Hansard

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 Patrick Harvie, I managed to find information on the subject quite easily on the internet. In the UK, the total value of advances made by illegal moneylenders has been estimated at £40 million per annum, whereas repayments to those lenders are of the order of £120 million per annum. I am sure that, like me, many members watched "Dragons' Den" last night. If so, they would have seen the dragons decline to invest on the ground that they would not get a decent return on their investment from what was on offer. The dragons would kill for a return like that. I use the word "kill" deliberately, given that that is what many illegal moneylenders do to their clients—if not in actuality, then virtually.

We can only guess at the effect of borrowing from illegal moneylenders. In my efforts to find out the scale of the problem in my constituency, I discovered the difficulty of doing so. The activities are performed illegally and under cover, in back closes and wherever else. They are about terrifying people and taking control, a lack of clarity and therefore uncertainty. Illegal moneylenders offer something to people who are in desperate straits and then intimidate them for the repayment of the loan.

During the passage of the Bankruptcy and Diligence etc (Scotland) Bill, we heard evidence from the citizens advice bureaux and Money Advice Scotland, and from money advisers in my constituency. We heard horror stories about the tactics that are employed by legal money lenders—the banks, the Provi and other such lenders, as members have described in the debate. The witnesses talked about people getting calls on their mobile phones at 3, 4 and 5 o'clock in the morning. They also spoke of the intimidation of families in which the debtor was in hospital for an operation—the lender would call family members and say, "We don't believe you. Get him to the phone now or we are coming round."

I heard evidence that illegal moneylenders' enforcement tactics can include furniture being tossed over balconies and set on fire—even, on one instance, an individual being tossed over a balcony. I heard of broken limbs and people driven almost to suicide. Debtors' children can be threatened on the way home from school and, even with all the security measures that are in place, benefit books are still being taken and kept. Whether or not we control the credit end and can deal only with enforcement, we must be concerned about that. Indeed, the minister said that he was working with Westminster colleagues to deal with some of those issues.

The Executive has sought to put solutions in place. For example, there are the changes to the way in which debt is dealt with, particularly for the no-income-no-asset group, with the passing of the Bankruptcy and Diligence etc (Scotland) Act 2007. There are also the improvements to the debt arrangement scheme, with the freezing of debt at the point at which the DAS is made, access to advice and help, and representation in court by money advisers. I am aware that some colleagues have difficulty with the land attachment element of the act. However, the minister not only gave guarantees on the way in which the provision would be used, but made a commitment to review implementation, including a promise to come back to the chamber.

Jackie Baillie and I did a considerable amount of work, together with the minister, on credit unions. I congratulate Johann Lamont on her work as Deputy Minister for Communities in that regard. Johann Lamont, who is a fellow member of the Scottish Co-operative Party, introduced expanded powers for credit unions in order that they could more easily offer loans to members, including loans with a shorter savings time. Credit unions now have the ability to expand their activities in areas of deprivation. For example, after 18 months, my credit union—the Glenrothes and Levenmouth Credit Union—has some 2,000 members and the number is still growing every week.

Much has been done. I agree with Trish Godman and Patrick Harvie that a cap on interest rates would go a considerable way to preventing people from falling into the hands of illegal moneylenders. However, such a cap would not help everybody; those who find themselves needing to go to illegal moneylenders often tend to be the sort of individuals to whom we would not lend money, easily or readily, because of their inability to repay. It is essential that we deal with poverty and its causes, and deprivation in terms of jobs and educational attainment. That is the wider policy framework within which the Executive and the Government at Westminster are working. That is what we need to support.

From the briefings that I have received and from reading the DTI report, I note the evidence from the pilots that suggests that a time lag will emerge between getting rid of the illegal moneylenders and introducing alternatives. In the minister's summing up, I ask her to discuss some of the areas in which the Executive hopes to shorten that gap. Any gap in the availability of credit is likely to let in the next criminal.

I have pleasure in supporting the Executive motion. I hope that all members will support it at decision time.