- The Deputy Convener:
Agenda item 2 is delegated powers scrutiny of the Bankruptcy and Diligence etc (Scotland) Bill at stage 1. My next few words will please members: the bill contains 90 powers to make subordinate legislation. [Laughter.] I knew that that would cheer members up—I can always tell. Many of the powers should present no concerns for the committee, as they are to be given to the Court of Session to make provisions by way of acts of sederunt. However, given the number of powers, we will deal with the bill in bits and will cover only part 1 today. I do not know how many parts there are. [Interruption.] I am told that there are sixteen, so members will grow old with the bill.
Section 1, on "Discharge of debtor", contains a Henry VIII power to prescribe the minimum discharge period following sequestration. The period is to be one year instead of the existing period of three years. In the past, the relevant period has been prescribed by primary legislation, with no provision to amend it through subordinate legislation. The Executive considers that Parliament should have a high degree of scrutiny over any instrument that changes the period and that the affirmative procedure would be appropriate. The committee should note that the period could be lengthened or shortened without restriction.
We must consider whether the matter is an appropriate one for subordinate legislation. I say right away that, at the least, the use of the power should be subject to the affirmative procedure, as the Executive says. Any change in the period would be an important issue that relates to the public interest. The length of time for which people have to wait for discharge—or that they can get, depending on from whose side we consider the issue—is a big issue. Any decision to change it would not be just technical tweaking. I put down a marker that the power to make such a change through subordinate legislation would be a serious one.
- Mr Macintosh:
I agree. I was surprised to hear that such a power is to be given, because the policy of reducing the period of discharge to one year is at the heart of the bill. The period should therefore simply be stated in the bill. If the period needs to be changed, that should be done by primary legislation. I do not suggest that ministers ever make changes on a whim, but the measure is not something that ministers should tweak after a couple of years. The change to the period is one reason why we are introducing the bill, so we should simply agree whether one year is the right period. We will deal with a couple of similar powers, but this is the one about which I feel most strongly. I do not see why the matter should be covered in subordinate legislation at all.
- The Deputy Convener:
You will have gathered that that is my view, too. I am just trying to work out whether that is our business, although I suppose that it is. We can say that the power is not suitable for subordinate legislation, although I suppose that that is a policy decision. However, I believe that the power is not appropriate for subordinate legislation.
- Mr Maxwell:
The deputy convener and Ken Macintosh have stated my opinion fairly clearly. The discharge period is central to many concerns about bankruptcy—people on both sides of the argument argue about it—so it is entirely appropriate to set the period in the bill. Any future changes should not be done through subordinate legislation, even if that was done using the affirmative or super-affirmative procedure. If the Executive wanted to change the period, that should be done through primary legislation. If the policy decision is that the period should be one year, that is fine, but from then on, any policy decision to change it should be introduced through primary legislation.
- Mr Adam Ingram (South of Scotland) (SNP):
The provision perhaps shows that the Executive lacks confidence in its policy. If the suggestion is that changing circumstances are likely to require the Executive to change its mind, that raises the question of how sound the Executive's thinking is in introducing a shorter period. The provision is odd. I agree totally with the deputy convener and other members that we should say to the Executive that the power to alter the period should not be in the bill.
- The Deputy Convener:
We will say to the Executive that the committee is of the strong view that the issue is so important to bankruptcy legislation that it should not be the subject of subordinate legislation. Do members agree?
Members indicated agreement.
- The Deputy Convener:
Section 5 inserts proposed new section 71B into the Bankruptcy (Scotland) Act 1985, which will give a power to make orders in relation to disqualification provisions. The proposed new section contains another Henry VIII power that will allow ministers to make an order in relation to any disqualification provision, as defined in proposed new subsection 71B(2). The Executive considers that the Parliament should carry out a high degree of scrutiny of any instrument that makes or varies a disqualification provision and that it should be subject to the affirmative procedure. The question is whether that is acceptable.
I will kick off again. I would allow that to happen by order under the affirmative procedure. The issue is not quite as crucial as the previous one, which should be dealt with in primary legislation. There is always a line to draw, because eventually we could say that everything should be done through primary legislation. I believe that the proposal is just within what can be done under the affirmative procedure.
- Mr Macintosh:
Taking my lead from you, convener, I feel less strongly about this issue than I feel about the period for discharge of debtors. However, I still question whether the matter should be one for subordinate legislation.
- The Deputy Convener:
Fine.
