Chamber and committees

The minister will be aware of several Palestine solidarity camps on campuses across Scotland. Supported by Aberdeen University Students Association and folk across Aberdeen, the encampment at the University of Aberdeen is calling for the university to divest from all investments relating to the arms industry. No money intended for education should be used to fund war, directly or indirectly. Until it fell at dissolution, the university was using the Economic Activity of Public Bodies (Overseas Matters) Bill, which is anti-BDS—boycott, divestment and sanctions—legislation, as an excuse for not divesting.

I ask the minister to confirm whether the Scottish Government stands by its policy note from 2014, which states:

“Exploitation of assets in illegal settlements ... is likely to be regarded as constituting ‘grave professional misconduct’”.

Does he therefore believe that no institution in receipt of public money should be financially engaged in Israel?

I thank all those who contributed to the debate this afternoon and to the discussion of amendments earlier. The Bankruptcy and Diligence (Scotland) Bill might not be the most exciting piece of legislation and this debate is not the most politically heated, as Murdo Fraser suggested. It has not attracted a great deal of attention. However, it does some very important, if small, things to support people who are struggling with debt and poor mental health, while ensuring that creditors are protected, too.

In my closing speech I will focus on what we need to do after the bill passes, as we know it will. We must listen to those who are directly involved in supporting people who are in debt and who struggle with mental ill health, and we must listen to those who have direct lived experience of both of those. Citizens Advice Scotland and others remain concerned that the regulations that we have in draft form, which will bring the mental health moratorium into effect, will not completely deliver the policy intent of the bill. It is not clear, for example, that the regulations will provide the space and security that are needed for individuals to prioritise their mental health recovery or to halt the vicious cycle of increasing debt and worsening mental health.

We know that recovery from mental ill health is never a linear process. It can cycle through improvements and setbacks and can be totally derailed by unpredictable and unforeseen events. People who have severe mental illness face many barriers to much-needed support, and treatment and crisis can fluctuate. The situation is often enduring, and one-off treatment or one-off support may not work or deal with the issue. In fact, it is very rare that one-off treatment is all that will be required.

As Colin Smyth has outlined this afternoon, for the mental health moratorium to be effective, it needs to do some very specific things. It needs to protect individuals from eviction. We cannot expect somebody to take their mental health recovery seriously if they are worried about losing their home. The moratorium needs to protect individuals from debts that are accrued after it is awarded, including by removing the requirement for maintaining on-going payments. The creditor’s right to challenge or request cancellation of a mental health moratorium needs to be removed. Those are the kinds of issues that we need to take seriously as we consider the draft regulations in the coming months. I hope that the Scottish Government will listen to those concerns and will amend the draft regulations before they are brought to Parliament for approval.

The Bankruptcy and Diligence (Scotland) Bill matters. It will make a significant difference to a number of people who need it to work for them if we get the regulations right, if the eligibility criteria are set wide enough, if we ensure that the legislation does not embed stigmatising measures such as a register, and if we ensure that it gives people the security and safety that they need to deal not only with their mental health recovery but with their debts. That will be good for them, for their families and their communities, and for creditors.

We need a clear statement in law that arrestment of benefits is not competent. I hope that I am not the only member who believes that it should not be possible to take away from people child or adult disability payments, Scottish child payments or any other benefits to which they are entitled.

My amendment 24 seeks to make that clear in the bill because, as Colin Smyth has already stated, that practice still happens. In earlier discussions, a similar proposal was criticised because it might be difficult for banks to know which money is which. However, that is addressed in amendment 24, with instructions to the court when an action under section 73M of the Debtors (Scotland) Act 1987 is raised.

Courts understand what is or is not a benefit payment. Bank statements can be used to confirm that. Therefore, I am not asking banks to determine what would or would not be competent. That is completely in line with what the courts held in North Lanarkshire Council v Crossan and Airdrie Savings Bank in 2008 and in McKenzie v City of Edinburgh Council in 2023.

Amendment 24 would put the issue beyond doubt. Because it also has an express waiver in it to prevent banks from being held liable, it gives them protections that they currently do not have. I believe that it would also reduce the need for the use of notices of objection. Currently, in many cases, the courts have held that, where funds are benefits, they are protected. However, because the decision of one sheriff is not binding on other sheriffs, the practice continues of taking benefit money, even when it has been shown that it is benefit money.

Added to that, many people would not feel able to challenge such arrestments, as they do not want to go to court or are scared of doing so. I hope that the amendment will avoid their having to do that.

As we look ahead to changes in how social security in Scotland functions, thinking specifically about the forced migration to universal credit that is being rolled out, more people will likely have more than £1,000 in their bank account at certain points in the month, as their housing costs and support for their children will be getting paid with their universal credit. Scottish child payments will add further to the amounts of money that people might have in their bank account at any one time, so it is possible that the protected minimum balance of £1,000 will not be enough to help people.

Another criticism of the proposal is that it is not clear how the ban would interact with that protected minimum balance. My answer is that it is quite clear that it does not. If the arrestment is incompetent or void, the funds must be released in full and the protected minimum balance is not activated.

The situation is different when wages and benefits are mixed together. Then, the protected minimum balance is activated, but the arrestment of the benefit section is not competent, although the arrestment of the wage section is. It is then appropriate, under section 73Q of the Debtors (Scotland) Act 1987, for the court to decide on how much to release.

I ask that members across the chamber support amendment 24, as I believe that it gives people protection of the benefits to which they are entitled. I confirm that we will also support Colin Smyth’s amendments in the group.

