Loan Sharks
The final item of business is a members' business debate on motion S1M-3173, in the name of Trish Godman, on loan sharks. The debate will be concluded without any question being put.
Motion debated,
That the Parliament commends the excellent initiative of the Daily Record to name and shame the "loan sharks" who prey on vulnerable people living in poverty throughout Scotland; agrees with the newspaper that Scotland must not be a country where it is a crime to be poor and where loan sharks obtain huge profits out of other people's precarious financial circumstances, and is of the firm view that the Parliament, in close partnership with the UK Parliament, the police and other appropriate public agencies, must take decisive action to drive these predators out of their sordid "business" in the interests of their victims and victims' families.
First, I thank the Daily Record for its remarkable campaign to expose the squalid activities of loan sharks in poor communities throughout Scotland. I am also heartened by the promise of George Foulkes MP to ensure that a bill in Westminster will do something about the exorbitant interest rates that loan sharks charge. We need to work in partnership on that task.
Everyone in the Parliament knows that poverty is still widespread in Scotland. We see clear evidence of that in our surgeries and in the letters that we receive. Starting with this debate, we have an opportunity to do something about it. We have a duty to help to shape and lead public opinion—that is why we are here. We must rid our nation of the disgraceful notion that the poor will always be with us. We must change public opinion and we must change the environment of debt and poverty to one of civil rights and empowerment.
The problem is not only the huge interest rates but the horror stories that we hear when constituents fail to meet a payment. As a social worker in Glasgow, I saw for myself the misery that is caused when these sharks pursue unpaid debt. In the worst cases, I have known people to be admitted to hospital because they were suffering from depression and talking of suicide. On three occasions, I remember parents coming to me to ask that their children be taken into care because they were so terrified of what the loan sharks would do.
In today's debate, I offer some ideas about what can be done. All of us have a duty to ensure that everyone gets access to the social security and housing benefits to which they are entitled. Welfare rights officers, citizens advice bureaux and independent advice centres play a vital role, but they need stronger backing from the Parliament. Although we are able to assist in our surgeries, we have our limitations, so we must work as closely as we can with the professionals.
We must also ensure that financial services are properly regulated. Although it is already illegal for loan sharks to hold benefit books that belong to their clients—or should I say victims—more must be done to protect individuals' rights. The citizen must be given more protection in his or her dealings with moneylenders of all kinds.
The police deserve our support and encouragement to treat debts and the actions of loan sharks more vigorously. When I first entered politics, cases of domestic violence and racism prompted some police forces to say, "It's nothing to do with us." That is not the case today and it should not be the case as far as loan sharks are concerned. The police should be encouraged to intervene in the case of loan sharks and those who prey on vulnerable citizens. They know who they are in local communities.
Credit unions form the strongest defence that we have against loan sharks. Although community-based credit unions have a powerful and positive history of service in disadvantaged communities, they need our further legislative and financial support. The Executive must be congratulated on allocating £1.5 million to credit unions and, with the demise of poindings and warrant sales, £3 million to advice centres across the country. However, access to European Union funding has been slightly problematic, and I ask the minister to pursue a resolution to that issue in the very near future.
On Monday, I visited the Port Glasgow Credit Union. Although Port Glasgow has not been immune to the collapse of traditional industries, its credit union still has more than 2,000 members. It is doing a great job. I was also delighted to learn that the Johnstone Credit Union is to create more branches in my constituency, which can only be good news. We might not associate areas such as Bridge of Weir, Howwood, Kilbarchan and Houston with credit unions, but the need exists in those areas.
We should also consider one-stop shops where local people in need could obtain local government, Scottish Parliament and central Government services. Although that suggestion might sound fanciful to some, it might help vulnerable people.
We hear a lot of talk in the chamber about regeneration strategies, social inclusion and neighbourhood redevelopment. However, personal debt issues rarely feature in such plans as clearly as they should and must take their rightful place in the range of solutions that we offer to such problems.
Education is often the solution that we rightly apply to deeply rooted social problems. However, certain practical programmes ought to be woven into the curriculum to help young people to understand issues such as money, debt, benefits, credit and how to handle resources. Too often, the woman of the house is left to learn by her own wits how to balance the budget; too often, the mother goes hungry so that her children might be fed while the man gets his pint. That situation must change.
