Chamber and committees

The committee is aware that, when considering the draft bill that was attached to the Scottish Law Commission’s report on moveable transactions, the Scottish Government arrived at the view that the provisions relating to financial collateral arrangements and financial instruments were not within the Scottish Parliament’s legislative competence. For that reason, the bill, as introduced, did not include those provisions. Instead, as we have always made clear, our intention is to seek a section 104 order under the Scotland Act 1998 to make the necessary provision.

We recognise and share stakeholders’ view that it is important that the bill’s provisions apply to financial collateral and financial instruments. I know that you, convener, recently wrote to the Scotland Office in connection with progress on the section 104 order and I have had the benefit of seeing the response. I hope that the committee is assured that good progress is being made. As I have offered before, I will continue to keep the committee updated on further progress.

I reiterate that any eventual section 104 order will be capable of being made only once the bill has been passed, so the timescales will be dictated by the parliamentary timetable. Our target for commencing the legislation—assuming that the Scottish Parliament passes it—has always been the spring or summer of next year, as that is when the registers and regulations should be in place. That should give us ample time to get the necessary agreements on the section 104 order so that the provisions that are not in the bill, as introduced through the section 104 order, will be able to commence at the same time as the registers.

The bulk of the amendments in the group are outwith the Scottish Parliament’s legislative competence, so I am unable to support them, as they would put the passing of the bill at risk. Therefore, I ask Jeremy Balfour not to press them—I appreciate the remarks that he made with regard to them being probing amendments.

Although most of the amendments in the group simply seek to reinsert the provisions that we removed prior to introduction because we considered them to be outwith legislative competence, there are two amendments that are slightly different, albeit that they raise competence concerns of their own.

Amendment 56 attempts to change the position that would apply pending the passing of the section 104 order. I am aware that that was initially suggested by a number of academics, as well as the Law Society of Scotland. However, we have engaged with the academics and practitioners on the SLC’s working group on that point and they are now content that matters should be left as they are pending the passing of a section 104 order. The Scottish Government believes that any attempt to say that the two regimes can coexist without making bespoke provision to reconcile any conflicting rules would be unclear, be unhelpful and raise legislative competence issues.

Amendment 84 imposes a reporting duty in relation to progress on the section 104 order. I hope that, from my correspondence with the committee to date, it is clear to members that there is no need for such a duty because I am fully committed to keeping the committee up to date on progress. Those updates will be provided as and when progress is made rather than be tied to an arbitrary date that might not be appropriate.

For those reasons, I ask Jeremy Balfour not to press any of the amendments.

On amendment 65, I simply reiterate the point that I made in my earlier remarks that I do not deem it necessary. Indeed, I would highlight again the provision in section 116—“Interpretation of Act”—specifically subsection (2), which states:

“Where, under or by virtue of a provision of this Act, however expressed, a person (“P”) is required or permitted to proceed in some way, the provision is to be construed as if any reference in it to P includes a reference to any person authorised by P to proceed in such a way on P’s behalf.”

I hope that that reassures Mr Balfour and the committee that amendment 65 is not required.

Amendment 1 agreed to.

Section 3, as amended, agreed to.

After section 3

Amendment 57 not moved.

Section 4—Assignation of claims: insolvency

Carol Mochan’s amendments would remove the ability of debtors and assignors to agree to waive defences that, in relation to a claim, the debtor might have against the assignee. Her amendments seek to remove that right as a whole but also, alternatively, to remove specifically the right of individuals who are not acting in the course of a business and sole traders to make such an agreement.

I know that the committee said in its stage 1 report that it had considered whether the option to waive defence clauses should be removed for all but that it was mindful of the potential impact of that on business freedom and on small businesses that may wish to retain that possibility.

I recognise that Ms Mochan asked for reassurance. I would therefore like to state on the record that I met Colin Borland, policy lead for the Federation of Small Businesses in Scotland, and asked whether it had any concerns about waiver of defence clauses. The FSB indicated that it had not received any representations from its members on that subject and did not have strong views on it.

The Scottish Government has also not received any representations from members of the public about the practice of waiver of defence clauses. It therefore seems that they are not an issue of concern to stakeholders, and it would be unfortunate if business freedom to make such agreements were to be removed in the absence of any harm being identified.

Amendment 51 would place a duty on the Scottish ministers to prepare and publish a report setting out the impact of the waiver of defence clause in section 13(1). We will want to continue dialogue with organisations such as the Federation of Small Businesses to gauge how the legislation is helping or, possibly, hindering them, and we will learn from that engagement. A formal review after a prescribed period of time seems unnecessary given the lack of any indication of current problems. That would be dictating now the use of future resources when there may never be any issue with the provision, and attention may be better used elsewhere.

There were two material health transfers, in which funding has been provided from the centre. Those are £135 million of resource funding and £292.5 million of indirect capital funding to support research and development expenditure.

The additional funding has been provided to support the health and social care portfolio activities, including funding the agenda for change pay uplift in 2022-23. More than £500 million has been provided to deliver an average pay uplift of 7.5 per cent for agenda for change staff, and that has been funded through the £400 million of reprioritisations that were outlined in the emergency budget review, alongside the additional resource that has been provided via the spring budget review.

A huge array of policy areas will impact on net zero. We recognise that heating buildings is a hugely significant area, and it is one of the big policy challenges that we face—and not just in Scotland; all Governments face that challenge. We are providing a range of support to assist domestic and non-domestic properties, ensuring that we become more energy efficient in helping to decarbonise heating. We recognise that, for the specific budget lines, demand has not been what was anticipated, and that is why we have been undertaking work, within the relevant policy leads, to understand the reasons behind that. We are acting on that to seek to incentivise demand in future years.

I recognise the interest in the matter, and if the committee would appreciate more written detail on the design of the schemes and how the experience of this financial year is informing future action, I would be happy to provide that.

Yes, and I said that I would be happy to come back to the committee in writing and to provide more clarity around the figures.

Because of the accounting treatment. Craig, do you want to take that question?

I will respond to that specific point in writing.

No.

As was outlined previously in the emergency budget review, the £400 million comes from reprioritisation within the health and social care portfolio. Of course, savings have been made, which were identified in the EBR process. Money was returned to the centre, which was then reallocated.