- Mr Macintosh:
I certainly think that we should ask the same question that we agreed to ask in relation to the discharge of debtors.
- The Deputy Convener:
We have a doubt about this one.
- Mr Macintosh:
Yes. Again, it is fairly central to the way in which we treat bankrupts. In some ways, we are trying to put through a piece of primary legislation that makes it absolutely clear what our view is about bankruptcy and what it is that we are trying to achieve. Therefore, we should come to an informed and decisive view on the matter. However, by dealing with this matter in subordinate legislation, we are saying, "We are going to make this change but we are not 100 per cent sure, and we might change it again." I do not think that that is a good message to send. I think that we should make up our minds about what the disqualification provisions are going to be. However, as I said, I do not feel as strongly about this proposed power as I do about the proposed power that we discussed previously.
- Mr Maxwell:
I agree. I do not feel as strongly about this matter because the change from three years to one year, which we discussed earlier, is a more fundamental change. We hear about that issue quite a lot more than we hear about the subject that section 5 deals with. However, I think that the nature of the issues is the same. The issue that we are talking about at the moment is fairly central to the bill. The Executive's policy should be clear on it and should therefore be included in the bill. I do not think that it is reasonable to say, "We think that this is the policy but we might change our minds and use subordinate legislation to sort it out later." I am not saying that that is exactly what the Executive is saying. However, I am uncomfortable with the matter being dealt with through subordinate legislation.
- Murray Tosh:
I agree with Ken Macintosh and Stewart Maxwell.
- The Deputy Convener:
Shall we indicate that we are uncomfortable and say to the lead committee that we have doubts about the matter? In that way we would make a distinction between the previous issue, which we feel strongly about, and this one, which we have reservations about.
Members indicated agreement.
- Ruth Cooper (Clerk to the Committee):
Do you want us to write to the Executive about it?
- The Deputy Convener:
Whatever you think.
Section 14 relates to "Debtor applications". Regulations under this section will be subject to the negative procedure. Debtor applications are administrative and are not covered by court rules that prescribe procedure, forms and costs when debtors petition sheriff courts for sequestration.
It is not clear, however, that the powers conferred by proposed new subsection 8A(3) of the 1985 act can be regarded as a matter of administration or procedure. The Executive has provided no explanation for the difference in treatment and it is not clear why delegated powers have been thought to be appropriate in this instance.
It strikes me that we should just raise this issue with the Executive, say that we are not clear about it and ask it to explain the situation. Is that agreed?
Members indicated agreement.
- The Deputy Convener:
Section 17 inserts into the 1985 act proposed new section 39A, which relates to the issue of the debtor's home ceasing to form part of the sequestrated estate. Again, the powers here are Henry VIII powers and are subject to the negative procedure.
Proposed new subsection 39A(4) allows ministers, by regulation, to add, remove or vary any of the matters referred to in proposed new subsection 39A(3). In theory, that would allow ministers, by regulation, to delete all the conditions, therefore depriving a trustee of any power to dispose of a family home. Are delegated powers okay for that? If so, might the affirmative procedure be more appropriate?
- Mr Maxwell:
I think that that would be appropriate, at the very least. I am not quite sure why the negative procedure has been chosen in this case. Again, however, I must say that I am uncomfortable with the fact that the power is quite sweeping.
- The Deputy Convener:
There are some questions that we could ask the Executive. For example, which, if any, of the conditions might it wish to remove, given the possible effect on the powers of a trustee? Why are delegated powers necessary at all in some instances, given the discretion that is conferred on the court by paragraph (7)(b) of the proposed new subsection? Other questions are raised in the briefing, and it might be appropriate to ask them in the context of saying that, at the very least, the affirmative procedure should be used because we have reservations about the matter. We could ask those questions and come to our final decision in the light of the answers that we are given.
- Murray Tosh:
As long as our letter to the Executive is weighted towards asking the fundamental question whether the delegated powers are appropriate, I am happy with your suggestion.
- The Deputy Convener:
Absolutely.
- Murray Tosh:
That would be better than getting caught up in the issue of whether the affirmative or the negative procedure should be used. That is a fallback argument that we can use when we have received the response.
- The Deputy Convener:
We can intimate that we have reservations about the issue of the delegated powers and ask for answers to our questions before coming to a conclusion. Is that agreed?
Members indicated agreement.
