Meeting of the Parliament 27 June 2018
We welcome the bill. The new discoverability test, which requires a person to be aware that their loss, injury or damage was caused by a person’s act or omission and to know that person’s identity before the five-year period starts, is fairer than the current law.
The bill seeks to simplify prescription and ensure—with few exceptions—that all debts that arise from personal contracts or statute are covered by the five-year rule, but it is disappointing that the Government has been persuaded to exempt certain statutory creditors. The exemption from five-year prescription of council tax and benefit payments under United Kingdom legislation, which makes them subject to the 20-year prescription, will leave people vulnerable to high penalties many years after they were incurred, even when those people might not have been aware of them. Given the six-year prescription that covers council tax debt and benefit overpayments in England and Wales, the bill fails to provide simplicity, fairness and clarity, particularly for those who will access devolved and reserved benefits.
When I tried to intervene on the Solicitor General, I did not want to catch her out in unfamiliar surroundings; I genuinely wanted to seek clarity about the debt that will be transferred from the UK Government to the Scottish Government. The devolution of social security powers to the Parliament means that the debt that is associated with historical claims will also be transferred. Maybe the Solicitor General will cover, in concluding, what system will apply to the debt that is transferred from the UK Government to the Scottish Government if the bill is passed.
Mike Holmyard from Citizens Advice Scotland told the Delegated Powers and Law Reform Committee that the position was unfair, and he gave examples of problems with obtaining adequate evidence from debtors and local authority collection systems. He explained that the way in which council tax is collected exacerbates the difficulties that debtors have in understanding their council tax debt. CAS advisers see clients who have built up debts over 10, 11 or 12 years because their council does not appear to have taken any action to collect those debts. The clients do not understand how a council can go from making no effort to collect payments over a long period to taking drastic action to recover the debts. Similar issues arise in relation to benefit overpayments under UK legislation.
A divergence between devolved benefits and reserved benefits would result from how section 3 of the bill interacts with section 66 of the Social Security (Scotland) Act 2018. The combined effect of the two provisions is that five-year prescription would apply to devolved social security benefits but 20-year prescription would apply to reserved social security benefits.
We welcome the bill, but we will look again at some areas of it at stage 2.
16:03