amendment.

Amendment 16 would grant ministers the power, if it were to be deemed necessary, to make regulations requiring local authorities that are pursuing debt to take certain actions prior to taking any debt recovery action. That could include directing an individual towards free debt, money and legal advice before a summary warrant is granted by a sheriff.

Members across the chamber will know that public debt and, in particular, council tax arrears, has been a growing problem in Scotland and across the United Kingdom. Unlike private debt, it is not covered by Financial Conduct Authority regulations, which compel lenders to take measures to ensure that debtors are treated more fairly and with consideration to vulnerabilities. A 2023 report by Aberlour Children’s Charity highlighted that 55 per cent of low-income families in Scotland that were in receipt of universal credit had at least one deduction from their monthly income to cover debts to public bodies. Another recent report from StepChange found that, in 2021 and 2022, 32 per cent of its clients were in arrears with their council tax. It cannot be right that public bodies and local authorities are on their way to becoming the largest collectors of debt.

Debt collection practices across local authorities vary widely and, in some instances, can be viewed as problematic and quite callous. Examples of that have been relayed in the chamber before, such as the collection of school meals debt by sheriff officers. It is clear that the same level of protection and regulation that often applies to private debt is not there. We seek better practice and more support for individuals, which we are not seeing currently.

I understand from my engagement with Tom Arthur when he was in the role and from my engagement with the current minister that work is on-going with local authorities and the Convention of Scottish Local Authorities on such matters. Indeed, pilot programmes have been conducted and work has been done with third sector organisations such as Citizens Advice Scotland to improve that landscape. I know that that work is under review and that the Scottish Government has not yet decided whether regulations would be the best way to deal with those issues. However, I do not want us to be back in the chamber in six months or a year after the Government has considered all that and for us to conclude that regulations are needed. We do not want to miss the boat on that legislation.

Amendment 16 seeks to create a regulatory space now, without requiring ministers to use the provisions immediately, so that they can continue their on-going consultation work and engagement around need as well as exploring the best path forward for regulations. The Government could then bring forward regulations when it is necessary. I am pleased that my amendment has the support of stakeholders such as Citizens Advice Scotland, Aberlour Children’s Charity and the Govan Law Centre. I look forward to hearing from the minister on the record about the Scottish Government’s thinking on public debt and pre-action requirements. I hope that he can find his way to backing my amendment 16.

I move amendment 16.

I thank the minister and Murdo Fraser for their contributions to the debate and for the questions that were posed to me on amendment 16. There is a degree of consensus about our concern around the tactics that public sector bodies sometimes employ and, indeed, the growing scale of public sector debt and the challenge therein.

Mr Fraser asked why the amendment singles out local authorities, which is a point that was made at stage 2 by his colleague, Brian Whittle. The answer is that local authorities hold the lion’s share of that public sector debt in a local way and are using those very concerning tactics that I mentioned in relation to things such as school meals debt, council tax arrears and various other sundry debts that come under councils. They have the power to act and take different approaches, and I think that we have seen that.

That also relates to the minister’s point. There is something of a postcode lottery—if I can use that expression—or a variance in the approaches that are taken by local authorities across Scotland, which is proving to be challenging. For example, pilot projects in Tayside, and Dundee City Council, working with Aberlour, as I mentioned, have taken different approaches to the principles that they follow in collection of debt. They have worked intensively with debtors in order to get them the support that is required.

That brings me to the broader point where we have agreement—certainly, I have agreement with the minister—on the need to support local authorities and public bodies to take as many pre-actions as are required in order to support people to be good citizens and, of course, to pay their debt where that is owed, in a way that helps them to maximise their income and get all the support that they are entitled to.

In response to the minister’s point about respect for local authorities, as a former councillor of 10 years’ standing, I have huge respect for local authorities and the decisions that they make. However, it is important to note that the amendment has changed in nature since stage 2. At stage 2, it would have compelled local authorities in a more direct way. The minister, Tom Arthur, and I had an exchange of a similar nature in committee on the stage 2 amendment, which was far more directive and required the Government to direct local authorities. Amendment 16 would simply allow Scottish ministers, if required, to make those regulations. Obviously, we would want to see a huge degree of consultation and discussion before bringing forward any powers. That is why I drafted amendment 16 in this way at stage 3.

Mr Fraser asked about my interactions with COSLA. I will be honest about the fact that my discussions have been with individual local authority leaders on some of those issues, rather than with COSLA more directly. Those leaders share the concerns about the postcode lottery that I talked about and agree that, where there is best practice in an authority, that should be replicated across the country. The minister has said that he intends to develop that work and move it forward, but we should have that power, if it is required, on the statute book. On that basis, I press amendment 16.

We have had a particularly constructive and helpful debate on the group of amendments and the issues that are raised therein. The minister perhaps summed it up when he spoke about the pressures that still exist given the volatile period that we have had with inflation and the uncertainty for people across the country in dealing with the cost of living. The amendments in the group seek to ensure that those who are in debt and are being pursued for that debt are given the right support to protect their incomes and the balances in their accounts, particularly where they are in receipt of social security.

