Scotland Bill

Eilidh Whiteford Excerpts

Monday 7th March 2011 Commons Chamber

The hon. Member for The Cotswolds also mentioned an incident that occurred only a couple of weeks ago in Auchinleck, which is in my constituency. Of course, not absolutely everything that appears in the tabloid press is 100% accurate. Only a few weeks ago there was some interesting reporting of a junior football match between Auchinleck Talbot and Cumnock Juniors that suggested that mounted police were involved in something akin to the charge of the Light Brigade. A constituent suggested to me that when the horses came on to the pitch it was more like dressage than a charge, so I understand that things can be exaggerated. However, in an era of mobile phones and 24-hour news, I also understand that any incident witnessed in a local community is likely to get into the public domain quickly, as people will report it to newspapers or online, perhaps on Facebook. Indeed, that is where many of my constituents first heard about the incident in Auchinleck.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the hon. Lady share my experience that the abuse of air weapons often involves not only the cases that make the newspapers, but the distressing circumstances of much-loved family pets being injured or killed when shot at? Those stories never make the headlines, but they nevertheless cause great distress in communities.

[Cathy Jamieson]

I absolutely agree. Of course, those are the types of incidents that local newspapers report far more regularly than national newspapers.

Information about the incident in Auchinleck quickly got into the public domain, some of which was not absolutely accurate. A number of school pupils were injured, albeit by what the hon. Member for The Cotswolds described as a toy BB gun—I have more to say on that in a moment—and required hospital treatment, so I hope that he is not suggesting that it is not necessary to have a serious look at how that gun got into the hands of the people who used it, what they were doing with it and why they became involved in such an incident. To be honest, I recognise where he is coming from in relation to his sporting and shooting interests, but I find it difficult to understand in any event why anyone living in an urban environment would require an air weapon in their home. It is time we looked at the issue, and I hope that that is something a licensing or other regime in Scotland could deal with.

I want to say something about firearms in general. I accept many of the points made by the hon. Member for Perth and North Perthshire (Pete Wishart), but I do not believe that at this stage we require responsibility for the whole range of firearms legislation to be devolved to the Scottish Parliament. However, I do think that it is incumbent on the UK Government—perhaps the Minister will indicate what discussions he will have or has had with Home Office colleagues—to ensure that the provisions of the 1968 Act still stand the test of time. The worst possible thing that could happen is that we devolve something and discover subsequently that we will have to revisit it, for example if the definition of what constitutes an airgun is no longer seen to meet the needs of the legislation we are devolving.

I want to say something on BB guns, because I know that in many instances they are the weapons—I use the word “weapons” rather than “toys” because of the damage they can inflict—that cause exactly the problems that the hon. Member for Banff and Buchan (Dr Whiteford) identified. I also believe that there is a gap in the legislation, because those weapons appear to be easily available, particularly to children and young people. The fact that they are not covered by legislation sends entirely the wrong message. I would be interested to hear whether the Minister will have discussions with his Home Office colleagues to take that forward.

I appreciate that other Members want to comment in the debate and so do not intend to speak for much longer. I feel that the time is right, and I have given the matter careful consideration because my initial response when Justice Minister, as I have said, was that we should not legislate or press for legislation in haste. It is four years since that time, and considerably longer since the incident in Easterhouse, so no one could accuse us of legislating in haste when we take these measures forward.

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[David Mundell]

I welcome you to the Chair, Mr Benton.

I can assure the hon. Member for Linlithgow and East Falkirk (Michael Connarty) that nothing that the Government put forward this evening is in any way determined by the fact that these proceedings are televised. I hope that we are bringing forward a reasoned response to important issues that have been raised in the debate on these amendments.

