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Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016

Volume 774: debated on Tuesday 18 October 2016

Motion to Consider

Moved by

That the Grand Committee do consider the Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016

My Lords, to summarise, the Bankruptcy (Scotland) Act 2016 consolidates bankruptcy legislation in Scotland. The Act received Royal Assent on 28 April 2016, having been passed by the Scottish Parliament. The purpose of the 2016 Act is to consolidate Scottish laws on insolvency and make bankruptcy policy more accessible, both for the money advice community and those experiencing financial difficulties. As with the order we have just discussed, if passed, this order would amend UK legislation as a consequence of the Act. The order is made under Section 104 of the Scotland Act 1998, which allows for “necessary or expedient” changes to UK legislation in consequence of an Act of the Scottish Parliament.

The Bankruptcy (Scotland) Act 1985 has been heavily amended over the years and new primary legislation has been introduced, most recently in the form of the Bankruptcy and Debt Advice (Scotland) Act 2014. Bankruptcy legislation in Scotland has been widely considered to be confusing and difficult to follow, and the need to consolidate the law has been identified. Drafting of the Bankruptcy Consolidation Bill was led by the Scottish Law Commission, which, alongside officials from the Accountant in Bankruptcy, Scotland’s insolvency service, undertook a consultation in 2011 on consolidating bankruptcy legislation before the Lord Advocate brought forward proposals for a Bill. This Scottish primary consolidation legislation therefore brings together and restates all of the Scottish bankruptcy legislation, including the elements from the 2014 Act—a move supported by the money advice and insolvency industry, as reflected in evidence to the Scottish Parliament when it passed the 2016 Act earlier this year.

Some of the provisions that the legislation consolidated must be restated in both Scots law and UK law. For example, Articles 4 and 6 of the order restate provisions on the effect of discharge from debts and on limitation of actions outside Scotland as a result of Scottish bankruptcies. Article 3 restates the current arrangements for examination, in certain Scottish bankruptcy proceedings, of persons residing in parts of the UK other than Scotland. Schedule 1 updates cross-references in statutes across the UK—for instance, to replace references to “the 1985 Act” with references to “the 2016 Act”. Lastly, Article 5 restates minor procedural provisions about powers of the Secretary of State.

The UK and Scottish Governments, Ministers and officials have worked closely together to ensure that this order makes the necessary amendments to UK legislation in consequence of the 2016 Act of the Scottish Parliament. I hope that noble Lords agree that this order is also an appropriate use of the powers in the Scotland Act and a further example of the UK Government’s commitment to work with the Scottish Government to make the devolution settlement work. I commend the order to the Committee. I beg to move.

My Lords, again I thank the Minister for the exposition of quite a complicated order. Although no formal consultation by the Government has taken place on the order, the Scottish Law Commission consulted fully both on the draft Bill and an accompanying order under Section 104 of the 1998 Act. These are available online. The Scottish Parliament stated in guidance notes on a draft of the order provided for information with the Bill that became the 2016 Act—the consolidation Bill:

“This instrument has no impact of a regulatory nature on the private sector or civil society organisations”.

It said that no significant imposition or reduction of costs was foreseen, that there was no impact on the public sector, and the legislation would not have any significant impact on activities undertaken by small businesses. The effect of the order is purely consequential; it,

“does not create new policy or frameworks and therefore no monitoring or review of the effects of this Order are required”.

It is quite simple. It is a necessary matter, and has the support of the Opposition.

I am very grateful to the noble Lord for his support. As he has laid out, this order is fundamentally of a technical nature, consolidating legislation rather than making any changes to policy or the devolution settlement. I therefore commend the order to the Committee.

Motion agreed.