Meeting of the Parliament

Meeting date: Thursday, November 9, 2017

Official Report 953KB pdf

---

Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill: Preliminary Stage

The next item of business is a debate on motion S5M-08600, in the name of Alison Harris, on the Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill.

14:52  

I am pleased to open the preliminary stage debate on the Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill. First of all, I thank my colleagues Tom Arthur and Mary Fee for their work in getting the bill to this stage. The bill, which was introduced on 18 May 2017, is being promoted by the trustees of the writers to the signet dependants’ annuity fund. It is the third private bill to be introduced this session and the second to be discussed in the chamber.

It might be helpful if I give members a little bit of background to the fund before I outline the bill’s purpose. The writers to the signet have a long history. The signet was a private seal of the kings of Scotland, and its first recorded use was in 1369. Writers to the signet began as clerks to the keeper of the signet and were officers of the court who were entitled to work on behalf of the Crown. The Society of Writers to Her Majesty’s Signet in Scotland—or the WS Society—was established in 1594 as the professional body of writers to the signet. As I have said, the writers to the signet have a long history; indeed, the society believes that it is the oldest professional body in the world.

The WS Society is now an independent professional body of solicitors. The society is a not-for-profit corporation for public benefit, and it provides legal training and support in the form of library services, research and drafting services as well as charitable trust administration. It also owns and operates the Signet Library in Edinburgh.

Historically, the WS Society looked after writers to the signet and their widows by making ad hoc charitable donations. The fund was formalised by private legislation in 1803 to provide for the payment of annuities to WS Society members’ widows. The legislative rules governing the fund were updated by private acts of Parliament in 1955 and 1965, and the Writers to the Signet Dependants’ Annuity Fund Order Confirmation Act 1982 provided for the fund’s name to be changed from “widows’ fund” to “dependants’ annuity fund” to recognise the fact that women were by then being admitted as members of the WS Society and to reflect the opening up of the fund to orphans as well as widows and widowers. Most recently, the fund regulations were updated to cover the civil partners of contributors to the fund.

The fund is administered by a collector, who must be a contributor to the fund and who is elected annually by other contributors at the fund’s annual general meeting. The committee heard that the number of contributors to the fund is 538, the youngest being in their early 50s and the oldest over 100. Currently there are 141 beneficiaries of the fund—who are known as annuitants—with possibly over 500 potential annuitants, and predictions suggest that the fund will continue to pay annuities into the 2040s. The promoter’s memorandum states that the value of the fund was £55.5 million in April 2016 and that the value of a current annuity is £8,400 per annum.

The decision to close the fund to new members in 1989 was based on changes to the tax regime as a result of the Income and Corporation Taxes Act 1988, which made it more difficult for the fund to compete as a tax-efficient way of saving. Clearly, the closure of the fund has meant that the pool of eligible contributors from which a new collector can be elected has diminished and will continue to do so. One of the bill’s objectives, therefore, is to remove the requirement for the collector to be a contributor to the fund, and the change will open up the eligibility for the post of collector beyond the contributors to the fund.

The bill’s second objective is to amend the definition of “actuary” in the 1982 act to reflect the merger in 2011 of the Faculty of Actuaries in Scotland and the Institute of Actuaries. The promoter’s legal advice is that it is not strictly necessary to change the definition, as any court would interpret the term to reflect the merger of the two organisations, but the promoter has included the provision for the avoidance of doubt.

On the basis of the evidence received, the committee is satisfied with the promoter’s view that there are no alternative solutions that would address the problem presented by the existing requirement for the collector to be a contributor. The committee is also content to update the definition of “actuary” as set out in the 1982 act.

I move,

That the Parliament agrees to the general principles of the Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill and that the bill should proceed as a private bill.

I call Tom Arthur. You have four minutes, Mr Arthur.

It is Mary Fee next.

Has there been a change of plan of which I have not been informed?

Yes.

Well, I cannae guess. I call Mary Fee.

14:57  

Thank you, Presiding Officer, and I apologise for the mix-up.

I thank the convener, Alison Harris, for moving the motion. As this is only the second private bill that has been debated in the Parliament in this session, I thought that members might be interested in some brief information about private bills more generally and why they are necessary.

