HC Deb 02 March 1973 vol 851 cc1879-87

Order for Second Reading read.

12.45 p.m.

Mr. Gregor Mackenzie (Rutherglen)

I beg to move, That the Bill be now read a Second time.

The House will know that there has recently been a great deal of public discussion about the practice and principle of warrant sales in Scotland. In common with the majority of my parliamentary colleagues, I have received many representations on this subject from individuals and, indeed, from interested societies. I have received communications from the Royal Scottish Society for the Prevention of Cruelty to Children and from the Scottish branch of the British Association of Social Workers concerning warrant sales as a form of diligence. All of them have made clear to me that in the many cases where goods have been poinded they are essential items of household furniture. In consequence, great distress is caused to families who see their vital possessions disposed of, and then for trifling sums, because of their inevitably low second-hand value. The family are thus deprived of necessities without even a substantial reduction in the debt being achieved.

All these individuals and societies who have written to me point out that warrant sales, with all their attendant local publicity, cause great hardship and distress without being of much value to the creditor.

I must confess, therefore, that my first thought on succeeding in the ballot was to present a much wider Bill than the one I present now. I considered whether the sale should take place in the home of the debtor rather than that it should perhaps take place in a central auction room, thus avoiding the local unpleasantness and perhaps fetching a better price. However, the more I thought about all the difficulties the more I became persuaded that the subject required much more expertise than that of a private Member and that the whole question of warrant sales as a form of diligence should be looked at in depth by the appropriate legal authorities.

It was with much gratification, therefore, that I learned that the Law Commission is currently engaged on a major exercise on diligence in Scotland, and I am sure that I speak for many of my colleagues on both sides when I say that I look forward to seeing in the commission's final report particularly its suggestions for radical reform.

In the meantime, the Bill which I am presenting, modest though it may look, is an important one and goes a long way to alleviate some of the hardships and distress caused to families.

In a nutshell, I am seeking to exempt essential items of household furniture from warrant sales. I will not weary the House with a detailed explanation of why I take this view, since I think it to he self-evident in view of all the cases which we know and understand.

Clause 1(1) defines the test to be applied to the exemption of articles from poinding. I have set out a list of the articles in subsection (2), but they are to be exempted only if subsection(1)(b) applies; that is, they are required to enable the debtor, his family and his dependants to continue to live in their homes without hardship.

Subsection (2) defines the categories of articles which I think to be essential to the continued pursuit of those personal or family activities without which normal family life would be insupportable or, indeed, impossible. I envisage that crockery, cutlery, cooking utensils and electric fires would be covered by this exemption, in the same way as I have listed beds, chairs and other items of household furniture. I think that the list which I have published in this subsection is about right, but it may be that in Committee some argument and discussion could take place on whether I have achieved a proper balance.

Subsection (3) empowers the Secretary of State for Scotland to specify by order any additions, deletions or variations to the categories which I have listed should experience prove this to be necessary.

Subsection (4) provides for the right of appeal to the sheriff by the debtor against the poinding of any particular article or articles. The House will know that under existing law an aggrieved debtor who feels that an essential item, such as tools of the trade, has been unlawfully poinded may seek to prevent any subsequent sale by warrant of that item by means of interdict. Whilst this remedy will still be available, I am sure that there will be debtors who will not be aware of it; and the proposed statutory provision for appeal I believe to be advantageous in terms of simplicity and in the precise definition of the appropriate grounds on which an appeal may properly be made.

Subsection (5) describes the appeal provision which is contained in the earlier subsection and would apply notwithstanding the provision of Section 249 of the Local Government Act 1947.

Subsection (6) modifies very slightly Section 20 of the Small Debt (Scotland) Act 1837—an Act which I am sure that the whole House will be very familiar with—and subsection (7) saves the existing exemptions I have already mentioned, such as workmen's tools.

I think it worth saying just a word about subsection (8), which makes provision for the inclusion of residential caravan dwellers by the application of Section 29(1) of the Caravan Sites and Control of Development Act 1960. This is an important provision, because all of us know that at present there are a number of people who choose to live, or who have to live, in caravans, and this sub- section is designed to protect their interest.