I wanted, during this discussion, to clarify the SNP’s position, and I am sure that the hon. Member for Perth and North Perthshire (Pete Wishart) will understand why. I think that the logical explanation is that we now have devolution in the SNP, with a London SNP that is proposing an amendment to clause 11 and an Edinburgh SNP that is in agreement with it as it stands. In those circumstances, I find it extremely odd that the hon. Gentleman suggested that he was going to push this matter to a Division. He will have seen the Scottish Parliament’s Scotland Bill Committee report, which, in paragraphs 142 to 144, confirms that it was a unanimous view of that Committee that clause 11 should be supported. It states:

“We note that this excludes those air rifles, air guns or air pistols which are of a type declared by rules made by the Secretary of State under section 53 of the 1968 Act to be ‘specially dangerous’. These particular weapons are already banned and we see no reason why this would change.”

The Committee went on unanimously to recommend support for clause 11.

[Dr Whiteford]

I have here a copy of the Scotland Bill Committee report, which came out last week. If the right hon. Gentleman looks at paragraph 142 and the footnote attached to it, he will see that in fact there was a division on that point and the view was not unanimous at all.

[David Mundell]

The hon. Lady will also be aware of the text of the LCM to be put forward by the Scottish Government. Her Scottish Parliament colleague, Fiona Hyslop, kindly sent it to me, listing several clauses to which the Scottish Government want changes made. Clause 11 is clearly stated not to be one of them.

[Dr Whiteford]

May I once again draw the Minister’s attention to paragraph 142 and footnote 28, which clearly show that two members of the Committee, Brian Adam and Tricia Marwick, caused a split on the issue? Will he acknowledge that for the record?

[David Mundell]

I acknowledge for the record that the vote took place, but I also point out to the hon. Lady annex A, where the minority views on the issues on which her colleagues felt particularly strongly are set out, clearly stating their disagreement.

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[Tom Greatrex]

I support clause 12, but I have a couple of questions about its implications. As the Committee will be aware, this clause and attendant issues were the subject of detailed scrutiny by the Calman commission. It was corporate insolvency practitioners who pressed the case on that commission for introducing such a clause, which effectively re-reserves some aspects of corporate insolvency work.

The Scottish National party has responded with a blanket, knee-jerk reaction against the proposal, because it does not believe that powers should be re-reserved. The Labour party takes a different view. The Calman commission examined the range of powers as a whole, and determined which, in Scotland’s best interests, should be devolved and which should continue to be reserved. As we all know, it concluded that there should be some changes, but not too many. We accept that recommendation, and also the comments of the LCM Committee, but the Scottish Federation of Housing Associations—from which Members will no doubt have received a briefing—has expressed concern about the implications for registered social landlords. Housing policy is, of course, devolved.

I am aware that, as no registered social landlords have been affected yet, the position is theoretical. However, on 25 February the Secretary of State told the convenor of the LCM Committee that the Government did not intend to cause any difficulty relating to housing policy, that they would consider introducing section 104 orders when that was necessary and appropriate, and that discussions were taking place between the Scotland Office and the Scottish Federation of Housing Associations. May I ask the Minister to confirm his intentions, so that we can ensure that the federation’s concern is not used unduly as an excuse to oppose the clause merely because it re-reserves a power, and that it is being dealt with?

[Dr Whiteford]

I am glad to have an opportunity to respond to the amendment in a way that does not involve any sort of knee-jerk reaction. I intend to discuss the substance of the issue, which is the power to transfer power over all insolvency matters and all aspects of company liquidation back to the House of Commons. Currently, certain aspects are devolved.

When the Commission on Scottish Devolution examined the issue it identified some shortcomings in the existing set-up, notably a degree of overlap in responsibility between the rules relating to insolvency governed here and those governed in Holyrood, and a need for consistency across the United Kingdom. As many Members will know, the Calman commission responded to the concerns expressed by, in particular, the Institute of Chartered Accountants and the Law Society of Scotland by recommending that the United Kingdom’s Insolvency Service should be responsible for the rules to be applied by insolvency practitioners on both sides of the border, with the consent of the Scottish Parliament, and that the Scottish Parliament should retain its legislative competence over corporate insolvency.

