This item was published during the term of a previous administration that ended in April 2007
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Statement from Jim Wallace on the abolition of poinding and warrant sales bill
27/04/2000
Deputy First Minister Jim Wallace said: "Presiding Officer can I start by congratulating Mr Sheridan on bringing forward this Members Bill - particularly given that it is the first Members Bill in our Parliament's short history to reach its Stage 1 debate. And it is well recognised that the Bill deals with a very important topic - one that I know is close to his heart and to many members across the chamber - myself included.
There is Presiding Officer, much common ground not only between the Executive and Mr Sheridan but also across the Parliament on this issue. Like him we abhor the archaic and inhumane aspects of the system of poindings and warrant sales. Like him we want to end the indignity that is faced by those most vulnerable who are genuinely unable to pay their debts. Like him we want to consign poindings and warrant sales to the history books. Mr Sheridan's track record on this issue is long and widely known but he cannot claim a monopoly on this issue. Indeed, I know that my coalition partners have had reform in this area as part of their agenda since the time of Keir Hardie.
So there is significant common ground amongst us and I would hope that Mr Sheridan would have common ground with me when I say that what the people of Scotland want to see is a sense of justice and fair play when it comes to debt recovery. On the one hand this entails protecting those suffering from genuine hardship. On the other it demands that those who can pay their debts do so. The majority of people of Scotland who can pay their debts do so and normally do so quickly - but there are some who consistently refuse to do so until forced. That sense of fair play I mentioned would be offended if avoidance by those people was made easier, placing greater burdens on those who do pay their bills.
Another factor that we must take into account is that debts incurred by businesses in the course of commercial transactions must continue to be honoured if our economy is not to be distorted.
Indeed the Justice and Home Affairs Committee itself identified this problem. It said that it "remains conscious of the danger….that immediate abolition of poindings and warrant sales could cause disruption and unintended negative consequences". Of course the Committee went on to say that these concerns notwithstanding the Bill should still be passed.
There are a number of reasons why it is difficult to agree. Firstly, what do we do with a Bill that is manifestly incomplete - importantly we need to work up an alternative that works and achieves the goals we share and, although it would be a matter for Presiding Officer, amendment of this Bill to incorporate that alternative would not be possible. Secondly, passing this Bill without putting in place an alternative to poindings and warrant sales could send a dangerous message that in some way the payment of debts has become voluntary - we cannot allow to let that happen. Thirdly, who will give credit if the chances of getting money back are slim? Inevitably people on low incomes will be thrust into the hands of loan sharks. The most vulnerable will suffer. Everybody wants to protect the vulnerable but this Bill will create more difficulties than it seeks to resolve. The better solution is to make sure that people who genuinely can't pay are not subjected to enforcement action but to ensure that it's still available to use against those who can pay but are trying to avoid their liabilities.
Mr Sheridan argued today - and has done so previously - that abolition of poinding and warrant sales without an alternative would not leave a gap in the debt recovery system. Unfortunately, that is not the case. It is not true that everyone would be susceptible to other forms of diligence. There are people who have no bank accounts to arrest and people whose bank accounts are never in credit. There are people who do not own land or buildings or houses but are in rented property. There are the self-employed whose wages cannot be arrested. Even if one of the existing alternatives is available is Mr Sheridan seriously suggesting that making someone bankrupt or threatening their home would be an appropriate manner of seeking the recovery of a relatively small debt?
The financial consequences that would follow would be devastating. The figures are staggering. Indeed, the total effect on local authorities of simple abolition is estimated to be in the region of £120 million per year - an average of an extra £70 on every individual's council tax bill.
I have explained why we cannot agree to this Bill but I have also said that the status quo is not an alternative. So, let me set out what the Executive will do instead. As our amendment says we will put secondary legislation in place before the summer to add to the list of goods exempt from domestic poinding and warrant sale. But more importantly, we will, before the end of Parliamentary year 2001/2002 introduce legislation to abolish the present system of poindings and warrant sale and replace it with a modern and humane alternative. That is a firm commitment and one I know the Parliament will rightly hold us to.
I can tell you now what the key elements of our reform will be:
- protection of the vulnerable debtor - those who genuinely can't pay; and,
- vigorous pursuit of those who can pay but are reluctant to.
And in so doing we will support of the interests of those who do pay their bills regularly.
We will establish a working group to give effect to these principles. It will be a working group primarily of the Parliament with a wide membership and I would hope that Mr Sheridan for one would agree to be a member. We also envisage that members from the Justice, Social Inclusion and Local Government Committees would be included and that the group would reflect party balance. It will also be important to have an independent external perspective including someone with practical legal experience. I have also canvassed whether Kaliani Lyle of Citizen's Advice Scotland would be willing to be a member and am pleased to be able to say she will. A timetable for the group's work is also important - we would want it to report by December 2001 at the latest.
Presiding Officer, I see this issue as a challenge to our Parliament. We were elected with high hopes about the quality of the legislation we would pass. We were expected to pass considered and comprehensive legislation. Unfortunately, as I have explained, this Bill does not meet these tests despite its laudable intentions. Yes, there is an injustice to attack here. Yes, Mr Sheridan deserves credit for putting the issue so firmly on the agenda. But, this Bill is not the best way of moving forward - what the Executive has suggested is.
If, in this Parliament we have passed radical but responsible legislation that abolishes the system of poinding and warrant sale and puts a modern alternative in its place, this is something we can all be proud of - not least Mr Sheridan. We will have provided important protection for the poor and the vulnerable in our society whilst ensuring that those who can pay debts properly incurred do so.
In the spirit of this Parliament working together to achieve these shared objectives I move the Executive amendment."