Chamber
Plenary, 01 Mar 2007
01 Mar 2007 · S2 · Plenary
Item of business
Illegal Moneylenders
The minister said that the debate is about loan sharks—illegal moneylenders who do not have a licence to lend money. However, does he believe that it is okay for so-called legal moneylenders—credit companies and banks—to charge extortionate interest rates for credit, mortgages and so on? Surely, by his own admission, those moneylenders must also be considered.
Many forms of loan shark have been mentioned. In that context, I want to talk about my personal, first-hand experience from when I worked in various areas in Glasgow and Paisley. I want members to know how moneylenders operate. When I worked in the east end of Glasgow, there was a shop—which I will not name—that kept family allowance books in a drawer. Therefore, families or mothers had to use that shop. The prices were extortionate, but it was the only shop that they could use. That was one form of moneylending. Obviously, there were terrible consequences for the families that were involved and for the community at large.
In Paisley, long queues of moneylenders would wait outside post offices to take money or benefits from people collecting their money or benefits. The police were eventually called.
Those are two examples from my first-hand experience of illegal moneylenders or loan sharks, but such things still happen today. Money is taken from people not only on street corners, but in front of shops and post offices, and families are left destitute. They have no money left for clothes, food or anything else. I welcome the figures that the minister gave in reply to the question that Stewart Stevenson asked, but such things still happen, and it is a terrible indictment of today's society that we must put up with such moneylending.
Credit unions, citizens advice bureaux, Money Advice Scotland and other organisations have been mentioned. I agree that those organisations do an invaluable job and I welcome the loan-shark hunters—I think that that is what they are called—because we need to protect people from illegal moneylending, which can have terrible consequences for them.
I turn to the Scottish National Party's amendment. Kenny MacAskill was right about the effects of the Bankruptcy and Diligence etc (Scotland) Act 2007. People's houses can be taken off them as a result of debts of as little as £3,000. Sometimes the debt will not even be of their own making. I will give an example. Hundreds of people are being taken to court for debts of between £3,000 and £7,000 relating to bills for repairs to their houses. I am sure that the minister knows what I am going to say next. Those people did not ask for the repairs to be done, they did not want them to be done and they could not afford them. However, the Glasgow Housing Association, which the Labour Government set up, is taking them to court.
The GHA is a predatory company. It insists that people pay for things within a year and says that, as it is a charitable institution, it cannot afford to extend payment periods. Even Communities Scotland has said that that is not the case. Will the minister, in summing up or in an intervention, confirm to people who are suffering under the GHA that that is not the case? The GHA is taking people to court to pay back money within a year, which may lead to bankruptcies. People could lose their homes under legislation that the Labour Government passed.
The minister cited Lloyds Bank as an example of a good creditor. However, the funny thing is that that is the very bank that the GHA advises people to go to for the £5,000, £6,000 or £7,000 loan that they need to pay back the GHA because it has refused to extend payment periods. I am not one for conspiracy theories, but I certainly want the minister to clarify that point.
We must deal not only with illegal but with legal moneylenders. By that, I mean not just banks and credit companies but what I would call the Executive's own illegal moneylenders, such as the Glasgow Housing Association, which is putting people into debt.
Many forms of loan shark have been mentioned. In that context, I want to talk about my personal, first-hand experience from when I worked in various areas in Glasgow and Paisley. I want members to know how moneylenders operate. When I worked in the east end of Glasgow, there was a shop—which I will not name—that kept family allowance books in a drawer. Therefore, families or mothers had to use that shop. The prices were extortionate, but it was the only shop that they could use. That was one form of moneylending. Obviously, there were terrible consequences for the families that were involved and for the community at large.
In Paisley, long queues of moneylenders would wait outside post offices to take money or benefits from people collecting their money or benefits. The police were eventually called.
Those are two examples from my first-hand experience of illegal moneylenders or loan sharks, but such things still happen today. Money is taken from people not only on street corners, but in front of shops and post offices, and families are left destitute. They have no money left for clothes, food or anything else. I welcome the figures that the minister gave in reply to the question that Stewart Stevenson asked, but such things still happen, and it is a terrible indictment of today's society that we must put up with such moneylending.
Credit unions, citizens advice bureaux, Money Advice Scotland and other organisations have been mentioned. I agree that those organisations do an invaluable job and I welcome the loan-shark hunters—I think that that is what they are called—because we need to protect people from illegal moneylending, which can have terrible consequences for them.
I turn to the Scottish National Party's amendment. Kenny MacAskill was right about the effects of the Bankruptcy and Diligence etc (Scotland) Act 2007. People's houses can be taken off them as a result of debts of as little as £3,000. Sometimes the debt will not even be of their own making. I will give an example. Hundreds of people are being taken to court for debts of between £3,000 and £7,000 relating to bills for repairs to their houses. I am sure that the minister knows what I am going to say next. Those people did not ask for the repairs to be done, they did not want them to be done and they could not afford them. However, the Glasgow Housing Association, which the Labour Government set up, is taking them to court.
The GHA is a predatory company. It insists that people pay for things within a year and says that, as it is a charitable institution, it cannot afford to extend payment periods. Even Communities Scotland has said that that is not the case. Will the minister, in summing up or in an intervention, confirm to people who are suffering under the GHA that that is not the case? The GHA is taking people to court to pay back money within a year, which may lead to bankruptcies. People could lose their homes under legislation that the Labour Government passed.