Although the Parliament is good at the rhetoric of partnership, the question is how we bring in important players to tackle problems at a local level. Where are the bankers, small business people, the trade unions, the voluntary and community organisations on the issues of debt and loan sharks? We must create structures that will allow them to engage constructively to ensure that we eliminate the cancer of crippling personal debt. For example, in Australia, central Government, local government and the kind of people and bodies I have mentioned sit round a table, discuss how people get into debt and reach decisions about how those people should manage it.
Loan sharks are a scourge in our communities. However, as long as people experience grinding poverty and harsh debt, such predators will always find a profitable market for their iniquitous practices. Because loan sharks prosper amid poverty, there are no easy answers. We will have to eradicate poverty in order to eliminate them.
That means a long haul for legislators, the police, banks, credit unions, trade unions, voluntary organisations and others. We have to seek a better, more tolerable country for those who are ensnared by loan sharks. In the 21st century, the poor need not always be with us.
I warmly congratulate Trish Godman on securing today's debate. Unusually for a nationalist MSP, I congratulate the Daily Record on its excellent campaign to expose the vile people who loan-shark at the expense of poor and vulnerable people in our communities.
The Daily Record campaign has exposed how widespread loan-sharking is and I share its determination to root out such people from our society. I am talking about people such as Rab Donnelly of Pennilee in Glasgow, who was today exposed as charging 25 per cent interest per week, and Patrick Martin of Whitfield in Dundee, who charges 50 per cent interest per week and who—illegally—takes the benefit books of those who owe him money and collects the payments himself. Then there are the so-called "Brothers Grim", David, Douglas and Henry Moodie, who charge a crippling 1,000 per cent rate of interest. One of their customers—for want of a better word—sadly killed himself due to his horrendous financial plight and the continuous threat of violence when he could not pay.
Loan sharks are brutal, blood-sucking parasites who should be allowed to prey no more. The police must investigate every case that the Daily Record exposes. Loan sharks and their acolytes cannot be allowed to use violence and threats to exploit those who have nowhere else to turn. Victims of loan sharks and those who know of their activities must be encouraged to come forward and report those crooks so that the full force of the law can be brought to bear on them.
There are victims such as Helen, a 28-year-old mother who had no access to credit and who borrowed to buy Christmas presents. There are victims such as Billy, who is an alcoholic who hands over his giro in exchange for just enough money to get drunk every day.
What should be done? First, support mechanisms must be established to reduce the financial exclusion for the 700,000 Scots who have no bank account or access to proper financial advice. Examples of such mechanisms include the establishment of credit unions that Trish Godman talked about in some detail; the £3 million to provide an extra 75 money advisers; and the national debt helpline. Both the latter are warmly welcome. Secondly, action against the sharks is vital—the full weight of the law must be brought to bear on illegal moneylenders.
Thirdly, we must ensure that benefits are maximised and we must introduce legislation to cap excessive interest rates and to eliminate irresponsible lending by companies that have no intention of seeing the debt paid off but want to keep people in debt for ever and a day.
As I told the Social Justice Committee last week, I was recently offered a credit card with a £10,000 limit, which was great. I was told that I would have to pay only £5 per month, plus the interest. If I had borrowed that money and followed that advice, it would have taken more than 160 years to pay off the debt. It is quite clear that even "reputable" companies are lending irresponsibly, particularly to people such as me, who might not be here this time next year.
Aw. We will miss you.
I knew that Brian Fitzpatrick would be heartbroken—he is deeply concerned about my interests.
It is unfortunate that the Consumer Credit Act 1974 is a reserved matter and that we must rely on our Westminster colleagues. Nevertheless, it is important that the Scottish Parliament does all that it can to eliminate the scourge that is loan sharks. I look forward to the minister's response to the debate. We must tackle poverty if we are to eliminate this scourge. The disease is poverty; we should treat it as well as the symptoms.
I congratulate Trish Godman. I was pleased to sign her motion. I add to that by saying that I am pleased to identify myself with the words that she used to address the motion. Her words were sensitive, practical, acknowledged the problems and suggested means through which to address the problem. I had a little difficulty when she mentioned George Foulkes, but if he is thinking along the same lines as her, I will go along with him on this occasion.
On a slightly amusing note, I competed with Jamie McGrigor to speak in the debate. He was telling me all about sharks of a different variety. They operate in the murky, deep waters of the oceans and they prey on the lesser and poorer species, and on the smaller and more vulnerable species. That is a comparison and an element of identification that Jamie McGrigor might have wanted to point out had he been here.