Members will note that clause 12 goes way beyond the Calman recommendation. It would transfer powers over all aspects of company liquidation to the House of Commons. I urge the Committee to think very carefully about the clause, because I believe it is a rather blunt instrument which could have a number of undesirable and unintended consequences. I suspect that there is broad agreement in the Committee that the existing legislative framework pertaining to insolvency in Scotland could be strengthened and improved, but the real question is how we should go about it. Should we, as the clause suggests, simply re-reserve powers—which might be a quick and dirty way of dealing with the matter—or is there a better way of achieving the desired outcomes of consistency and efficiency?

I fear that clause 12 will create as many problems as it solves. We should bear in mind why the powers were devolved in the first place. The purpose was largely to take account of the distinctiveness of the Scottish legal system. When Professor George Gretton, the Scottish law commissioner and expert on insolvency, gave evidence to the Calman commission, he stated emphatically:

“Insolvency law has to fit in within the general corpus of the law, including such matters as the different court structures, the different systems of what Scots lawyers call diligence, the different systems of property law, and the law of voidable transactions.”

He pointed out that the aspects of corporate insolvency law that had already been devolved by the Scotland Act were pretty much aligned with the areas that were peculiar to Scots law. The issue was thought through carefully in the first place, and I feel that we too should think carefully before unravelling the existing provisions without taking account of the wider implications.The chair of the Scottish Law Commission, Lord Drummond Young, has also expressed concern about the implications for the sensible reform of Scottish commercial law, should these powers be re-reserved.

As the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) has already pointed out, some of the deepest concerns about the consequences of the clause have been expressed by the Scottish Federation of Housing Associations, which has argued against it in the strongest possible terms. Members of that association own and manage 47% of Scotland’s affordable rented housing stock. They have an annual turnover of about £1 billion, and assets worth about £8 billion, so we should not take their concerns lightly. Housing is a fully devolved matter, and the Scottish Parliament has the power to legislate on all aspects of housing policy. There have been a number of changes to housing policy since the advent of devolution, as well as significant policy developments. This has been a dynamic area of activity in the life of the Scottish Parliament.

Back in 2001, in an amendment to the Scotland Act 1998, responsibility for legislation relating to the insolvency of social landlords in Scotland was devolved to the Scottish Parliament. The amendment order was agreed unanimously, with cross-party support, in the Scottish Parliament, and the provision was passed in Westminster. The amendment enabled the Housing (Scotland) Act 2001 and the Housing (Scotland) Act 2010 to address the potential insolvency of registered social landlords. The 2010 Act established the Scottish housing regulator as an independent body to safeguard tenants’ interests and regulate the financial well-being and governance of registered social landlords.

Assessing the risk of insolvency among registered social landlords is an integral aspect of the existing regulatory regime. The 2010 Act also gave additional powers to the Scottish housing regulator to act quickly when a registered social landlord was facing insolvency, thereby safeguarding the interests of tenants and of the wider social landlords sector. There have been no cases of insolvency among Scottish registered social landlords in the past 40 years, but those representing the sector are not at all complacent, given the economic environment in which they are operating and the experiences that they have seen in other parts of the UK. They believe that there needs to be provision for a regulatory authority to deal with such matters in a timely and appropriate way, should cases of insolvency arise.

The regulatory framework that has been established in Scotland is designed to reduce the possibility of a social landlord becoming insolvent by preventing the situation from occurring. I am sure that Members will appreciate the importance of that, not only for tenants and social landlords but for the wider housing sector and other stakeholders. In particular, effective regulation is crucial to the ability of registered social landlords to access lending at competitive prices. The Council of Mortgage Lenders made that clear in its response to the 2007 consultation, and it is estimated that Scottish registered social landlords have saved about £70 million in the past five years by being able to access lower lending margins than are available in the commercial sector.