In presenting the Bill to the House I have deliberately refrained from giving any dramatic examples such as have been sent to me from time to time. We all know of the dramatic cases mentioned in the newspapers. But I confess that my concern is primarliy for the hundreds of poor families who, because of their inability to manage their affairs, or because of sickness or unemployment, have found themselves in a difficult position. The Bill will, I trust, help them in their time of difficulty.

I would be less than honest if I let it be thought that someone like myself with a very limited knowledge of the law was responsible for drawing up this Bill in its entirety. I am much indebted to many people who have given me advice and guidance on these important matters. I think it is a useful Bill and one which will be welcomed by all who are concerned with social work in Scotland, and trust that the House will see fit to give it a Second Reading and ensure its easy passage through its remaining stages in this House.

12.50 p.m.

The Lord Advocate (Mr. Norman Wylie)

I am grateful to the hon. Member for Rutherglen (Mr. Gregor Mackenzie) for instituting the Bill. I congratulate him on the way in which he has presented it. He presented it in so clear and lucid a way that there is little I can possibly say by way of explanation of it.

There is only one point which I should like to make. The hon. Member referred to the Scottish Law Commission presently being engaged on a general review of the whole law of diligence. I should explain to those hon. Members who are, perhaps, not entirely familiar with the law of Scotland that diligence is the process by which a moveable property, the personal property, of a debtor can be attached by the creditor in settlement, inter alia, of a judgment debt.

We are dealing here with one branch only of the law of diligence. There are other aspects of the law of diligence, such as arrestment for earnings. We are dealing here with the arrestment of that moveable property which is in his possession. It is the settlement of a judgment debt.

It has long been recognised, so far as attachment of earnings is concerned, that the harsh effect of the law had to be minimised or reduced. For a very long time now under the law of Scotland it has not been possible to attach the whole of a person's earnings, and successive administrations over many years have altered the level of earnings which must be left for the maintenance of the judgment debtor—if I may use an English expression. Once again, the same sort of principle has been applied by the common law of Scotland in the situation with which we are concerned, but it has been very restricted. It has been restricted entirely to tools of trade, on the view that no creditor should be able to attach in settlement of a debt those tools of trade which are necessary for the debtor to earn his livelihood.

What the hon. Member for Rutherglen is doing here, which I and the Government wholly support, is to extend that principle beyond what is necessary to enable the debtor to earn his livelihood to those assets within the home which make it possible for him to remain there with his family and other dependants without undue hardship. As the hon. Member has explained, undue hardship is a new criterion introduced into this area of law, and as a result it is necessary, or has, at least, been considered advisable by the hon. Member—once again I support him on this—to introduce appeal provisions.

The general criteria are laid down in Clause 1(1). The items referred to are detailed in Clause 1(2). If there is any argument about whether the removal of certain items could be achieved only at the price of causing undue hardship, in the last resort that is a matter for the court—namely, the sheriff—to decide. I wholeheartedly approve of that proposal.

I understand that this is a problem which has attracted the attention of English lawyers as well. I would briefly refer to the Payne Committee's Report of 1969, Cmnd. 3909. The Payne Committee was considering the whole question of the enforcement of judgment debts in the same way as the Scottish Law Commission is presently considering that whole problem. The issue was put rather neatly at paragraph 675 of the Payne Committee's Report, where this is said: There is, however, one point of exceptional importance and urgency to which we should refer. In relation to the exemption of goods from seizure attention has been brought to the fact that the disruption which sometimes takes place in the family of a debtor when furniture and furnishings are removed and sold under an execution far outweighs any possible advantage that may accrue to the judgment creditor by the removal and sale. I interject here that this is the human problem to which the hon. Member is directing his attention. One must not, however, wholly overlook the legitimate rights of the creditor. One cannot ignore his legitimate rights simply by having regard to the position of the debtor. But it is a fact that when property of this nature is seized in this way and sold, it very rarely attracts a large sum of money, and on balance there is no doubt that the benefit to the creditor can very easily be far outweighed by the hardship resulting to the debtor.

