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This is the area of the bill that people would agree is the most contentious, and on which the most commentary has been made and in which wider interest exists.

I recognise the concerns and I take them very seriously. As I said earlier, I met Citizens Advice Scotland and other stakeholders in the money and debt advice sector this past week to hear their concerns directly. They made many similar points to those that the committee heard in oral and written evidence. I am conscious of the broader concerns that have been narrated that the legislation could create an environment that is favourable to high-cost predatory lenders. It is difficult to specify the form that that environment might take, but the concern is based on those organisations’ professional experience and institutional knowledge. I want to be clear that I take that concern seriously. We all agree that we absolutely do not want to see emerge, as an unintended consequence of the bill, the creation of an opportunity for those who have been described as high-cost predatory lenders.

As Mr Mundell suggested, one option is the removal of what has been defined as the application to consumers, although the bill does not make specific reference to consumers but, rather, to individuals. There is a particular point about clarifying certain protections in relation to the statutory pledge, too. I am content to consider those options. I appreciate that I have made this point a few times, but I stress that I am keen to see, and will be informed by, the conclusions of the committee’s deliberations.

It is important to recognise that, if we were to seek to effect that aspirational removal of individuals or “consumers” from the bill, there would have to be careful consideration of how that could be done in the drafting.

There is also a specific issue, which the FSB raised, with regard to individuals and sole traders, particularly on access to finance. There would need to be careful consideration of that.

I am conscious that, as we seek to prevent potential risks, we must not generate unintended consequences that would limit the impact and policy objective of the bill, which is about opening up financing opportunities to businesses of all sizes, particularly those that want to grow but that do not have any heritable property and that would rely on using moveable property as collateral.

On the option that you articulated, in which individuals would still be able to make use of the statutory pledge but there would be certain additional protections, we would certainly look at increasing the monetary threshold if that is where we land. I recognise that £1,000 has been described as a placeholder figure; it dates to 2017 and the amount should be increased. If the committee has any particular views on what the amount should be, I would be keen to hear them. If that is the scenario that ultimately prevails, we must set an amount that precludes the possibility of household goods being used as collateral for a statutory pledge.

I take the point that you seek reassurance by having something put in the bill. However, I am sure that you would agree that the additional provision of regulation-making powers is important to keep pace with any developments that we might not have anticipated. That is another scenario.

I am conscious of the written evidence that the committee has received in recent days, including from Professor Steven. We need to carefully consider how the bill interacts with existing consumer protection regulation—the Consumer Credit Act 1974 being one example. We are absolutely clear on what the potential risks are, and we recognise that there are protections that sit in other legislation or regulatory regimes that operate in wider legal structures, although that might not be explicit in the bill.

Do you want to add anything, Hamish?

Good morning. It is a pleasure to be in front of the committee. I have many fond memories of being a member of this committee, and I can only hope that I am still saying that it is a pleasure to appear before it when we get to the end of the evidence session.

The committee will be aware that there is significant support for reform and modernisation of Scottish moveable transactions law among those who use it, since it is out of date and inadequate by international standards. If implemented, the bill would make various types of commercial transactions more efficient, less expensive and less complicated than they currently are.

Moveable transactions law enables businesses and individuals to use their assets to raise finance by selling debts or by granting security over moveable property. For example, a business may wish to acquire funding by transferring to a financial institution its claim to payment of existing and future customer invoices. That would be done by means of an assignation. Alternatively, it might want to retain assets such as vehicles, equipment and intellectual property, but to use those as collateral to obtain loan finance. That would be done by means of the new statutory pledge. That would lead to greater access to finance for businesses in Scotland, thus benefiting the general economy.

I am aware that the committee has heard evidence from Citizens Advice Scotland and money advice agencies, and that they have suggested that the bill should apply only to businesses and not to individual consumers. They have also suggested that, if the bill is to apply to individual consumers, the consumer protections in the bill should be strengthened.

