DEDUCTIONS FROM NET EARNINGS TO BE MADE BY EMPLOYER (Hansard, 9 April 1987)

§ Mr. Bruce Millan (Glasgow, Govan)
I beg to move amendment No. 6, in page 37, line 38, after '(1)' insert 'Subject to subsection 6(a) below'.

§ Mr. Deputy Speaker
With this we will take the following amendments: No. 7, in page 38, line 15, after `(2)', insert 'Subject to subsection 6(a) below'.

§ Mr. Millan
These amendments deal with the sliding scale of payments that can be deducted from a debtor's earnings under schedule 2 to the Bill. When I first read the Bill, I was worried about the mechanical nature of the arrangements that are being made. I do not object to that in principle, but I was worried that there is no exception to the arrangements that are laid down in the Bill. I now regret that I did not raise my concern on Second Reading and in Committee. I thought then that I was slightly too worried about the arrangements in the schedule.
Following the Committee Stage, the hon. Members who sat on the Committee received a letter from the Scottish Association of Citizens Advice Bureaux expressing similar concerns about the fact that there is no provision in the Bill for an exception to the sliding scale arrangements. That is the reason why I put down the amendments.
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Of course, we all recognise that the arrangements under the Bill generally are a considerable improvement. No one disputes that. If amounts are to be set down in the legislation, they have to be on a sliding scale because they have to take account of the debtor's income. Nevertheless, the figures in schedule 2 that can be deducted weekly are considerable; similar substantial amounts are calculated 496 on a monthly basis. For someone with weekly earnings exceeding £280 but not exceeding £300, the deduction is £83. That is a very large sum to deduct from anyone's income. Anyone who has a big weekly wage is also likely to have large weekly commitments such as a mortgage payment or rent which it may not be easy to set aside. The figures in the schedule are substantial and take no account of the personal circumstances of the debtor.
The purpose of my amendments is to allow a debtor to make application to the court to have the payments reduced. I would not expect such a provision to he used frequently. If it were, I would not expect the court always to give a favourable response to an application; otherwise, there would be little point in writing a sliding scale into the legislation. Nevertheless, flexibility would be preferable to the provision in the Bill.
It is for that reason that I tabled the amendments. As I said, this part of the Bill has worried me from the beginning. I regret that I did not raise it in Committee but it is better to do it now than not at all. The provisions are causing concern elsewhere among people who are familiar with the working of such arrangements. Therefore, it is well that their concerns should be ventilated.

§ The Solicitor-General for Scotland
I see force in what the right hon. Member for Glasgow, Govan (Mr. Millan) has said but I shall not recommend acceptance of the amendment. After a brief explanation, I hope that he will appreciate that the result he seeks can be achieved by a different route. I should point out to him that the Scottish Law Commission considered whether the courts should have the power to vary deductions in paragraphs 6.7 and 6.8 of its report. It concluded that the courts should not have this power, for reasons of practicality. Many earnings arrestments would subsist for only a few months, so that applications for variations of deductions would have to be disposed of quickly; evaluation of the debtor's means and liabilities, however, which is the basis of any application, could take a considerable time.
Moreover, if debtors became aware of the court's powers, there was anxiety that there might be a flood of applications. Clearly, the right hon. Gentleman was aware that that would be an undesirable development. Accordingly, the advantage of simplicity and ease of operation of earnings arrestment would be lost.
From the discussion in Committee, I think we all appreciated that for arrestment of earnings to work satisfactorily it was desirable that the minimum burden should be imposed on the employer, not least because of the difficulties it can cause between employee and employer if the arrangement is too elaborate or clumsy.
What I hope the right hon. Gentleman will appreciate, if he has not done so already. is that if an arrangement is made for earnings arrestment and the debtor finds himself in difficulty in making a payment according to the schedule set out in the Bill, there is an opportunity elsewhere in the Bill for him to apply to the court for a time-to-pay order, proposing a lower rate of payment and a recall of the earnings arrestment. I suggest to the right hon. Gentleman that that will meet his objective. If a debtor found that he could not make a payment, he could make application in this way. If he had a good case, the earnings arrestment would be suspended and a lower rate of payment by instalment rather than by earnings arrestment could be achieved.
497 If we are to move away from the statutory schedule of what should be deducted, the advantage of using the time-to-pay order is that the employer would not be asked to apply a different figure and would not have to instruct his or her bookkeeper to make a further deduction. That is a simple and effective way to deal with the matter. I hope I have satisfied the right hon. Gentleman that we take his point, but that it is appropriately dealt with in the Bill.

§ Mr. Millan
I am grateful for the explanation. I had not realised on reading the Bill that once the process was in operation it would still be open to the debtor to apply to the court for a different arrangement. Whether in practice there would be time for that to be done successfully before the whole debt had been recovered must be doubtful in most cases, but I am satisfied with the explanation given, that there is a mechanism available which I had not understood before. In those circumstances, I beg to ask leave to withdraw the amendment.