The Payne's Committee's Report continued by making reference to the recommendations in the evidence of the Under-Sheriffs Association, where the under-sheriffs had expressed concern at the hardship that could be caused to debtors' families by the removal of household goods. I conclude this reference to the Payne Committee's Report by quoting the latter part of the paragraph to which I have referred. 'We agree with the under-sheriffs but we go further and recommend that a list of exempted articles should be prescribed, after consultation with social welfare and other interested organisations, and founded upon the general principle that a tradesman should retain such tools of trade and goods as are necessary to enable him to maintain his earnings, and that such household goods and personal clothing should be exempted as are necessary to provide a clean and decent home for the whole family. The paragraph concludes with the words: The implementation of this recommendation is widely regarded as a matter of urgency. As I understand it, that is the position in England and Wales. To some extent the problem is already met by the common law of Scotland, concerning tools of trade. It is interesting to note that the hon. Member has followed the course recommended in the paragraph to which I have referred by spelling out the list of exempted articles which should be prescribed. That is a wholly commendable approach. As I have said, the Scottish Law Commission is looking at this position broadly, but it certainly would not want it to be thought that this relatively minor but none the less significant change should be held up merely because the Law Commission is undertaking a wider investigation. I share that view. I have never subscribed to the view that one should never do anything until one is able to do everything. The proposals set out in the Bill should be commended.

Perhaps I should mention that there are a number of statutes which bite on this problem, and certain consequential amendments to certain of those statutes are called for. These are the statutes referred to in Clause 1.

I doubt whether there is much further that I can usefully add to what has already been said. In seeking to strike a balance between the legitimate interests of the creditor, on the one hand, and the humane considerations for the welfare of the debtor, on the other hand, the Bill strikes a very fair balance. I hope that it will receive the support of the House.

The Bill may require amendment in Committee. I should not have thought that its provisions would call for any material amendment. It may be that the list of items specified in Clause 1(2) will provoke discussion, but I have no doubt that the hon. Member very carefully considered the provisions of Clause 1(2), and, as I have said, it seems that a fair balance is struck here and that a workable solution is proposed.

The Bill is a not insignifiant contribution to the reform of the law of Scotland. I have heard from time to time the view, quite legitimately expressed, that in many aspects the law of Scotland lags behind the law of England when it comes to law reform. There are many reasons for that. The hon. Member for Rutherglen can take credit that in this area at least the law of Scotland appears to be leading English law in this important matter of social reform.

1.0 p.m.

Dr. J. Dickson Mabon (Greenock)

I thank the Lord Advocate for that reply and I congratulate my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) on the way in which he has drafted and introduced the Bill. I asked him a minute ago whether he had ever fathered any other legislation in the nine years that he has represented the Royal Burgh of Rutherglen in the House, and he said that he had not had that good fortune until now.

I have had 17 years in the House and only last year did I manage to get a Bill on to the statute book. I have never won a ballot, and at the rate I am going it does not appear that I ever will. I envy my hon. Friend for having this opportunity.

I have some experience of a number of distressing cases under the present law. I am glad that the Bill is being accepted by the Government and that they will help my hon. Friend when it reaches Committee to put it through quickly. My Bill went through in one sitting, and I strongly recommend that sort of action with the present Bill. I know that my hon. Friend and the right hon. and learned Gentleman will work very well together and that those who are fortunate enough to serve on the Committee will make sure that the proceedings are quick.

The Lord Advocate

With his long experience in the Scottish Standing Committee, the hon. Gentleman will realise that to get any Bill through in one sitting is an achievement; but I fully endorse his sentiments.

Dr. Mabon

The Commiteee I referred to sat once, with the Secretary of State as a member, and we managed to get the Bill through in one morning. I realise that the Secretary of State might not sit on the Committee considering this Bill. I am sorry that the Lord Advocate is not with us in the First Scottish Standing Committee dealing with local government. I am sure that he bitterly regrets not being a member. However, he should be commended for what he said.

I am glad that the right hon. and learned Gentleman is not willing to hold up a good Bill because it is not the best. That is an exceptional attitude among Ministers. We all know that the Law Commission's recommendations will probably go a great deal farther than the Bill proposes. It is commendable that the Lord Advocate is willing to take a first instalment of reform rather than, as Ministers often do, use the expectation of a report as an argument for delaying it and other small reforms. I congratulate my hon. Friend and thank the Minister again.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).