I want to comment on the Daily Record. I say to Kenny Gibson that if it is unusual for an SNP man to praise the Daily Record, it is even more unusual for a Tory to do so, but I go along with its policy of naming and shaming. Perhaps after it has achieved some success with this topic it could address other issues, such as the young thugs in our society. In particular, it could deal with drug dealers, the naming and shaming of whom might go down well with the public at large.
My fear is that the debt problem is expanding. Trish Godman talked about Glasgow and Kenny Gibson's comments tended to centre on the cities. We tend to think that that is where the problem is, but when we examine the debt situation, we see that the problem is not just loan sharks; massive personal debt is building up in this country. The problem could well extend beyond the traditionally deprived areas, where desperate people seek out those who will lend them money in the short term. Once they have taken a loan, what happens? We see bullying and fear, and people at the extremities of desperation. We must attack that situation. People grasp at straws, but when they do so they find that the straws come with shackles, which drag them down to deeper levels of desperation.
I am well aware of the involvement of credit unions. I visited a credit union at the John Pollock Centre in north Ayr, which does a tremendous job. It extends itself to those who have little hope and opportunity. I found that its clientele, desperate though they are, have a tremendous record of meeting their dues to the credit union. Therein lies an answer. Apart from using judicial means to attack loan sharks, I suggest to desperate individuals that links with their local credit unions can be more than beneficial.
When I said at the Liberal Democrats group meeting that I was particularly keen to speak in the debate about loan sharks, some of my rural colleagues became afraid that I was making a bid to be the fisheries spokesman. However, I assured them that I was not.
Like other members, I have come across loan sharks in different areas. That is disturbing, as members have recounted well. I will deal with one or two related points. More money is now available for advice, but it is important that the minister ensure that the right amount of money goes to citizens advice bureaux. Some councils tend to put the money into their own advice services, rather than citizens advice bureaux, which are more highly regarded by the public and are seen as independent. Many people do not suffer only from multiple debt and they do not need only debt counselling to sort things out. Citizens advice bureaux deal with issues other than debt, and can try to sort out the underlying issues that have contributed to a person getting into debt.
Like other members, I strongly support credit unions. Members might not be aware that we are eligible to join a credit union that covers all public employees in and around Edinburgh. I suggest that we would be putting our money where our mouths are if members made token contributions to the credit union.
We must make a serious effort with the banks. Very respectable banks make very unrespectable efforts to get people who should not borrow money to do so. Such banks are evil in the way in which they conduct their affairs—they press people into debt with a great come-on and then turn the screws on them when they get into debt. That is not the same issue as loan sharks, but it is related. One of the downsides of a capitalist economy is that people are encouraged to get into debt. It would be a good thing if the Executive or the Parliament could do something that would shame the banks into behaving themselves.
As other members said, poverty is fundamental. I respectfully ask Labour members to put pressure on their Westminster colleagues to pursue that issue. One good thing that Malcolm Chisholm did was resign as a UK minister when he felt that single parents were being dealt with unfairly. We cannot deal directly with benefits or pensions, but the issue is important. We must persuade our brethren at Westminster and Whitehall to do something about the problem.
We could do more to encourage schools to teach budgeting to young people. For many young people, mismanagement of their money, rather than insufficient money, causes trouble. Some people do not have enough money, but many simply mismanage it. Budgeting could usefully be taught in schools. It would be good for their arithmetic and for all sorts of things if young people learned to budget properly.
I, too, congratulate Trish Godman on securing the debate, which is on an important subject. I also congratulate the Daily Record on its campaign. I do not imagine that many members have experienced the entrapment, desperation and fear of being in debt to a loan shark, but they might be aware from constituents' experiences of the horror of such situations.
Having borrowed money, people soon realise that they will never pay off debt because of the high rate of interest that the lender has imposed. That is when despair sets in. Many people in Scotland might seem to have no other choice. They cannot access the financial services that many of us take for granted and, as other members said, many of those people do not have bank accounts. A parent might feel forced to borrow money to buy Christmas presents or to take their kids on a wee holiday, or to buy shoes and trainers that have an accepted recognisable label, so that their kids do not stand out from their pals as being different and suffer the stigma that can accompany that.