All this provides a practical illustration of why a strong regulatory framework is important, and why these matters were devolved in the first place. We really should not be rash enough to dismantle that framework. We must also bear in mind the fact that, if we pass clause 12, any future measures relating to the insolvency of registered social landlords would require legislation at Westminster, with all the difficulties of securing time that that involves. We need to recognise the practical benefits of devolution in this area, and not try to reinvent the wheel in our efforts to tidy up the loose ends in the wider insolvency provisions.

In housing, there is a strong case for preserving the coherence and alignment of the legislative policy making and regulatory frameworks. This would be broken if insolvency powers over registered social landlords were to be re-reserved. If the main reason for clause 12 is to tidy up insolvency provision from a UK point of view, it would be most regrettable if it were to make housing policy significantly more untidy in the process. I have a real concern that, in time, such a dislocation of policy from regulation could lead to delays, fragmentation and inappropriate decision making. It would be a retrograde step, and it would reverse recent progressive measures that have had the support of the Scottish Parliament right across the political spectrum.

I urge Members to look again at this matter. We need modernisation of the insolvency provisions; that will be very welcome. This is not the way to do it, however. There are many ways of doing it, and key to the process will be better inter-governmental working. I would also draw the House’s attention to the Scottish Parliament’s Scotland Bill Committee, which took these concerns seriously and recommended that legislative consent on this clause should be subject to certain provisions being drafted. We are not in a position to see those provisions today, so I would urge Members to oppose the clause in the interim, until we have a workable and effective solution before us.

[Michael Connarty]

I am pleased to follow the hon. Member for Banff and Buchan (Dr Whiteford), who has both conflated a lot of issues that are of obvious concern to her party and not been quite open about what happened on the Scottish Parliament’s Bill Committee. We have heard what seems to be a strange argument: the SNP is for devolution unless it does not win the vote, because on a devolved committee the SNP moved an amendment and lost. Then the committee concluded that it was

“content to recommend to the Scottish Parliament that it should give its legislative consent to the provisions in the Scotland Bill relating to the re-reservation of insolvency, subject to provisions being drafted which will secure capacity for devolved legislation to affect the winding-up of Registered Social Landlords”.

On the one hand the hon. Lady is conflating lots of issues of obvious concern to her party, but on the other she is denying the democratic process when it goes against her in the devolved Parliament.

The third thing that the hon. Lady has done is make a case as though that case were not recognised by everyone, on all sides, in the evidence given to this Parliament. Hopefully, the Government are listening to that, and those on our Front Bench have stressed the same points. However, there is another fault that people show when trying to enthuse people—I think that the common phrase is “overegging the pudding”. There has not been a bankruptcy or insolvency of a registered social landlord in Scotland in 40 years, because of the way in which their arrangements are structured. I was active in the early days of the housing association movement as a leader of a council in Scotland. Across all the parties we created a structure that mainly secures registered social landlords from the problems experienced by those landlords who are thirsting for profit and therefore taking risks by borrowing and overextending themselves. Registered social landlords are to be commended because they tend not to get themselves into such situations, which is one of the reasons we set them up as we did.

Everyone takes seriously the point made by the Scottish Federation of Housing Associations, including those on our Front Bench and, I hope, the Government. Therefore, we should have the necessary safeguards to allow the points made by the SFHA to be taken on board. The SFHA is worried about the speed of action should there ever be a problem, and hopefully the final legislation will recognise that. However, we cannot conclude from this that we should therefore go against the recommendation of the Scottish Parliament’s Bill Committee and against common sense in having a system across the UK to address a problem that faces a lot of the corporate bodies and private organisations in the UK at the moment.

[Dr Whiteford]

This is an argument that has come directly from the Scottish Federation of Housing Associations, which is concerned about preventing such problems from occurring in the first place. It is the SFHA that is worried about the environment in which it currently operates. I know that we will shortly debate housing benefit in this House, but one of the SFHA’s concerns is that changes to housing benefit could have serious repercussions for cash flow. It is concerned that the financial position is not as secure as it might have been. That is why we have to take this issue seriously. I wish that I could share the hon. Gentleman’s optimism, but hoping that something might come forward is no way to go through the parliamentary process.