I am pleased to speak on behalf of the Scottish Greens in support of the bill. I express my sincere thanks to my colleagues on the Economy and Fair Work Committee and to the clerks and SPICe researchers who supported our scrutiny of the bill during its earlier stages. I also thank Tom Arthur, as the minister who was previously responsible for the bill, and Ivan McKee for their willingness to engage, and for the time that they have taken over the past few months to discuss different elements of the bill.

Perhaps most importantly, I thank all the organisations and individuals who contributed to our scrutiny, in person at committee, in written evidence and briefings and in meetings. Citizens Advice Scotland, Advice Talks Ltd, Money Advice Scotland, the Child Poverty Action Group and so many others have all helped to make the bill, and the regulations that accompany it, stronger and more robust.

During our committee scrutiny, we spent much time on the very important mental health moratorium that the bill will introduce. I believe that it is right that we give proper consideration to small but potentially transformative issues, and the mental health moratorium is just that. In the midst of the technical changes to our bankruptcy and diligence law, there is the potential for us to make the lives of people who are struggling with debt and poor mental health much more manageable.

As we heard clearly in committee, debt has a huge impact on mental health. Participants in the engagement session that we held with One Parent Families Scotland and the Poverty Alliance told us their personal stories of mental health issues spiralling out of control because of the pressures of debts, alongside other issues associated with family, work, physical health and so on. The session was very effective.

As Becca Stacey from the Money and Mental Health Policy Institute said,

“we know that people with mental health problems are three and a half times more likely to be in debt, and that half of the people who are in problem debt are experiencing a mental health problem.”—[Official Report, Economy and Fair Work Committee, 20 September 2023; c 2.]

It is a vicious circle. Debt and poor mental health are clearly linked, and are reinforcing.

I am pleased, therefore, that the Scottish Government has, in producing the draft regulations that it has laid for the mental health moratorium, listened to the lived experience of those who have struggled with both mental ill health and debt, and to the advice from those who seek to support them.

The widening of the moratorium’s eligibility criteria to include people who do not have a compulsory treatment order will benefit many people, giving those who are receiving voluntary treatment the much-needed support that the moratorium provides. However, as Daniel Johnson outlined, we believe that we still need to do more in that space, and the eligibility criteria remain too narrow.

With regard to the regulations, there are other aspects that still give me cause for concern. I remain to be convinced that the register is appropriate, even though what is proposed is not a public register. We heard clearly in evidence that a register could exacerbate the stigma that is experienced by people who are struggling with both poor mental health and debt. That stigma comes not necessarily from the information being publicly available, but simply from people knowing that there is a register at all. Stigma destroys people’s lives, and we should not be reinforcing structures and systems of oppression that we know will stigmatise vulnerable people. I therefore look forward to future scrutiny of the regulations with interest.

A final issue is the need for financial advice and support organisations and others to have the support, training and resources that they need to do their jobs effectively. The legislation will not have the positive impact that is intended if front-line debt advisers and mental health professionals do not have the time, training or resources that they need to do their jobs. Specialist trauma-informed training and support will be needed so that they are adequately equipped to support people who are struggling with both mental ill health and debt.

I do not have time to address all the other issues in the bill just now, but I look forward to the rest of the debate, and I am pleased to support the bill.

Before I speak to my amendment 25, I put on record my thanks to the Minister for Public Finance, to Tom Arthur, the minister who previously had responsibility for the bill, and to all those I have had conversations with over the past few weeks about amendments. I am also very grateful to all those who have provided briefings and information in advance of this afternoon’s discussion.

I confirm that we will be supporting Colin Smyth’s amendments in this group.

My amendment 25 would require sheriff officers to try and serve a 14-day charge for payment by post or digitally first, before they decide to serve it personally. It does not interfere with the other amendments in the group, as Colin Smyth has said.

The reason why the amendment is important is that more than 200,000 charges for payments are served each year, and the cost of postal diligence—when sheriff officers add fees to people’s debts—is £48.01, while the cost of the personal service is £96.27. The cost of the personal service is therefore twice that of postal diligence.

The amendment could therefore save people, some of whom will already be struggling with debt, £9 million to £10 million a year in sheriff officer fees. That would not cost the public purse any money, it would significantly reduce the amount of debt that people need to pay, primarily for council tax, and it would not cost sheriff officers anything. It would just reduce the profitability for those sheriff officers of doing diligence in the way that they currently do.

I have a brief follow-up to Claire Baker’s questions. What would the implications be if we did not approve the instruments that we are considering today? I suppose that that comes back to the question about the delay. I hear what you say about wanting to comply with the 2021 act, but what would the implications be if we waited, carried out all the consultation that you intend to do anyway and got it right first?

Good morning, minister, and thank you for your opening remarks.

Following on from that, and thinking about the ambition to halve the disability employment gap by 2038, I would note that over the past few weeks several panels have told us that it is not actually very ambitious and that there should be no disability employment gap at all. I am interested in hearing your response to that challenge that the target lacks ambition and that there should be no gap. Why would we tolerate just halving that gap over the next 14 years? Why are we not seeking to eliminate it?

There was a lack of direct engagement with people who are in debt as the regulations were pulled together. There was clearly discussion with people from the advice sector, but not much with people who are in debt directly. What will be the impact of the regulations for people who are in debt—for consumers themselves?

I think that other members might pick up on some of those points in a little bit more detail.

My final question is on the no one left behind approach and on bringing together that partnership and collaboration that you have talked about. The committee heard contrasting views not necessarily of how successful the approach had been, but of what its impact was; indeed, organisations and people working most closely with those with lived experience said that they did not always see the positive impact of the approach. How, then, would you assess the impact on disabled people themselves? You have talked about culture change, and clearly there has been an impact on how organisations work—indeed, we have heard as much—but do you think that that is flowing through to positive change for disabled people themselves?

Yes.