I heard what the minister said about his view and the Government’s view of the provisions in the Coronavirus (Recovery and Reform) (Scotland) Act 2022 and the work that has already been done to increase the minimum balance. I recognise his view that there is a provision in that act that will enable him and the Government to vary that as required. On that basis and given the assurance from the minister, I will not press amendment 17.

We have also had an important discussion about Colin Smyth’s amendments in the group, which seek to ensure that there is more detail on protecting those balances. I welcome the minister’s interaction and collaboration with Colin Smyth in relation to amendment 10, which will require the Scottish ministers to fully consult on and test the principles, as Colin Smyth outlined. I also welcome the commitment that the minister made today to bring forward by two years the earnings arrestment levels, to look at them in far more detail far sooner than would otherwise have been the case, and to do that in the constructive way that he set out to Parliament.

On Maggie Chapman’s amendment 24, again, we understand and respect the principle and where it comes from. We would point to Colin Smyth’s work on amendment 10, but also to some of the concerns that have been expressed about devolved competence and the adverse effect that there might be if the restrictions were added to the 1987 act. Although I understand the principle and would support it, we have to be a little careful there.

It was important to have the debate on the group so that we can move forward in a constructive way with the Government, which I hope we will when we vote on the amendments.

Amendment 17, by agreement, withdrawn.

Amendment 15 is rather simple and is intended to give greater permanency to and certainty on the creation of the mental health moratorium.

At stage 2, I lodged amendments that would have put the moratorium and some of the provisions on it into the bill. The driving force behind that—behind all my amendments in this regard—has been the concerns from stakeholders that there has not been certainty about the nature of the moratorium or its creation. At stage 2, we had a good discussion on the potential detail of the moratorium, and I accepted the arguments of the minister at the time, Tom Arthur, about the desire to keep the moratorium in regulations, which would mean that changes and improvements could be made over time as their impact was reviewed. I understand those arguments. That is why, having reflected on the Government’s response, which was to publish regulations to allow people to see what is proposed and interact with it, I have brought back at stage 3 the simpler amendment 15 for the purpose of providing more certainty around the moratorium.

We want certainty that a mental health moratorium will exist. I do not doubt the Scottish Government’s intent or desire. As I have said, there have been numerous productive discussions in that regard. However, it is important that we set that out in the bill because, although we all agree in principle, it is necessary that those who are struggling see the Parliament’s intent on what we will do in regulations to support them.

The other purpose of amendment 15 is to be somewhat probing: to ensure that we can have a debate about the nature of the moratorium, so that the minister can perhaps say more about the details of what he has published to consult on, and so that we can hear a number of views on what should or should not be in scope for the wider moratorium. Indeed, there have been lots of discussions about who will qualify for the moratorium, what sorts of treatments will qualify and what sort of mental health professionals may attest to the need for support through a moratorium. It is important that we continue to have such debates.

I will comment briefly on the other amendments in the group. I support my colleague Daniel Johnson’s amendment 23, which would ensure that ministers could make only regulations that were within the scope of the long title of the bill, maintaining a place for Parliament in any further work. I also note and welcome the minister’s amendments to strengthen the commitment to review and enhance scrutiny procedures in relation to regulations. That is important for scrutiny and getting things right.

I look forward to further debate this afternoon and to the minister laying out the detail of his amendments and any further draft regulations that will be laid before Parliament and consulted on.

I move amendment 15.

Amendment 17 proposes that the protected minimum amount of bank account arrestment be uprated annually if the Scottish ministers deem it to have materially fallen below the inflation level. The Coronavirus (Recovery and Reform) (Scotland) Act 2022 amended the Debtors (Scotland) Act 1987 to allow the Scottish ministers to vary the minimum protected balances by way of negative procedure. There is an opportunity to strengthen that power in order to provide more protection for vulnerable individuals who are dealing with bank account arrestment proceedings. When that legislation was passed in 2022, I do not think that any of us could have foreseen the huge spikes in inflation that have come our way in the intervening period.

Although I recognise that the existing power allows ministers to deal with sudden changes that will require them to alter minimum protected balances—that regulatory power will remain—my amendment 17 opens up a conversation about whether, in a period of volatile inflation, when the cost of living continues to increase, consideration needs to be given to more regular upratings.

That is not a novel idea. We do that across a number of issues, not least social security payments. We recognise that people who are in receipt of those payments are often vulnerable and need their payments to keep pace with inflation.

Given that, amendment 17 would create a regular requirement for the Scottish ministers to calculate the inflation-adjusted level by the end of each financial year. If they deemed the existing protected balance to be materially below that inflation-adjusted level, they would lay regulations to change the amount. That would ensure that the uprating of vital minimum protected balances would not just be done on an ad hoc basis, as and when ministers were motivated to do that, but that there would be a process for modest but nonetheless important uplifts to those minimum balances on an annual basis, if need be. That would provide greater security and protection to vulnerable individuals who are going through debt collection and who are subjected to bank account arrestment, by ensuring that inflation cannot eat away at the protection that they are already being afforded. That is an important safeguard.

