Scottish Labour critical over lack of support for debt recovery policy

Scottish Labour has accused the government of being 'cruel' by failing to support his party's bid to shorten the time councils and government can chase people for debt.

Scottish Labour leader Richard Leonard. Picture: John Devlin

Party leader Richard Leonard said governmental bodies and local authorities currently have up to 20 years before they begin pursing someone for money owed.

His party wants to cut this to five years but the First Minister said such a move would hurt debtors.

Speaking at First Minister’s Questions, Mr Leonard said: “We think it is unfair that a person can be chased for a debt 20 years after it was incurred, that they had no knowledge of and when no previous action has been taken.”

He gave an example of a parent who stopped receiving child tax credits almost 10 years ago who was recently given a bill for almost £4,000.

He said Citizens’ Advice Scotland, Money Advice Scotland and debt charity Step Change are among those backing Labour’s proposal.

He added: “The system as it stands is not only unnecessary, it is cruel.”

He said his party would put forward their proposal to change the law in a stage three debate on the Prescription Bill at Holyrood later on Thursday and questioned why SNP MSPs are not planning to back it.

Nicola Sturgeon said her party were not supporting Labour’s proposal as advice from local authority organisation Cosla indicated it would “hurt debtors the most”, since it could lead to higher repayment instalments which could cause greater hardship to those who owe.

She said she hoped all organisations would “act sensibly” regarding the type of cases Mr Leonard had raised but said the Bill is “not the place” to legislate for shortening the timeframe as no dedicated public consultation has been held.