Another reason why people borrow money from loan sharks is to join pyramid schemes, which are promoted as an easy way of getting rich quick; they, too, have recently been highlighted by the Daily Record. Women who live in poverty can be particularly vulnerable to the promotion of such scams, which thrive on deceit and false promises. A recent rather scary scheme, which the Daily Record highlighted, was aimed at women.
Why do people fall for such scams? People who live in poverty, just like people who do not live in poverty, have dreams. Their dreams might involve a nice house, a car, holidays, clothes and toys for their children. Their dream might be just to escape from poverty and deprivation and from prejudice and discrimination. Such schemes prey on people's dreams and aspirations.
Of course, not only loan sharks cause debt problems. Other kinds of money lending, such as hire purchase, doorstep lending and some debt-management company schemes penalise the poor. That has been mentioned and highlighted with examples from citizens advice bureaux. It is obvious that action needs to be taken to deal with the problems that are associated with such lending, although I understand that much of that is reserved to Westminster.
As Trish Godman said, an alternative method of borrowing is supplied by credit unions, which provide affordable and manageable credit for many individuals and families. Like other members, I congratulate the credit unions and the volunteers who work for them on their commitment to the movement and to their local communities. At present, only a small number of the population are members of credit unions, but the Scottish Executive's recent welcome investment in credit unions should make a difference to that figure, by raising the profile of credit unions and encouraging more people to volunteer in their communities. I commend the Executive for its commitment to credit unions.
A couple of weeks ago, during volunteers week, I visited Kirklands Credit Union Ltd in my constituency. I experienced at first hand the work that it does and the invaluable contribution that a credit union makes to its community.
As Trish Godman implies in her motion, we should name and shame loan sharks, as the Daily Record does, and we should try to drive them out of the communities where they peddle their evil trade. As part of our commitment to fighting poverty and deprivation, we should also ensure that people know about alternative sources from which they can borrow money, if they must borrow money. Those sources provide realistic methods and times for repayment and do not lead to the fear and desperation that loan sharks create.
I will take up the theme on which Elaine Smith finished, but before I do that I want to congratulate Trish Godman on securing the debate and for covering some important issues in her speech. It is vital that we take a holistic approach to the problem. We need to recognise that loan sharks are a product of poverty. The unfortunate fact is that loan sharks exist to provide an unsavoury service, which they provide because of the dire straits in which so many people in our communities find themselves. Credit from loan sharks is often the easiest source of credit for people in those communities.
Although I congratulate Trish Godman for raising this important issue, rather than congratulate the Daily Record, I issue to it a challenge. The Daily Record provides advertising space to the legal but irresponsible credit agencies that are to be found day in, day out on the pages of papers like the Daily Record. Whether we like it or not, those agencies charge equally extortionate rates of interest to those of the illegal money lenders. Rather than provide that advertising space to them, I challenge the Daily Record to provide the same amount of advertising space, free of charge, to the credit union movement in Scotland. That would meet the point that Elaine Smith made. People would know where to contact their local credit union if a paper like the Daily Record that is read throughout Scotland carried advertisements from the credit union movement throughout Scotland. People should have access to good credit instead of to irresponsible credit.
The difficulty that we face is that moneylending is reserved, as it relates to the Consumer Credit Act 1974. However, a weight of evidence in excellent reports including the Church of Scotland's "Debt on our Doorstep" and from citizen's advice bureaux and the Scottish Association of Law Centres shows that the single biggest consumer debt problem are the legal lenders who lend irresponsibly at rates of interest that they know people will not be able to repay. The legal lenders make those offers of debt available to people in order to ensnare them. Once people on low pay are ensnared, it is difficult for them to get out of debt.
I implore Trish Godman and her Labour colleagues to ask Westminster to act on what was said earlier with regard to George Foulkes. I must say that if they act, it will be two years too late, but they should take action on the House of Commons Scottish Affairs Select Committee report "Poverty in Scotland". I ask them to act to get an overhaul of the social fund, which the Scottish Affairs Select Committee report called for. I ask them to recognise that the social fund does not help those who are in poverty; it perpetuates poverty by a system not of grants but of loans.
I ask Trish Godman and her Labour colleagues to act to tackle the poverty trap. I ask them to recognise that one of the biggest causes of debt for those who are on low incomes is the move from unemployment to employment. That is because of the withdrawal of benefits such as housing benefit and council tax rebate. The House of Commons Scottish Affairs Select Committee called for a retention of benefits for a period of six months to a year in order for people to get back on their feet.
