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 Robert Brown Robert Brown Liberal Democrat 3:45 pm, 13th November 2002

Amendment 45 relates to a not dissimilar issue, which is that of freezing interest and the composition of debt. That issue was referred to during the Social Justice Committee's deliberations and most members of the committee had considerable sympathy with it. We touched earlier on the background to amendment 45, in the debate on Lyndsay McIntosh's amendment 25. Many debtors who receive advice have debts that amount to many thousands of pounds, which they are unlikely to pay in full over any reasonable period.

That situation has a number of effects. The first is that the creditor will not recover their money. The second is that the debtor becomes demoralised, which means that the repayment of even part of the debt is unlikely unless there is a degree of incentive or encouragement to keep up the payments, which might be significant for those who have relatively small incomes. There are many examples—which are not imaginary—of debts that would take 27 years or some such period to repay. In such situations, repayment in full is not likely because people become discouraged and do not carry on their repayments.

In the discussions at stage 2, the deputy minister was sympathetic to the Social Justice Committee's suggestions, but, in opposition, he said that they might overlap with Westminster legislation because of the commercial element. One can understand that. Another question was whether our suggestions overlapped with the European convention on human rights—in particular, the first protocol to the convention. It might be helpful to read from the first article of that protocol, which states:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest".

We are talking about creditors' rights. In common with a number of human rights provisions, that one is not absolute or black and white. Conditions and exceptions are involved and alternative arrangements are possible. For example, in bankruptcy law, creditors receive payment of a dividend—20 per cent, 50 per cent or whatever—in exchange for the full writing-off of the remaining debts.

The principle exists and I accept entirely that it is a complex area in which there is overlap with the Scotland Act 1998, the ECHR provisions, the Human Rights Act 1998 and so on. However, I ask the minister—I hope that I will receive a positive response—to undertake to consider the issue in more detail in the light of the civil diligence review and to return to Parliament on the matter in due course, rather than rule out the possibility of instituting this arrangement at the present time.

I accept Tommy Sheridan's proposition in introducing the matter, that if the arrangements for the composition of debts and the freezing of interest are not included in the arrangements, that will to some extent undermine the intention of the Executive and the Parliament that there should be success in those areas.