The minister cited Lloyds Bank as an example of a good creditor. However, the funny thing is that that is the very bank that the GHA advises people to go to for the £5,000, £6,000 or £7,000 loan that they need to pay back the GHA because it has refused to extend payment periods. I am not one for conspiracy theories, but I certainly want the minister to clarify that point.
We must deal not only with illegal but with legal moneylenders. By that, I mean not just banks and credit companies but what I would call the Executive's own illegal moneylenders, such as the Glasgow Housing Association, which is putting people into debt.
In the same item of business
The Presiding Officer (Mr George Reid):
NPA
Good morning. The first item of business is a debate on motion S2M-5669, in the name of Des McNulty, on dealing with illegal moneylenders.
The Deputy Minister for Communities (Des McNulty):
Lab
We are here this morning to discuss the problem of loan sharks. By "loan sharks" I mean those who break the law by lending money, often at extortionate inter...
Stewart Stevenson (Banff and Buchan) (SNP):
SNP
I join the minister in unreservedly condemning the actions of illegal moneylenders. How successful have we been, under the Proceeds of Crime Act 2002 or othe...
Des McNulty:
Lab
I can give the member some figures in relation to the activities of the Glasgow illegal moneylending team. To date, 500 people have benefited from the prosec...
Christine Grahame (South of Scotland) (SNP):
SNP
Now there is an admission.
Des McNulty:
Lab
I hope that the SNP will support us in opposition. We will invite our partners, such as Citizens Advice Scotland, Money Advice Scotland and local authorities...
Mr Kenny MacAskill (Lothians) (SNP):
SNP
In moving the amendment in my name, I say that we do not disagree with anything that the minister said. Clearly, the Executive is flagging up an issue that h...
Margaret Mitchell (Central Scotland) (Con):
Con
I very much welcome this important debate, which focuses on what has become a huge problem throughout the UK—namely, consumer debt and the activities of ille...
Mr Jamie Stone (Caithness, Sutherland and Easter Ross) (LD):
LD
The debate is a worthwhile one. I am indebted to the Rev Graham Blount for all his work on the issue. He is known to all of us, and is the secretary of the c...
Bill Aitken (Glasgow) (Con):
Con
Is Mr Stone aware that much of the collection, intimidation and threatening behaviour that illegal moneylenders carry out is done on the streets and street c...
Mr Stone:
LD
I take that point, but my point is that those activities are not overt, but covert. The police work that is involved has to be much more detailed and clever ...
Christine Grahame:
SNP
From the member's comments, it seems that he supports the statement in the SNP amendment about the burden that legal moneylending puts on people. Is that the...
Mr Stone:
LD
I am attracted to the SNP amendment, but the trouble is that I do not support separation, as I have said elsewhere. The motion and both amendments have merit...
Trish Godman (West Renfrewshire) (Lab):
Lab
Some time ago—in 2002, I think—I was fortunate enough to secure a members' business debate on loan sharks. The Daily Record was running a campaign to expose ...
Ms Sandra White (Glasgow) (SNP):
SNP
The minister said that the debate is about loan sharks—illegal moneylenders who do not have a licence to lend money. However, does he believe that it is okay...
Members:
Oh, come on!
Ms White:
SNP
Members can intervene if they wish.
Cathie Craigie (Cumbernauld and Kilsyth) (Lab):
Lab
If we take the member's argument to its logical conclusion, is the SNP saying that it would make tenants pay for repairs to owner-occupiers' houses? Does she...
Ms White:
SNP
Owner-occupiers are quite happy to pay for repairs to their homes, but they simply cannot afford to pay £7,000 within a year. I want the minister to clarify ...
Patrick Harvie (Glasgow) (Green):
Green
I welcome the opportunity to debate this issue. However, I struggled to find any information about issues such as credit unions and the debt arrangement sche...
Christine May (Central Fife) (Lab):
Lab
Members have made some very good speeches on an issue that we are all concerned about, even if we have slightly different views on how to solve it.Unlike Pat...
Colin Fox (Lothians) (SSP):
SSP
I wonder whether the minister is familiar with the lines that Woody Guthrie sang:"Some will rob you with a six-gunAnd some with a fountain pen."In the motion...
Mr Stone:
LD
I mentioned it.
Colin Fox:
SSP
Mr Stone also mentioned it, but he underplayed it, too. I will tell members why.Today, the Royal Bank of Scotland declared profits of £9.7 billion and, yeste...
Helen Eadie (Dunfermline East) (Lab):
Lab
I join the minister in condemning illegal moneylenders unreservedly. He was right to say that there are many threads in the strategy to tackle the issue. The...
Bill Aitken (Glasgow) (Con):
Con
Despite there being two amendments to the Executive's motion, the debate so far has been largely consensual. The Conservatives acknowledge the efforts that t...
Christine Grahame:
SNP
I am interested to know how we can interfere with interest rates when we do not have the powers to do so in this Parliament. Is Mr Aitken suggesting that we ...
Bill Aitken:
Con
No—that is not what I am suggesting. I was careful in what I said so that no one would think that I was suggesting that. I was simply pointing out arguments ...
Colin Fox:
SSP
Perhaps Bill Aitken will unravel the great 21st century mystery of how the banks make their money. They lend at one rate and borrow at another. Is not that w...
Bill Aitken:
Con
That was a rather simplistic argument. On the basis of the equation that Colin Fox advances, the money that the banks make has not been made, to any great ex...