Scotland: Debt Arrangement

David Eyre
Political Journalist, Politics Show Scotland

During the last Scottish Parliament, MSPs decided to put a stop to poindings and warrant sales.

A poinding is used by people who are owed money to enter a debtor's home and value the goods in the house.

It emerged that one area won't be covered by the new scheme - fuel debt.

Following a poinding, officers appointed by a sheriff court can then take the goods and auction them off in a warrant sale to get cash to pay off the debt.

Poindings and warrant sales were often used by local councils in Scotland who tried to reclaim unpaid Poll Tax.

Many people in the country were outraged by their use, Scottish Socialist MSP Tommy Sheridan branded them 'terrorism of the poor'.

In 2002 the Scottish Executive introduced their Debt Arrangement and Attachments Bill. This bill will bring in a new system that by passes the courts.

People in debt will be able to get in touch with a national debt helpline, who will put them in touch with an independent administrator.

Debt Arrangement Scheme

They can then set up a Debt Arrangement Scheme, where they agree with their creditors to pay off the debt a little each week, with the amount they pay out pegged to their ability to pay.

But this week it emerged that one area won't be covered by the new scheme - fuel debt.

The number of people having their power cut off may reach 534 in 2003

Fuel debt is a major problem in Scotland. The number of people being cut off for not paying their bills is rocketing.

In 2001 just three people had their gas disconnected for non-payment of debt - this year the number of gas cut-offs is on target for 392. That's an increase of 12,967%.

The situation is even worse for electricity customers. The number of people having their power cut off is set to reach 534 this year, up from just 37 in 2001.

The energy companies say the massive rise has happened because they are working through a backlog of non-payment cases.

Scare tactics

But Energywatch Scotland, the consumer watchdog, is worried that the companies might be pursuing a more aggressive strategy to try and scare consumers into paying off their debts.

And even if Debt Arrangement Schemes become law in Scotland, the energy companies will still be able to go to a Sheriff Court and get a warrant to disconnect someone for non-payment.

Their right to do this is enshrined in the Utilities Act 2000. Because this is a UK law, it won't be affected by the Executive's new scheme.

So, will the power companies follow the spirit of the Scottish legislation and voluntarily agree to abide fully by the new Debt Arrangement Schemes?

Or will they continue their policy of cutting off people who can't pay?

Have your say

What are your views - Let the Politics Show know by using the comment form below

Politics Show

The Politics Show will be looking at the issues which have hit the headlines.

Tune into the Politics Show Scotland, on BBC One on Sunday at the later time of 1.30pm, with reporter Amber Henshaw and presenter Glenn Campbell.

---