I am pleased that amendment 17 has won the backing of stakeholders. I look forward to hearing the minister’s response, because I know that he has given wider consideration to the issue and I am sure that he will want to comment further.

I will make a brief comment on other amendments in the group. The underlying principle of my amendment 17 is to guarantee more protections for vulnerable debtors, so I welcome the amendments from my colleague Colin Smyth and from Maggie Chapman, which run along similar lines. I look forward to hearing from them on the detail of their amendments and on the difference that they will make to people who find themselves in very vulnerable situations.

I move amendment 17.

On Tuesday, the Cabinet Secretary for Social Justice stood where the Deputy First Minister is and delivered the annual update on progress to tackle child poverty. We know that levels of child poverty in Scotland have been stagnant for 17 years and that, on many measures, they have increased.

The cabinet secretary said:

“our action is making a difference.”—[Official Report, 4 June 2024; c 11.]

At the same time as that statement, the Poverty and Inequality Commission released its annual scrutiny report, which, in relation to the Government’s actions, said:

“Limited progress has been made ... over the last year ... Progress in other areas is slow or not evident at all”

and

“without immediate and significant action, the Scottish Government will not meet the 2030 targets.”

The cabinet secretary told me that the Government is committed to those targets. Does the Deputy First Minister agree with the commission’s analysis of her Government’s actions, and will the Government meet those targets?

It is a pleasure to close this debate on behalf of Scottish Labour.

As we heard from my colleague Daniel Johnson, Labour members have sought to support the aims and principles of the bill. We have heard from members across the chamber that the bill is technical, but I think that it has the scope to make a real impact on many of the challenges that exist in the area. As we know, there is much more to be done.

I join colleagues in thanking Ivan McKee and the previous minister, Tom Arthur, for their stewardship of the bill and the way in which they have engaged. I also thank their officials.

A lot of our debate this afternoon has rightly been taken up with thinking about those in our society who are vulnerable and who, because of the debt that they face or other factors, deserve support to escape those problems and get on to a more stable footing. It is very important that that is approached with compassion.

That is why there has been such strong support for a mental health moratorium on debt recovery actions. We have heard that roundly across the chamber and, indeed, calls for the provisions to be as strong as possible. I was successful in securing an amendment to change “may” to “must”; that small change is important because it shows the intent in the legislation that that must happen and the will of Parliament in supporting it.

We know that the regulations have been drafted and brought forward by the minister, so we hope that the moratorium will continue to progress and come into effect in the near future. However, there are concerns remaining about the strength of those regulations and the protections that will be provided by that moratorium. Those concerns have been outlined by Maggie Chapman, Daniel Johnson and other members.

We know that many organisations, such as Citizens Advice Scotland, have called for the inclusion of protections from eviction or repossession from on-going liabilities. We have also heard, in the exchange involving my colleagues Claire Baker and Colin Smyth, about the need to do more to create a process that would enable access for those who lack capacity. It is clear that there is still time to address those concerns before regulations go through the necessary parliamentary scrutiny. I hope that the minister recognises the concerns of members as well as those of stakeholders, and that he will reflect on some of those in his closing speech and as the bill progresses.

More broadly, beyond the moratorium, we know that the bill could have gone further in many places and could have been stronger. The Economy and Fair Work Committee made a number of recommendations to the Government at stage 1 that have not been taken forward. However, there is the opportunity for further work and dialogue in that regard.

Overall, the bill is an improvement on the status quo. We should not let the perfect be the enemy of the good and the enemy of progress when the scale of the debt problem that Scottish families face is as large as it is. Every positive measure, however small, goes some way in helping them just a little bit more than they are currently being helped.

This is not necessarily the end of the line. There is scope to strengthen and support protections in enhanced regulations or better working practices. We should continue to engage and learn from third sector organisations. We are all grateful for the contribution that such organisations—not least Advice Talks, which Colin Smyth mentioned, Citizens Advice Scotland and Aberlour Children’s Charity—have made in the process. In speaking to the amendments, I mentioned the innovative work that has been done, such as in the Tayside pilot that is run by Aberlour, which provides wraparound support to families in problem debt. We should all engage with such organisations where we can.

To conclude, people have been pushed further into debt in this cost of living crisis. The Money and Pensions Service has estimated that 700,000 people in Scotland are at risk of being in, or are already in, problem debt. We know that those people cannot afford to wait for the perfect solution to come along. We need to use the bill’s provisions to benefit those people. I hope that we will continue to engage on all of these issues, not least the mental health moratorium, in order to try to make as much change as we can.

I do not think so. The issue has been well covered.

The discussion so far has been interesting. We have touched on the importance of intersectionality when it comes to human rights. Do you want to expand on that and on why it is crucial that we reflect on the bill with that at the forefront of our minds? Would you like to add anything on the need for an intersectional approach?