- The Deputy Convener:
Section 18 relates to "Modification of provisions relating to protected trust deeds". The power here is partly a Henry VIII power. Are we content with that?
- Murray Tosh:
Perhaps it is a Henry VI power.
- The Deputy Convener:
I am afraid that this is getting a bit esoteric for me, given that it is a Tuesday morning.
- Mr Macintosh:
I believe that, in relation to this issue—unlike the other issues relating to the bill—we will see a copy of the regulations before the bill is passed. We should perhaps reserve our comments until we see them.
- Murray Tosh:
However, it would be fair to note that there is a concern about whether the affirmative procedure would be more appropriate than the negative procedure. In reserving judgment, we should make the point that we might want to return to that issue.
- The Deputy Convener:
That is fair.
Section 19 relates to "Modification of composition procedure". Regulations under schedule 4 to the 1985 act will be subject to the negative procedure. Are we content with that?
- Mr Maxwell:
This is another wide-ranging Henry VIII power. I am not sure whether we want the procedure to be negative. As we have said, the bill contains a lot of powers to make subordinate legislation and a lot of the Henry VIII powers are extremely wide. I think that the same concerns exist in relation to almost every issue that has been raised so far.
Again, we have to question the Executive a little further on its motivation for dealing with this issue through subordinate legislation and for wishing to use the negative procedure. It has to come up with some strong arguments in support of those decisions if it wants us to agree with it.
- The Convener:
What is the specific question that you want to ask? Tell us and we will ask it.
- Mr Maxwell:
I would like further detail on the Executive's motivation for wanting to deal with this issue through subordinate legislation and for using the negative procedure rather than the affirmative procedure. If it comes up with a solid argument, that might be fair enough. However, I am not sure that it will be able to.
- Mr Macintosh:
When I read this part of our briefing, I noted that, although the powers are wide ranging, they are to do with changing the nature of the forms, how things are published and so on. For example, at the moment, an offer of compensation must be published in the Edinburgh Gazette and the powers would allow ministers to change that, if necessary. I think that such matters are for subordinate legislation. However, I am not sure whether policy can be fundamentally changed through the use of Henry VIII powers. For example, could section 19 be used to change the rate of 25p in the pound? That would be a fundamental policy change.
- Mr Maxwell:
In effect, that is the point that I was making. The ability to vary or delete is wide ranging.
- Mr Macintosh:
So the answer to my question is that section 19 could be used to change the rate of 25p in the pound.
- Ruth Cooper:
We will have to check that.
- The Deputy Convener:
Do you have enough information to know what to ask?
- Ruth Cooper:
Yes.
- Mr Macintosh:
If the matter is simply one of how the procedures are administered, I am relaxed about subordinate legislation being used. However, if policy could be affected, perhaps subordinate legislation should not be used.
- The Deputy Convener:
Section 22 relates to the modification of offences under section 67 of the 1985 act. Again, this is a Henry VIII power for which the negative procedure is proposed. Normally, the committee is fairly relaxed about the use of subordinate legislation for the purpose of reflecting changes in the value of money and considers that the negative procedure is normally appropriate in that instance.
The only slight problem might be that there is nothing in the bill that would restrict the use of the power to reflecting a change in the value of money. We should say that, before we are content that the negative procedure can be used in this regard, we would like to be sure that that purpose is what the power is required for. Do we agree to ask the Executive to confirm that?
Members indicated agreement.
- The Deputy Convener:
Section 23 is entitled "Creditor to provide debt advice and information package". Regulations made under section 5 of the 1985 act will be subject to the negative procedure. I take it that members have no comments to make on this section.
- Murray Tosh:
The briefing suggests that we could ask why the bill does not specify the period in question. Perhaps members were able to resolve that in the briefing session before the meeting, but I think that we have to ask whether the period is likely to be subject to change. There was a suggestion that the matter had been left for the moment as the Executive had not yet determined what the position was to be. Is there more information on that? Have members reached a different decision in the light of information that is not in the briefing paper?
- The Deputy Convener:
No.
- Murray Tosh:
Would it be reasonable, then, for us to ask whether the period could be specified in the bill?
- The Deputy Convener:
Okay.
Section 26 of the bill inserts into the 1985 act proposed new section 43A, which is entitled "Debtor's requirement to give account of state of affairs". Regulations made under proposed new section 43A will be subject to the negative procedure. Do members have any comments to make or do we believe that that provision in is appropriate?
- Murray Tosh:
I accept that the Executive got that provision right.