Civic Scotland Owes Scotland

Alan McIntosh looks at the recent scrutiny of the new Debt Arrangement Scheme Regulations and argues a debt is owed to the people not just by the Parliament, but Civic Scotland.

Alan Cochrane, Editor of the Scottish Telegraph recently wrote a wonderful piece on the Scottish Parliament Committee’s that summed up what many are thinking but few have expressed: that the committees are no longer doing their job[i].

The cause of such failure? The iron clad fist of the Scottish Government which refuses to tolerate dissent from its MSPs.

It’s definitely one of the drawbacks of the SNP’s 2011 landslide and has exacerbated the weakness inherent in our unicameral system.

Cochrane cited the example of the Justice Committee and their consideration of the proposals to close 10 Sheriff Courts and 7 Justice of the Peace Courts; and featured the example of Roderick Campbell MSP, one moment expressing his disappointment Justice Minister, Kenny MacAskill wouldn’t reconsider his plans, but who then voted for them anyway, despite the fact his constituency’s Cupar Sheriff Court would be closed.

Another example was provided last week by the Economy, Energy and Tourism Committee and their consideration of the new Debt Arrangement Scheme Regulations.  In addition to the Committee failing in its functions to provide proper scrutiny, what was also revealing was the growing political weakness of Civic Scotland. ­­­

The committee invited only three organisations to make written submissions and of these, the two that represented the advice sector both failed to identify key issues affecting their members’ client’s interests.

One of these was the fact the new regulations fail to go as far as they could to protect consumers from the now ubiquitous pay day lender. The new regulations do allow interest on debts to be frozen earlier, but fail to bring protections forward to the earlier point of when a debtor intimates that they intend to apply: a proposal that was overwhelmingly supported by the advice sector during the consultation stage of the Regulations.

The arguments for such increased protection is strong and would benefit not only debtors, but also other lenders who often see their proportion of a debtor’s total debt being reduced during the time it takes for a debtor to get advice and apply to the Scheme. The effect of this is socially responsible lenders then receive less each month and wait longer for their debts to be repaid.

In defending his decision not to make such changes, the Minister, Fergus Ewing, cited the fact currently only 41% of those that intimate an intention to apply actually apply. However, this ignores the fact most advisers only submit an application once the intimation period expires.

Also as the current intimation procedure only protects debtors’ from diligence, where there is no threat from those procedures, intimations are rarely use, which is in the majority of cases. Were, however, it to provide an interest freezing facility, it would be used in almost all cases.

In addition to this Fergus Ewing argued that such increased protection would only create additional problems, in that interest would be frozen and then have to be reapplied if the debtor didn’t make an application; however, as money advisers know, in the majority of cases interest never ceases to be applied anyway and is only written off at the end of successful plans.

In addition to this, another issue that Civic Scotland failed to raise was the implications of new provisions that will see the possibility of all interest and charges being reapplied to a debtor’s debts when they pass away during a plan, despite the adverse effects this may have on their family.

Rather than allowing balances to be frozen at the date of death,  to allow a debtor’s estate to be wound up and the outstanding amount paid off, it would appear the Scottish Government is content to allow payday lenders to reapply interest at 4,000% APR to debts that may have been in programmes for several years. In addition to this they failed to raise the issue of what happens in a joint plan when one member of  a couple passes away and the other participant only has 21 days to reapply before the interest on their debts are reapplied. Maybe money advice services need to be provided from local co-operative funeral parlours.

These aren’t the only issues that were missed by Civic Scotland. There are others, such as the limiting of payment breaks to 6 months, despite the fact this may result in new mothers being unable to avail themselves of family friendly policies like 9 months statutory maternity pay and may see those that do being penalised; but essentially the big issue is the failure of not only the committee to hold the Minister to account, especially in relation to some of the poorly informed evidence, but also the failure of Civic Scotland to identify and raise issues of concern to their broader constituencies. This may not be surprising  considering Kenny MacAskill’s threat to the UK’s Supreme Court that “he who pays the piper, calls the tune” and possibly also the funding crisis that many  Civic Scotland organisations are facing. However, the Scottish people deserve better from both the Committees and from Civic Scotland.

Arguably, however, the failure of Civic Scotland is the greater of the two. MSPs are political animals and can often be expected to try and perform the role of a herdsman rather than that of a champion of their constituents.  Civic Scotland, however, it could be argued have a moral duty, if not a political one to perform the functions of a second house in our unicameral system and ensure legislation is properly scrutinised and the voices of the people heard.  This is what they did with the Scottish Constitutional Convention in the 1990′s when the democratic deficit was at its most acute and arguably has always been their role;  arguably even prior to 1707 the General Assembly of the Church of Scotland (an earlier manifestation on its own of Civic Scotland?)  did this by wielding not only moral, but political power.

The current weakness of the Scottish Parliament’s committees is a major cause for concern, especially as other legislation such as the new Bankruptcy and Debt Advice (Scotland) Bill will soon be passing through them and if implemented will see huge amounts of powers transferred from the courts to the Accountant in Bankruptcy’s office, creating access to justice issues.

It may be unrealistic to expect Government MSPs to speak out, but it is imperative Civic Scotland does with all its constituent parts, and performs its moral and historical duty of ensuring parliament is held to account.