Those proposals were published two years ago in that report, but it is unfortunate that they have not yet been acted upon. I implore Labour members in particular to call on their Westminster colleagues to act on the proposals now.
I, too, congratulate Trish Godman on securing an excellent members' business debate. The subject is one that affects my constituency in Glasgow, which is one of the most deprived constituencies in Scotland. I also want to congratulate the Daily Record. It is important that tabloid newspapers bring this issue to the forefront and raise the debate on ways in which we can tackle the problem of loan sharks.
Elaine Smith touched on an important issue, which is to recognise the people in the credit union movement who provide credit union services on a voluntary basis. On a number of occasions, I have called them unpaid local heroes. We need to recognise that those people give up their time day in, day out to provide a valuable credit service in our local communities.
It is clear that loan sharks present a living terror in our communities. Many graphic stories about them have been told by Trish Godman and in Daily Record articles. Loan sharks take advantage of those in our communities who are financially weak. We must take a number of measures to tackle the issue.
One area that I would like the minister to consider is the fragmented approach to providing credit union services in our communities. The community of Sighthill in my constituency does not have a credit union facility. One would think that, being one of the most deprived communities in Scotland, Sighthill would have a credit union as a basic standard. Communities such as Red Road and Royston do not have that basic standard of financial opportunity. I suggest that the Scottish Executive should consider a framework that will ensure that communities such as Royston, Sighthill and Red Road have that guarantee of a credit union service. Such a framework would ensure that the volunteers who take the time to be involved in credit unions are supported during that process. Glasgow Housing Association also presents an opportunity for us, through local housing organisations, to develop ideas on where to locate financial services. Housing services can identify areas where loan sharks are showing a presence. We should use local housing organisations to highlight those opportunities.
Importantly, we must tackle the banking corporations. Donald Gorrie touched on that. Banks do not provide services in my constituency. In Sighthill, Royston, Springburn and other areas, there are no banks that are willing to provide a service to people who are in financial difficulties. There is not even a cash machine in areas such as Sighthill, Royston and Red Road. How can we possibly encourage people back into the jobs market when the very basics, such as being able to access a cash machine, are not available to them in their communities? The challenge to the major banks is to ensure that they tailor services not just to suit students, the elderly or other sectors of the population, but to serve the needs of deprived people in our communities.
Loan sharks are a cancer in our communities and we must ensure that they are removed.
I warmly congratulate Trish Godman on securing this debate and on the way in which she spoke to her motion, with obvious sincerity and care. I agree with the sentiments expressed by all other members in the debate about the importance of credit unions, which do not really seem to have been as successful as they should have been. I am sure that we all hope that the Parliament can tackle that. That is what we are here for.
Citizens advice bureaux do an excellent job, not least in Inverness, by ensuring that people get the benefits to which they are entitled. The CABx have a marvellous record on advising people about benefits that would otherwise go unclaimed, and that should be acknowledged. I used to spend much time—about 10 years of my life—advising debtors on insolvency problems. In many cases, they came to me because they were threatened with eviction. That is one of the circumstances in which people turn to loan sharks—to pay off a legal lender who is threatening them with eviction. My experience in trying to help those people—usually females trying to prevent the eviction of themselves and their children—was a memorable and searing one. I do not believe that enough has been done to prevent banks and financial institutions from evicting people in circumstances where a little more flexibility would go a long way. I welcome the Mortgage Rights (Scotland) Act 2001, which we recently passed to provide a breathing space, but I am not sure that that in itself is enough.
Today's debate is about loan sharks. They are criminals, pure and simple. My colleague, Kenneth Gibson, mentioned the fact that their interest rates can amount to 1,000 per cent. We are talking about a different situation from that of legal lenders who charge excessive interest rates, and we should remember that they are distinct. Legislation on moneylenders around 100 years ago stated that 48 per cent was prima facie illegal. The Consumer Credit Act 1974 did not really tackle the problem. It is up to Westminster to stipulate a rate, perhaps linked to the base rate, which is prima facie excessive, out of order and illegal. The current system is far too complicated. Let us have a simple headline rate above which people cannot go.