When the Economy, Energy and Fair Work Committee took evidence on the proposals in the previous session of Parliament, the vast majority of respondents indicated that they thought that the consumer protections in the bill were perfectly adequate, and I understand that many respondents to the committee have repeated that view.

However, last week, I met Citizens Advice Scotland and some of the debt advice agencies and listened carefully to what they had to say about the application of the bill to consumers. I am certainly well disposed to strengthening the consumer protections in the bill and, in particular, I believe that the monetary threshold under which it will not be possible to grant a statutory pledge should be raised from £1,000.

I am also in no doubt that the policy of the Government should be that it should not be possible to grant a statutory pledge over ordinary household goods. We can look to see how the bill might be amended at stage 2 to ensure that that is not possible.

On that note, I will conclude. I am happy to take any questions that the committee might have.

The rules will be set out through regulations. I am interested to see what views the committee comes to in its stage 1 report. There will be consultation and engagement on the rules. It is clear that there is a lot of detail still to come on the operation of the registers, but we want the system to be as user friendly as possible and to command confidence at the same time as being robust. Hamish Goodall might want to add something on that.

I am conscious of the concerns that have been raised by consumer advice and money advice stakeholders. I have studied carefully the evidence that was given to the committee at the start of October, and, as I said, I had a meeting with organisations that work in that area last week. I want to reflect carefully on those concerns, and I recognise that the committee will want to touch on other areas around the statutory pledge.

I also want to be clear at the outset that I will consider very carefully the committee’s stage 1 report, because I recognise that you have had to contend with evidence that, in some contexts, may be conflicting or may come from different perspectives. That includes some of the written evidence that you have received in recent days. I will want to fully reflect on that matter.

With regard to assignation in the context of consumer credit, Hamish may have up-to-date information.

I will not be in a position to provide early sight of the regulations. We must recognise that it is a live bill and it will be for Parliament to determine its final shape, should Parliament be content to pass it. However, we will, of course, consult on the rule making for both of the registers and, given that it would be an exercise of delegated powers, I am happy to keep the committee informed as the consultation and engagement process develops.

That speaks to the point about the principal actors who are going to utilise the bill and what their interests will be. Hamish Goodall expanded on the issue in some detail. Fundamentally, it will be in their interests for the approach to be self-regulating. However, as I have said, we have adopted a proportionate approach in which there is the flexibility to intervene if that is required at a later date.

Yes. That is what I alluded to in my response to Mr Kidd. I recognise that that point has been raised in evidence to the committee. I come back to the point that the option would have to be considered in terms of affordability and cost, but, as I have said, I am happy to consider it and am keen to see the conclusions that the committee draws.

I would be happy to reflect on that. As you highlighted in your question, there are two approaches: either we develop an automatic mechanism or we have periodic uprating that would be effected by statutory instrument. However, with regard to an automatic instrument there would be a wider range of considerations on matters such as its design and its reference to other statistics—for example, the RPI, which you mentioned. I would be happy to consider the matter in general and to come back to the committee on it in my response to its stage 1 report.

I am giving active consideration to that, at the moment. I cannot yet offer you a model of what such a balance would look like—it is the subject of live discussion. I take your point about early start-ups, sole traders and microbusinesses, where the lines between individual use and business use of property can be vague and hard to define. From reflection on my own professional background in music before I entered politics—I am sure that the convener will empathise with this example—it is clear to me that a musical instrument can be for both personal and professional use. I am not saying that that is the best example. However, it is an area for consideration, particularly in respect of people who are establishing themselves in business. Reference was made to a vehicle that could be for both personal and business use. It can be hard to distinguish between the two.

I recognise the points that have been made by the FSB. We would not want there to be an unintended consequence whereby, in seeking to afford consumers greater protection, we disapplied the bill’s provisions to businesses—especially start-ups with a high concentration of moveables that they cannot use as collateral. We want to avoid that. That needs to be given careful consideration, so we are actively doing that.

Hamish Goodall might want to add to that, or Vuyi Stutley might want to come in with her reflections on those points.