Meeting of the Parliament 06 February 2024
I am grateful for the opportunity to address the chamber on the general principles of the Bankruptcy and Diligence (Scotland) Bill. The bill is not a big one and is not a radical reform, which reflects the fact that our bankruptcy system in Scotland is widely perceived to be meeting our needs. However, the bill represents a chance to make things better for a small number of individuals with both severe debt problems and severe mental health issues.
The links between debt and poor mental health are well known and were clearly set out by many of the expert witnesses who gave evidence to the Economy and Fair Work Committee. I thank that committee for its scrutiny of the bill. I also thank the Delegated Powers and Law Reform Committee and the Finance and Public Administration Committee for their input, as well as all those who gave evidence at stage 1.
The proposals that are in the bill come from stakeholder-led groups that looked at each of the statutory debt solutions to determine what improvements could be made. The proposals, which have been subject to extensive public consultation, reflect the stakeholder recommendations that have achieved a level of consensus and where the change requires primary legislation.
The stakeholders involved each represent their areas of interest and therefore have different perspectives. Creditors, advisers representing those who are struggling with debt, trustees and sheriff officers are among those who have worked together to make improvements to our debt solutions and diligence arrangements. I pay tribute to the work of all stakeholders whose recommendations are being brought forward and enabled by the bill.
The bill will create the enabling power for a mental health moratorium to help to improve the lives of people who are struggling with debt and serious mental health issues. The mental health moratorium meets a recommendation in the Social Justice and Social Security Committee’s report “Robbing Peter to pay Paul: Low income and the debt trap”, which was the report on the committee’s inquiry into low income and problem debt.
The bill is intended to enable specific proposals for the moratorium, based on the advice of the mental health moratorium working group.