Meeting of the Parliament

Meeting date: Thursday, September 21, 2017

Official Report 876KB pdf

Edinburgh Bakers’ Widows’ Fund Bill: Preliminary Stage

The next item of business is a debate on motion S5M-07584, in the name of Tom Arthur, on the Edinburgh Bakers’ Widows’ Fund Bill.

I am pleased to open the preliminary stage debate on the Edinburgh Bakers’ Widows’ Fund Bill. I thank the other members of the Edinburgh Bakers’ Widows’ Fund Bill Committee—Alison Harris and Mary Fee—for their work in getting the bill to this stage.

The Edinburgh Bakers’ Widows’ Fund Bill was introduced on 20 March 2017 and has been promoted by the trustees of the widows’ scheme of the Incorporation of Bakers of the City of Edinburgh. The overall objective of the bill is, in essence, to transfer the property and assets of the widows’ scheme of the Incorporation of Bakers of the City of Edinburgh to a new charitable trust. The bill is the first private bill to be debated in the chamber this session. It is not a controversial bill and no objections to it were received.

The first thing that struck me about the bill was its title. I must admit to having been unfamiliar with the fund. The committee gained some insight into the history of the rules governing trading corporations in Edinburgh and how they now affect trade some 200 years later. The Incorporation of Bakers of the City of Edinburgh was originally one of the trade corporations set up in medieval times to regulate trade. In 1803, a scheme was formed to provide a fund for bakers’ widows and an act was passed in 1813—the Edinburgh Bakers’ Widows’ Fund Act 1813—authorising the scheme. The fund was established to provide financial support to the widows of contributing members. The last contribution to the fund was made back in 1981 and the last annuity paid under the scheme was in 1997. Since then, there have been no qualifying beneficiaries.

During the promoter’s evidence to the committee, Lady Elizabeth Drummond explained that the question of introducing a private bill was raised a number of years ago. She said:

“We had this widows’ fund for which the number of trustees was getting smaller—people were dying and nobody was around to look after it ... we saw that it would not be attractive or viable because of the very baroque entry requirements under the Edinburgh Bakers’ Widows’ Fund Act 1813 ... you had to be male and under 45 ... and ... the benefits that might accrue to anyone were so vague and difficult to understand that it would not be an attractive vehicle for people to put their moneys into.”—[Official Report, Edinburgh Bakers’ Widows’ Fund Bill Committee, 14 June 2017; c 3,4.]

Consequently, the trustees were left with a fund of considerable value. However, it was simply not viable to promote the fund as, for example, an investment vehicle or annuity provider in competition with large pension providers as, according to Lady Elizabeth Drummond, the trustees

“would be trying to set up something in competition with, say, Standard Life”.—[Official Report, Edinburgh Bakers’ Widows’ Fund Bill Committee, 14 June 2017; c 6.]

In 2013, the trustees decided that the scheme should not continue to operate in its current form and formally closed it to new members. Currently, there are two wives of contributing members who could qualify in the future for annuities if they were widowed. The promoter has advised that the wives have agreed to accept a payment in lieu of potential future annuities to which they might have been entitled as widows in terms of the 1813 act.

In place of the fund, the trustees propose to set up a new charitable trust that would make use of the money that has been invested by supporting education and training and being promoted through the baking community. In response to the committee’s queries about the purpose of the original fund being in line with that of the new charity, the promoter explained:

“We felt that that was the best way to go to make a genuinely good use of the assets in line with the spirit of the Incorporation of Bakers of the City of Edinburgh, so that we could get practical modern usage out of the money ... by ... promoting baking in the city of Edinburgh. That was one way to use the money, and creating a charitable vehicle was the way to encase it in a fully responsible mechanism that fits today’s purposes.”—[Official Report, Edinburgh Bakers’ Widows’ Fund Bill Committee, 14 June 2017; c 8,9.]

The purposes of the new trust are the advancement of education by supporting education and training opportunities in baking; and the advancement of the arts, heritage, culture or science by providing public information and promoting an appreciation of local baking and the history of the baking trade, particularly in Edinburgh. The new trust—the Incorporation of Bakers of Edinburgh Charitable Trust—has been approved by the Office of the Scottish Charity Regulator.

On the basis of the evidence received, the committee is satisfied that the 1813 act has clearly become outdated and restrictive and that the trustees are correct in seeking a practical way of allowing the money in the fund to be redirected to a new set of objectives.

I move,

That the Parliament agrees to the general principles of the Edinburgh Bakers’ Widows’ Fund Bill and that the bill should proceed as a private bill.

