The economic depression may be global in its origins and effects, but the solutions offered to ordinary people at risk of losing their homes are definitely local, and within the power of the Scottish Parliament to legislate upon. Cathy Jamieson argues for support for those whose homes are at risk, and pledges to back the Government if they will grasp the nettle and accept cross-party action.

---

Scotland is facing an unprecedented economic challenge.

We only have to look at what has happened to the HBOS to see this. Scotland’s oldest bank survived everything from the Darien Scheme to the Great Depression, but has been brought down by the current crisis.

It’s not just the HBOS that has needed Government help. We all remember the queues outside the Northern Rock, which ultimately required to be nationalised. The Governor of the Bank of England, Mervyn King, says that the banking system has come closer to collapse than at any point since the beginning of the First World War.

There’s no doubt that the recession raises important questions for the major high street banks as well as government. Like many people, I find it morally offensive that many of those responsible for bringing Scottish banks to the brink of collapse are walking away as multi-millionaires.

I would like to see those senior managers who remain in place donating their bonuses this year to a special fund to help struggling families who are in danger of having their homes repossessed.

Statistics from the Scottish Courts Service show that there were over 1,000 actions for home repossession in September. Every one of these cases is a personal tragedy for the family involved.

The Scottish Government’s announcement of support for a national debt helpline is a welcome step, but Ministers could do much more to prevent home owners from being thrown onto the street.

At Westminster, Gordon Brown has acted decisively by imposing a new duty on lenders and Courts in England and Wales to demonstrate that repossession is genuinely a last resort.

The new English pre-action protocol has been described as ‘ground-breaking’ by the housing charity Shelter. It means that lenders must show they have considered all possible alternatives before going to Court, or costs will be awarded against them.

In Scotland, there is no such right. Banks are entitled to raise repossession proceedings if a home owner is just £1 in arrears. Furthermore, there is no automatic right to legal aid as there is in England and Wales.

We know that pre-action protocols work because when the UK Justice Ministry introduced an Eviction Pre-action Protocol in England and Wales it led to an 11 per cent fall in the number of eviction actions.

Scottish home owners deserve at least the same protection as those in the rest of the UK. I simply do not understand why Health Secretary Nicola Sturgeon won’t even look at implementing similar guidelines in Scotland  to ensure that repossession is also a last resort here.

Financial institutions that have received billions of pounds from the taxpayer should change their attitude to customers who have trouble making their own payments.

Along with Scottish Labour, the Scottish Liberal Democrats, the Green Party and independent MSP Margo Macdonald are also pressing the Scottish Government to introduce new Court guidelines on repossession.

In difficult economic circumstances I want to see every possible alternative explored before families are taken to court, including part-ownership, and we have proposed that banks should take a stake in the property to cover arrears, when customers get into trouble.

This would mean that a vulnerable family could reduce their mortgage payments by up to 50% and keep their home, while the bank’s financial interest is protected.

Govan Law Centre’s Mike Dailly has advised us that such a scheme would require legislation in the Scottish Parliament to create a fast-track conveyancing system. He added: “It is clear that we are in uncharted territory and we need some fresh thinking to deal with the tough times ahead.”

I met with Health Secretary Nicola Sturgeon recently and urged her to speak with the banks to promote shared equity as an alternative to repossession. She has gone some way to meeting this demand with proposals for their own part-ownership scheme, underwritten by the Government.

We are waiting to see more details of this scheme, but we are willing to give our support to any serious measures that will help see people through in tough times. Scottish Labour has shown we can build a progressive consensus at Holyrood behind our proposals.

In this spirit, I believe there is a case for a special cross-party investigation to see what more can be done. We need to understand the mistakes that were made by Edinburgh’s financiers and find practical and imaginative solutions to see us through hard times.