I must congratulate the Daily Record on its excellent campaign. It does exactly what I would like to see campaigning newspapers do: to speak out about real misery and real social issues. For Tommy Sheridan to criticise the Daily Record on the basis that licensed moneylenders advertise in it is totally wrong. He totally misses the point. He said that legal moneylenders—who, I admit, charge excessive rates—charge the same rates as illegal moneylenders. I say to Tommy Sheridan that that is complete rubbish. I am sorry to disagree with him. Legal moneylenders do not charge 1,000 per cent a week.
Drug dealers' assets can be subject to legal attachment proceedings and there is a clear case that the same should happen to loan sharks. They trade in human misery and profit from human despair. Perhaps the Daily Record can take up the point that if we treat drug dealers in that way, we should treat loan sharks similarly. Their trade affects people in poverty, people who have a lack of opportunities and others whom members have mentioned. I hope that the Executive will consider that proposal carefully and I would welcome an immediate reaction from the minister on it. Why should loan sharks sit on thousands of pounds that have been extracted in a criminal fashion from the poorest people in society?
I join colleagues in congratulating Trish Godman on securing the debate and I congratulate the Daily Record. Often, there are animated discussions in Scotland about the role of journalism and often, we see advocacy journalism of the worst kind, whereby analysis and commentary are moulded and thrown into fact. Journalism is at its best when it takes up issues that affect families, communities and people as they go about their business. Such journalism is to be commended.
A number of members have spoken about the role of credit unions and I want to touch on that role briefly. Paul Martin talked about the issue. We all know from our junk mail that it is terribly easy to access credit if one has access to capital and income. The number of people who rush to offer discounted rates of interest must astonish many members—it has always astonished me.
That is not the case in districts in my constituency and in constituencies throughout the country. In whole areas of the country, there is no access to legitimate or formal finances and no way that one can get very small sums of money other than by going to people to whom one would never dream of sending someone, yet those sums make a difference in terms of leading a life of misery, fear and apprehension. Many of us would easily dispose of such sums without even thinking of them.
There is a role for credit unions. Unfortunately, Scotland does not have the experience that Canada, Australia, other parts of the Commonwealth and elsewhere have of the role of credit unions as significant financial institutions. They are not just for poor or poorer people. Work-based credit unions and community-based credit unions have an important and significant role in the annual summit in Australia. The minister should consider such experience and the information from it.
We have an idea about who loan sharks are in communities. The links between loan sharks and drug dealers are obvious in many constituencies. Often, a loan shark and a drug dealer are the same person or they are in the same family. We want to see activity in relation to their supplying drugs and their arrangements to extort even more money out of the communities that they assault.
We can all mutter and feel content about making a point about credit unions, but it is up to people such as the minister to find out what can be done to support, encourage and assist such ventures.
I sound a note of caution: we must remember that credit unions have to be community-based or work-based institutions. Our role should be to support, assist and encourage; it must not be to direct. If we try to do that centrally, we will fail and we must not risk failing.
I am delighted to be here this evening for a members' business debate and I am pleased about the choice of subject.
I congratulate Trish Godman on securing the debate and on her excellent speech. She laid out a significant framework of the key issues we must address. The Scottish ministers agree that it is unacceptable for people to make huge profits from others' financial desperation. We are aware of the concerns expressed today because they have been raised already by members of the Scottish Parliament. Many of us have been made aware of the concerns through representations by members of the public. The fear that pervades communities blighted by loan sharks is recurrent and compelling.
The Executive is fully committed to tackling financial exclusion. Illegal and extortionate money lending and the criminal behaviour that often goes with it is abhorrent in modern society. That is why—in a response different from that of my colleagues from other parties—I am delighted to welcome the work of the Daily Record. I am particularly delighted to welcome the current campaign and I congratulate the paper on its efforts to highlight the misery associated with money lending, much of which has been explained in the debate.
We support the moves by the Department of Trade and Industry to tighten existing credit law and to strengthen the powers of local authority trading departments in that area. I reassure people that we will work with colleagues in our party and in Westminster to ensure that the experience of Scottish people is well understood when that legislation is advanced.
As has been demonstrated, legislation on extortionate credit is at the heart of this issue. This is a consumer protection matter. It is therefore reserved, to ensure a uniform approach throughout Great Britain. A review of the Consumer Credit Act 1974 is under way and will take a number of actions to ensure consumers get a good deal and have redress against lenders who try to exploit them.
The United Kingdom Government wants to make it easier for consumers to get to court to throw out unfair and exploitative terms in loan contracts and to toughen up consumer credit licensing so the sharks are driven out of the market. We fully support it in that objective and we will use whatever means we can to advance those actions.