First, I thank the committee convener, Tom Arthur, for moving the motion. As he said, this is the first private bill to be debated in the Parliament this session and, as such, I thought that members might be interested to have some brief information about private bills more generally and why they are necessary.

A private bill, which is introduced by an outside promoter, is about making specific changes to the law affecting the promoter rather than changing the public and general law. In practice, many private bills are about updating bits of private legislation that were passed a long time ago and which have, therefore, become increasingly outdated. In today’s case, the act dates back to 1813.

With private bills, there is always a right for the people or organisations who consider that a bill would adversely affect their interests to formally object to the bill. However, in the case of the Edinburgh Bakers’ Widows’ Fund Bill, no such objections were received. Nevertheless, the Parliament has an obligation to scrutinise the bill and satisfy itself that the changes to the law that the promoter is seeking are reasonable and appropriate.

I had no real awareness of private bills before being nominated for membership of the committee, and I have had an interesting insight into this little-known aspect of the Parliament’s work. As with public bills, most of the detailed scrutiny of a private bill is undertaken by a committee. However, there are some important differences between the two types of committee, including the fact that a private bill committee is always an ad hoc committee that is set up to scrutinise a particular bill. Any MSPs who have a close connection to the area affected by the bill are prevented from serving on the committee.

The first stage of the private bill process, which is roughly equivalent to stage 1 of a public bill, is known as the preliminary stage. There are three aspects to the committee’s task at the preliminary stage. First, it takes evidence and reaches a view on whether the general principles of the bill should be approved. Secondly, it reaches a view on whether the bill should proceed as a private bill. Thirdly, it gives preliminary consideration to any objections. If the Parliament approves the general principles of the bill and agrees that it should proceed as a private bill, the bill goes on to the consideration stage, which is roughly equivalent to stage 2 of a public bill, before going on to the final stage, at which the Parliament debates whether the bill should be passed.

The Edinburgh Bakers’ Widows’ Fund Bill has now reached the conclusion of the preliminary stage and the committee is pleased to support the promoter in its quest to set up a charitable scheme that will not only make good use of the moneys contained in the fund but should offer other benefits to the wider community in the future, as we heard in Tom Arthur’s speech.

Before I move to the main focus of my speech, I thank the clerks to the committee for the help and support that they have given not only to me but to my colleagues on the committee, Tom Arthur and Alison Harris.

The convener outlined the bill’s objectives—in effect, the general principles—and, in closing the debate, I will focus on the second part of the committee’s role at the preliminary stage: satisfying itself that the bill should proceed as a private bill. One of the aspects of that role is for the committee to satisfy itself of the adequacy of the accompanying documents to allow proper scrutiny of the bill. The promoter’s statement sets out how the promoter has notified and made information available to those who are likely to be affected. As with any public bill, the explanatory notes aim to summarise objectively what each provision does. Finally, the promoter’s memorandum must set out the bill’s objectives, whether alternative ways of meeting those objectives were considered and, if so, why the approach that is being taken in the private bill was adopted and what consultation was undertaken.

I will not go into the detail of the committee’s consideration of the explanatory notes and the promoter’s statement; suffice it to say that the committee was satisfied that the documents met the necessary requirements. However, I will say a bit more about the promoter’s memorandum. The convener, Tom Arthur, has outlined the bill’s objectives, and the committee was content that the memorandum sets those out in adequate detail. As for alternative ways of meeting the bill’s objectives, the trustees considered a number of options for transferring the assets and liabilities of the fund to a non-statutory charitable body and settled on a deed of trust that would be regulated by the Office of the Scottish Charity Regulator.

Having agreed a structure, the trustees then considered various mechanisms to effect the transfer to the new trust, including application to the Court of Session to have the terms of the trust varied. In that context, the committee noted that the new charity would have a significant change of purpose—from providing financial support for widows to supporting education on and training in baking.

The committee was aware that the law recognises that arrangements for administration trusts such as the widows’ fund can become outdated over time and that it is possible for the courts to approve additional administrative powers, for example. However, in general, the courts will agree only to change the purposes of a trust to something closely aligned to its original purpose. The promoter considered that none of the alternative remedies would enable the trust’s purpose to be changed and concluded that the most appropriate method of amending the fund’s objectives was to promote a private bill.

The committee was content that the promoter had carried out adequate consultation with members of the incorporation, with the two wives of contributing members of the fund and with OSCR.

In conclusion, the committee was satisfied that the accompanying documents were fit for purpose and that, overall, the bill should proceed as a private bill.