A private bill is introduced by an outside promoter and makes specific changes to the law affecting the promoter instead of changing the public and general law. Traditionally, many private bills are about updating bits of private legislation that were passed some time ago and which have become increasingly outdated. In that context, there is always a right for people or organisations who consider that a private bill would adversely affect their interests to formally object to the bill. However, in some cases, including the one that we are discussing today, no such objections are received. Nevertheless, the Parliament has an obligation to scrutinise the bill and to satisfy itself that the changes to the law that the promoter seeks are reasonable and appropriate.

As with public bills, most of the detailed scrutiny of a private bill is undertaken by a committee. However, there are a number of important differences between the two types of committee, including the fact that private bill committees are always ad hoc ones that are set up to scrutinise a particular bill. Any MSP who has a close connection to the area that is affected by the bill is prevented from serving on the committee.

The first stage of the private bill committee process is almost equivalent to stage 1 of a public bill and is known as the preliminary stage. There are three aspects to the committee’s task at the preliminary stage: to take evidence and reach a view on whether the general principles of the bill should be approved; to reach a view on whether the bill should proceed as a private bill; and to give preliminary consideration to any objections. If the Parliament approves the bill’s general principles and agrees that it should proceed as a private bill, it goes on to the consideration stage, which is roughly equivalent to stage 2 of a public bill, and then on to the final stage, when the Parliament debates whether the bill should be passed.

The committee is pleased to support the bill’s promoter in its quest to remove the stipulation that the collector be a contributor to the fund and to substitute a new requirement that the collector be an individual. That will open up a wider field of potential experienced candidates for the post of collector and ensure that the fund can be administered effectively in the longer term. The committee also unanimously supports the change to the definition of “actuary” as laid out in the 1982 act to reflect the merger in 2011 of the Faculty of Actuaries in Scotland and the Institute of Actuaries.

Thank you, Ms Fee. Please forgive the confusion. I do not know where it came from, but we will find out.

I now call Tom Arthur to close the debate.

15:01  

Thank you, Presiding Officer. I apologise for any part that I played in the confusion.

I thank our convener, Alison Harris, and my committee colleague Mary Fee for their contributions. I also place on the record my thanks to the committee clerks and the Scottish Parliament information centre for their support.

In my speech, I wish to expand on the issues that the committee considered when it heard evidence from the promoter, specifically on the provision relating to the identity of the collector. I will cover that by highlighting three areas.

First, the committee asked whether the Society of Writers to Her Majesty’s Signet had considered any alternative approaches that would enable the fund to continue to meet the existing requirement for the collector to be a contributor. Solutions such as reopening the fund and changing other eligibility criteria for the collector were suggested. The deputy keeper said that there were no alternative approaches and referred to an actuarial report that advised against reopening the fund to new members, because, essentially, the reasons that prompted the scheme’s closure in 1989 still apply. The committee is content with that explanation and agrees that there is no alternative to widening the eligibility for the post of collector.

Secondly, the committee asked why the collector has to be an individual and whether employing a firm to undertake the role would provide greater flexibility and expertise than employing an individual. The promoter stated that the provision was based on consultation with the contributors, who wanted a named individual in the role. The promoter stressed, however, that the contributors recognised that the role can be undertaken only with the support of a professional firm behind the collector. We were told that all collectors—in living memory, at least—have had the support of their solicitor’s firm.

We inquired further as we wanted to satisfy ourselves about the legal responsibility for any work undertaken by the firm, but the promoter has assured us that the relationship, which is akin to that between a solicitor and their client, is one that all contributors are familiar and content with. The promoter confirmed that legal responsibility for all the functions that are carried out by the collector, whether directly by them or on their behalf by colleagues, rests with the collector. We are content with that explanation and note that all the contributors, as former solicitors, will be more than familiar with the solicitor-and-client relationship.

Thirdly, and finally, we were interested in the promoter’s longer-term plans for the management of the fund when the pool of contributors is significantly diminished. The promoter spoke about the likelihood that, at some stage in the future, the fund will be converted to cash and annuities bought. At that point, the fund would be spent and so wound up. We agree that that seems to be the most appropriate way forward.

With those assurances, the committee recommends that the Parliament agrees to the general principles of the Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill and that the bill should proceed as a private bill.

That concludes the preliminary stage debate on the Writers to the Signet Dependants’ Annuity Fund Amendment (Scotland) Bill.