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I recognise that organisations that represent stakeholders have a primary responsibility to advocate for their stakeholders but, in setting budgets, we in Parliament and the Government have a responsibility to look at matters in the round. Although there is a clear policy intent of supporting first-time buyers, there is also a policy intent of generating revenue. We all recognise the significant challenges that public finances face currently and going forward.

I recognise that it is entirely right for organisations that represent particular sectors and groups to advocate on their behalf, but the Government has to consider things in the round and how policies will impact on all sectors and people in Scotland.

With regard to any proposals for future changes, we have been undertaking a significant review of the ADS. We will always keep our policies on tax, and more general policies, under review. I am happy to hear suggestions about any changes that should be made. I ask that those proposals be made in a way that is consistent with our framework for tax.

Ultimately, the SFC has set out its position. The changes that we have made will lead to a net increase of £34 million, once behavioural change is factored in. More broadly, looking at the revenues forecast for the coming years, a number of factors are at play—most obviously, prevailing economic conditions, as we enter an economic slowdown. We have also seen an increase in interest rates, which will naturally impact on demand for properties and, consequently, on the number of transactions that affect forecast revenue. Over the five-year horizon in the SFC’s forecast, we see revenues picking up.

The policy intent is to allow first-time buyers to compete more effectively. It is axiomatic that a home mover or a first-time buyer will not be subject to the ADS, whereas an investor or someone buying a second home, a holiday home or a buy to let property will be subject to the ADS. In terms of the tax liability, it allows for first-time buyers and home movers to compete more fairly, and it increases parity within the system. That is the policy intent.

It will be relatively soon. I think that we are in the realm of weeks rather than months.

I note that, for any home mover who is not subject to the ADS, the nil threshold goes to £145,000. For a first-time buyer, it is up to £175,000. That is where the benefit is conferred.

For clarity, I point out that the rate of the ADS is now 6 per cent. Because of the provisional affirmative procedure, it was effective at 6 per cent from 16 December.

I add that the ADS does not apply to properties below £40,000. I also advise that there is an excellent suite of LBTT calculators on the Revenue Scotland website.

Good morning, convener and committee members. Thank you for taking the time to consider these draft regulations.

It is very important for us—and for portfolios across the Government—to consider policies in the context of the current extreme cost of living pressures. We want to act quickly where we can make a difference. There are four areas of particular focus in the regulations.

The first area is debt arrangement scheme payment breaks. Through the debt arrangement scheme, in the region of 16,000 individuals have taken control of their debt and maintain a debt payment plan. For at least some of those people, the increases in the cost of living will pose a threat to the sustainability of those plans. We want to ensure that the arrangements for securing a payment break are sufficiently flexible, bearing in mind the current volatility in living costs. The provisions in the regulations would allow for a break of up to six months where those wider pressures on household income apply. I consider that to be an important change that will help those payment programmes to succeed.

The next two issues relate to access to bankruptcy. Stakeholders working with us on a policy review have recommended the removal of the minimum debt level for minimal asset process bankruptcy, which is currently set at £1,500. The recent report of the Social Justice and Social Security Committee, following its inquiry into low income and debt, also made that recommendation. I understand the concern that the current threshold might prevent individuals from accessing debt relief that they desperately need. The regulations remove that minimum debt level.

We have made significant progress in reducing or removing the fees that are associated with self-nominated bankruptcy. The Social Justice and Social Security Committee has recommended further tweaking of the fee waiver criteria to encompass all the people who have been assessed as being unable to pay a contribution through the common financial tool. I am happy to take that forward, which will provide further benefit to the most financially vulnerable.

There is a further change that I consider necessary, which is linked to the entirely appropriate actions that have been taken on fee reduction. Wider pressures on the public purse mean that we need to look at all the options in the current system that can help it to recover costs and remove burdens on public finance. The regulations would increase the deposit that creditors must provide when the Accountant in Bankruptcy is nominated as trustee following court bankruptcy.

The need for that is twofold. First, there is the reduction in fee income, which I highlighted. Secondly, there is the fact that the administration of court petition bankruptcy when no funds can be collected comes at the significant cost to the public purse of almost £2,000 per case, on average. The initial deposit that is paid by creditors is repaid when a bankruptcy generates funds. When no funds are produced, it seems reasonable that the creditor bringing the action should bear more of the cost.

I will conclude there. I hope that the committee will agree to a motion to recommend approval of the regulations, and that it agrees that they are a sensible measure at this time.

The committee will be aware more broadly of statutory debt solutions such as providing individuals with the debt advice and information pack, but I will ask Alex Reid to come in on Mr Beattie’s specific points.

I refer the convener to the detail that is provided in the business and regulatory impact assessment, but, broadly, in the past three years that the AIB has been the trustee, around 56 per cent of bankruptcies have resulted in no fees being recovered to cover administration costs. The measures that we are taking are proportionate. I note that the increase from £300 to £750 stands in contrast to the situation in England and Wales, where the fee has moved from £990 to £1,500.

That is a proportionate response and, as set out in the BRIA, it will have an impact. It will not lead to full cost recovery, but it will make a significant contribution, which we would all recognise is important given the challenging public finance landscape that we face.