poll tax

Beware the Danger of the Return of Warrant Sales

Beware the Danger of the Return of Warrant Sales

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THERE have been calls of late for the Scottish Government to reintroduce warrant sale-style procedures; these seem now to have found a sympathetic ear.

The Accountant in Bankruptcy (AIB), a Scottish Government agency that advises ministers on matters relating to debt law, has said it is prepared to consider how the replacement procedure that was introduced, known as Exceptional Attachment Orders, can be simplified and streamlined to allow more easy use.

The process of poindings and warrant sales, which allowed sheriff officers to enter people’s homes and remove their household possessions for sale, was abolished by the Scottish Parliament in 2002, after becoming synonymous with the poll tax campaign. Tommy Sheridan, who would later be elected to the Scottish Parliament and introduced a private member’s bill which led to the abolition of the procedure, famously went to prison after disrupting the first attempt to hold one for the poll tax.

The AIB has also said it will consider whether the current procedure that was introduced, and requires a judge to authorise an order, could be removed. Sheriff officers could then threaten use of the procedure more easily against those who cannot pay their debts.

However, if the AIB position is adopted, this could well herald the return in Scotland to a Dickensian-style system of debt recovery laws which allows people to be threatened with humiliation and home intrusion, unless they can find the money to repay their debts, even if that means driving them into the hands of illegal and predatory money lenders. It was this legal abuse that led to poindings and warrant sales being abolished in the first place. In 1999, for example, the year Mr Sheridan’s bill was introduced, there were 16,585 poindings (although thousands more were threatened), but only 110 warrant sales executed. The reason being, warrant sales themselves were never an effective method of debt recovery, whereas the threat of humiliation and home intrusion was. Even people who genuinely couldn’t afford to repay their debts would be panicked into a response where they would do anything to raise the money.

Sheriff officers know this and it is why some are now claiming the new procedure is no longer effective and needs to be made easier for them to use as a threat (there has been no exceptional attachment orders executed in Scotland since 2012).

Responding to a consultation carried out by the AIB, sheriff officers Scott & Co stated, that in their experience the

“proceeds of auction in most cases are very low due to the poor value of second-hand goods and tendency towards hi-spec electrical items being subject to finance agreements.”

The question then needs to be asked, why does the AIB believe it would now be appropriate to increase the use of such procedures, even when sheriff officers acknowledge they are likely to fail? The only logical reason is the hope that by issuing such threats to the poorest in society, more people will then seek advice for their debt problems.

However, although some may well do so, many will struggle to find services or solutions that can assist them, with funding to local authority money advices services having been cut by 44 per cent in the last three years. More likely is many will become prisoners in their own home, fearful of every knock at the door, whilst suffering the stress and anxiety of believing their home will be invaded and their possessions seized with those of their family.

First published in The Herald on the 16th April 2018.

Poll Tax 20 Years On: Still Not Paying

Poll Tax 20 Years On: Still Not Paying

As we approach the twenty year anniversary of the Poll Tax being abolished, Alan McIntosh looks at what happened to the debt.

The Community Charge, or the Poll Tax as it was known, was introduced into Scotland one year ahead of the rest of the UK. It was to be the final nail in Margaret Thatcher’s coffin and arguably also the Scottish Conservative Party’s. The tax caused huge resentment and many saw it as evidence that Scotland was to be nothing more than a testing ground for the Tories.

Where it destroyed some careers, it made others, throwing the limelight onto Tommy Sheridan, Jim Sillars and Kenny MacAskill, who became the SNP’s Anti Poll Tax spokesman.

It was eventually abolished in 1993 after a massive campaign, which saw at its height one million non payers in Scotland and culminated in some of the worst riots in UK history, mostly notably with what became known as the Battle of Trafalgar Square.

However, despite abolition nearly 20 year ago, information obtained by freedom of information request shows Scotland’s councils are still pursuing over £322 million in community charge arrears, with some taking the view that all debts owed to them can still actively be recovered.

In England most of the debts were legally written off more than 7 years ago, but in Scots law it takes longer to extinguish debts that are legally constituted. Many will only be due to lapse now, although some accounts will still be recoverable for many years to come. Section 7 of the Prescription and Limitation (Scotland) Act 1973 means debts that have been legally constituted only extinguish after 20 years, providing they have not been relevantly acknowledged in that time; or the creditor has not made a Relevant Claim. Relevantly acknowledged means either a payment or a written acknowledgement of the obligation has been made by the debtor. Where a debt has been relevantly acknowledged, the prescription period runs again. A Relevant Claim could be raising a petition for bankruptcy against the debtor or executing diligence (wage arrestment, bank arrestment, attachment etc).

Despite this many local authorities have already taken the view to write off poll tax debts, with Inverclyde Council taking such a decision for its 2011/12 accounts. Other councils, such as Falkirk, have gradually reduced the amount owed by annually reviewing and writing off accounts as uncollectable. Glasgow City Council, however, is still owed approximately 27 pence in every pound that was ever billed (approximately £125 million) and has now taken the view it will still pursue those debts which have not been prescribed under the 1973 Act. Other local authorities such as Edinburgh are owed over £70 million, but cannot say how much is still recoverable, demonstrating the difficulty of doing due diligence on the collectability of such old debts, with many debtors now being deceased or gone away. It also highlights another problem in that in some cases, with old paper filing systems and the fact few debtors still have receipts 20 years on, where there are legitimate disputes, trying to resolve them fairly is impossible.

Debtors, however, are still being pursued and it is not uncommon for debt advisers to encounter clients still facing diligence or sequestration for debts which include amounts for community charge. The recent Scottish Diligence report by the Accountant in Bankruptcy illustrated this point by evidencing the fact that of the 84% of diligences executed in 2011/12 by local authorities, the debts being collected were not just council tax arrears but also community charge debts.

The poll tax was Thatcher’s legacy to Scotland and was widely seen at the time as hugely unpopular and unjust, evidenced by the fact its lifespan was so short and contributed to her downfall. Many of those ministers and councillors now in power will have marched and protested against the tax and been non payers themselves. It’s now therefore, not unreasonable to ask they urge all local authorities to clear old poll tax debts from their books. It’s ironic that where Scots were first punished with the poll tax, we will also be the last.

There is also the other issue of why debtors can still be pursued twenty years on and have diligence executed against them and be threatened with sequestration for debts which they were unable to defend in court in the first place.

John Wilson, the MSP for Central Scotland in the last parliament proposed a new bill to align the powers of councils to pursue tax debts with those of other creditors. Maybe now is the time to dust off that proposal.