The despair caused by loan sharks does not come from financial exploitation alone; it also results from the threat of violence and harassment with which victims live. Trish Godman outlined some of those realities.
Members are aware that legislation already exists—the Protection from Harassment Act 1997, which is being strengthened in Scotland by the Criminal Justice (Scotland) Bill. That bill provides protection to all victims of harassment, including victims of loan sharks. The act as it stands allows victims to obtain a non-harassment order.
The debate has focused on the preventive role of the Executive and the assistance it can give to help prevent people getting into debt. Powers to tackle extortionate credit are reserved, so the way forward in Scotland lies in encouraging the development of new and alternative means to deliver financial services as well as ensuring that existing services reach whole communities.
There are a number of strands to our financial inclusion strategy, many of which have been mentioned. I want to respond to as many as possible of the points that have been raised in the debate. If I do not get through them all, I will be happy to follow them up with members later.
We are taking action to bolster Scotland's credit unions. I endorse the points that have been made about their significance. I reassure Brian Fitzpatrick that we take a community-based and workplace-based approach to credit unions. The strength of the movement lies in the fact that it is a grass-roots movement and is not dependent on central direction from the Government. Several members—not just Trish Godman—mentioned the significance of our approach and how it can help to solve problems of personal debt.
As a wee advert for tomorrow's community regeneration debate, some of the points that will be made tomorrow might be made tonight.
I hope that, as we roll out the community regeneration strategy—which takes a more strategic approach to the financing of local development projects—issues of personal debt will be a clear priority. The essence of the strategy is to work in partnership with local communities. In among that, I am sure that we can develop a comprehensive strategy for dealing with personal debt.
In the following comments, I will say what the Executive is doing, but I do not want to indicate complacency or satisfaction that we have got the matter right. There is much more work to be done and we see the community regeneration strategy as part of the answer.
I take Paul Martin's point that, although we have delivered "Unlocking the Potential: An Action Plan for the Credit Union Movement in Scotland", which is backed by £1.5 million to develop credit unions, the coverage is not complete. Credit unions are of great assistance to communities and we want to develop them as much as we can. It is worth examining the experience of other countries. Those experiences are often not directly applicable, but we might have lessons to learn from them. The examples of Ireland and Australia show that clearly.
Donald Gorrie talked about money advice. There is no doubt that people who get into debt need free advice. As an ex-welfare rights officer who worked for a local authority, I take slight issue with Donald Gorrie's point that advice from that source is not independent or of the required quality. There is evidence of quality advice in the local authority sector.
We support the voluntary sector and we recognise its need for more resources. The £3 million that has been provided for specialist money advice centres has been mentioned. That money is targeted at front-line services. The guidance is absolutely clear: the money is intended not to supplement existing services, but to develop appropriate new services.
Many important points have been made about banks. We are taking action to improve access to facilities in the most deprived communities. I promise Paul Martin that we will keep that under active review. We understand the importance of ensuring that there is a package of services for low-income families. The community banking agreement that has been developed in Wester Hailes provides an example of how we can progress. The streamlining of services that can be delivered through our new approaches, such as the practical steps and the one-stop shops that Trish Godman mentioned, can produce results. The issue of banks is critical and we can address it.
As many members have said, the fundamental point is the underlying determination of the Executive to tackle poverty and to assist people to get out of the grip of debt. That means assisting people to return to work, providing appropriate child care facilities to allow women to return to work and investing in housing and health. Through that comprehensive approach, we can begin to tackle poverty in our communities. I re-emphasise Trish Godman's point that in this debate, in which we have a responsibility to the people of Scotland, we should demonstrate that those who are in the grip of loan sharks and who are terrified of their debt and do not know what to do can get help. Such people are not alone and the options that are open to them can lift them out of the types of experiences that members have described.
The awareness-raising campaign of the Daily Record is crucial. This is part of the revitalisation of Scotland, although I am not sure whether the Daily Record would give the Executive or the Parliament credit for that. There is a sense that in Scotland we have the energy, the partnership and the commitment to ensure that we can begin to tackle such issues decisively. Partnership with a campaigning newspaper is extremely welcome. I hope that we can encourage more people to leave debt and the experience of loan sharks behind them. The Executive, in partnership with Westminster, will play a full part in ensuring that we provide answers to the terrible problems that have been described.
Meeting closed at 17:54.