[Michael Connarty]

Allow me to recommend that optimism to the hon. Lady, who is new to the House. That optimism, which I have carried with me for 18 years, might stand her in good stead if she survives as long as I have in this place. They do say—I am quoting Gramsci, the socialist—that pessimism of the intellect should breed optimism of the will. She will certainly require that again and again if she sits on the SNP Benches in this place, I can tell her that.

I am deeply involved in fighting a case involving a bad insolvency in my constituency. In a sense, I have had to step over a line that I have drawn for myself since devolution, where I have had to say, “This is not a matter for me: I have a remit as a UK parliamentarian and my colleagues”—Members of the Scottish Parliament—“have a remit devolved to them.” I try to keep the two apart quite strictly. I try to encourage devolved organisations to write not to me but to my MSP colleagues, and to engage them properly in the process. I was involved in the scrutiny of bankruptcy in Scotland legislation here in Westminster between ’92 and ’97, and knew quite a lot about that. I therefore find the current environment frustrating, as many companies are facing serious challenges because of economic conditions and are having to go through the insolvency process.

Although the case I took on involves what is currently a devolved matter, I knew that re-reservation was being reconsidered, so my conscience was somewhat assuaged. The reality is that the insolvency process is not very pleasant. It is never pleasant for people to be bankrupted or to have their goods and chattels sold by a bankruptcy administrator who seems to be their friend until the moment when they sign the form, and who then turns out to be their enemy. In the case I am currently involved in, there is a house for sale. The insolvency administrator has allowed it to be vandalised, so quite a lot of the financial benefit to the creditors has been lost, and seems to be ignoring any offer from anyone to buy the property.

This issue should be a responsibility across all the Chambers, and I think it makes sense for the same rules to apply in Scotland as in the rest of the UK. The Bill’s provisions would bring them into line. We should all realise that it does not matter which side of the border people are living on or trading in, and that they must be dealt with properly by the insolvency laws and its practitioners. I have serious reservations about the way they are currently regulated. I look forward to this being returned to being a reserved matter so that I can fully engage in it.

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[Dr Whiteford]

Will the Minister clarify exactly which issues remain outstanding with the Scottish Federation of Housing Associations that necessitate a further meeting?

[David Mundell]

Following our meeting with the federation, I wrote extensively on the specific points that I had raised. My interpretation concerned whether Westminster would be as responsive as the Scottish Parliament if new issues arose. It is extremely important to take on board that this is about new issues and not about the adequacy of the Housing (Scotland) Act 2010. That Act is in place, as are the arrangements for insolvency. The issue is whether, if the arrangements that have been put in place did not work and other arrangements had to be brought in, that could be done expeditiously in the House of Commons, and I believe it could. Indeed, one Opposition Member is the former distinguished Communities Minister of the Scottish Parliament and I cannot imagine that she would allow the Government to sit idly by while there were requests for changes to insolvency procedures in respect of registered social landlords in Scotland. That issue is not a basis for continuing concern, but we are committed to the dialogue involving the Insolvency Service and the federation.

It is important to re-emphasise the point that the hon. Member for Linlithgow and East Falkirk confirmed—that the Scottish Parliament’s current powers in relation to RSLs are not whole powers regarding RSL insolvency. They relate only to the winding up and only where it concerns a moratorium on the disposal and management of property held by an RSL, so the Scottish Parliament is not currently able to make provision for all aspects of the law on RSLs. The view of the Calman commission was that the ability to make provision in this area was fragmented and should be returned to Westminster to deal with that fragmentation. Clearly, there are Members who could never agree with the return of powers to Westminster, however sensible that might be, but I hope that on this occasion they will accept that the measure will benefit Scottish business and will not be detrimental to the RSL sector. On that basis, I hope that the Committee will not divide on clause 12.

Question put, That the clause stand part of the Bill.