Section 4 — Effect of debt payment programmes

Part of Debt Arrangement and Attachment (Scotland) Bill: Stage 3 – in the Scottish Parliament at 3:45 pm on 13th November 2002.

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Photo of Tommy Sheridan Tommy Sheridan SSP 3:45 pm, 13th November 2002

I am glad that I am not the only one who is getting confused, Presiding Officer.

Amendment 36 would freeze contractual interest from accruing on debts that are being repaid through debt arrangement schemes. The members of the Social Justice Committee will be aware that many organisations that gave evidence to that committee agreed that if contractual interest on debts cannot be frozen during the operation of debt arrangement schemes, many people will never see an end to multiple debt. It is not uncommon for debtors to have real-terms interest rates of 200 per cent. That is the norm for most clients of advice agencies in Scotland, according to Citizens Advice Scotland's 2001 report.

In short, if contractual interest is not frozen, the debt arrangement scheme might be a failure as a policy initiative. The matter is so important that the whole debt arrangement scheme might fall if contractual interest is not frozen. I hope that the minister will take on board that grave warning. I also hope that he has listened to the evidence that the advice agencies gave to the Social Justice Committee. Amendment 36 is serious and important. I hope that members will bear it in mind that if there is no freezing of contractual interest and if the measures on the composition of debts are not passed, there will be serious consequences for the ability of the debt arrangement scheme to help debtors throughout Scotland.

I move amendment 36.