Today’s announcement by Nicola Sturgeon in relation to the Coronavirus (shortly followed by a similar announcement by Boris Johnson), has effectively plunged Scotland back into Lockdown.
This is the closest we’ve been to having a full Lockdown since the first one ended. They are not identical, but judging from the pattern of how things develop, it is highly likely they could end up appearing very similar.
The reality is, though, this Lockdown will not be a repeat of the last one, even if the measures introduced eventually rival those of the first.
Where our financial and mental resilience is, 10 months on, is a pale imitation of what it was.
Jobs have been lost, relationships and families broken, businesses closed, savings exhausted and debts accrued. Even the measures introduced to protect people are now worn out and nearing their expiration dates.
It also appears there is no exit strategy, beyond the vaccination programme, as to how we will extricate ourselves financially from this crisis.
Regardless of this, expect a day, not so far in the future, where our political leaders will declare victory over the virus, like , George Bush did a month and a half into the Iraq War.
This crisis, however, like the Iraq War will continue for years to come and, similarly, we will be counting the costs for years to come. There won’t be any daily press conferences, however.
It will be at that point, we will learn we are not all in this together.
Preventing Homelessness
First, there is the issue of homelessness.
The safeguards that were introduced in April last year in Scotland, to help prevent evictions, are no longer as effective as they were.
At the time, they did not ban evictions, but only required landlords to give six months’ notice where they wanted to evict someone (3 months for antisocial behaviour).
Where that notice has now been served and expired, court actions can now begin. So in this Lockdown, evictions will occur, even as we tell people not to leave their home and to stay safe.
Even the temporary ban on evictions that was introduced through the Scottish Parliament, just before Christmas, now expires on the 22nd January.
Consumer Credit
Banks and Credit Card companies are also not showing the same understanding they initially did.
They now want people to start paying something to their credit cards, car finance and loan agreements.
They may still be prepared to give payment breaks, but only on a case-by-case basis; and let’s just say there is a presumption against them. They are also still adding interest and charges by default; and missed payments are being reported to Credit Reference Agencies, trashing credit scores.
Home Owners
There is also still no solution for Home owners who have lost their job or are struggling to pay their mortgages; and there is no support for housing costs available through Universal Credit, like there is for tenants.
You can get some help with your mortgage interest payments, though, through the UK Support for Mortgage Interest Scheme.
However, you need to wait 39 weeks for that, which means if you lost your job in April 2020, you may now, in January 2021, be entitled to some limited support with your mortgage interest payments.
If you have a capital and repayment mortgage, it won’t pay everything, so your 9 months of arrears is likely to grow.
On top of that, the help you do receive is not a benefit, it comes in the form of a loan and is secured over your home.
During the last Credit Crunch, it was still a benefit and you started receiving help after 13 weeks.
Self-Assessment Debts
Also, for those who are self-employed: the Payments on Accounts they were allowed to miss in July? These may become Balancing Payments and be due for payment at the end of January. HMRC will expect them to be paid.
If people cannot pay them, they may be able to seek Time to Pay Arrangements. Interest will be added.
Council Tax
On top of that, Local Authorities are now actively seeking to recover Council Tax Arrears, built up earlier in the financial years and debts are now in the hands of Sheriff Officers.
People can also expect next years Council Tax Bills in March, and its likely they will be increased to fill the black hole in many Local Authority budgets.
Universal Credit
Those on Universal Credit and Working Tax Credits will also likely see a reduction in their income in April 2021, when the amount they receive is cut, unless the UK Government decides not to end the increases they introduced last April.
For single claimants this reduction will be worth £92.07 per month, with their monthly payments falling from £409.89 down to £317.82.
UK Furlough Scheme
We also have no commitment from the UK Government that their Furlough Scheme will continue beyond the 30th April 2021, which means many employers will have to start issuing redundancy notices at the end of this month.
Scottish Emergency Legislation
Also, in addition to that the Scottish Government have given no indication whether the emergency provisions they introduced via the Coronavirus (Scotland) Act 2020 will continue beyond the 31st March 2021, many of which are designed to protect tenants and those in debt.
Bad Tempered Lockdown
The truth is this Lockdown is likely to be a bad tempered one, without the scenes of people clapping our National Health Service Workers on their doorsteps. It’s not because the goodwill for them has gone, but it is melting like snow off a dyke for our political leaders.
If our political leaders want people to stay the course, then it is time for a full refresh of the measures in place to protect people, not only during this crisis but for the months and years that follow.
Now much of what is needed is in the hands of the UK Government and is contained in reserved powers. To that extent the Scottish Government are powerless to do anything in those areas.
However, there remains large devolved areas where the Scottish Parliament can make a difference. Housing and debt laws are but two areas and ones that this blog is concerned about.
The Scottish Government, therefore, need to look at those areas where they can act to protect those who are vulnerable and those who have been financially impacted by this crisis.
One way of doing this would be to immediately seek to extend the Eviction Ban to the the end of March 2021, before it expires on the 22nd January.
They also need to give an undertaking they will extend the provisions contained in the Coronavirus (Scotland) Act 2020, until the 30th September 2021 in relation to debt and evictions.
They could also take a leaf out their own book from 2009 when they convened the Debt Action Forum (DAF) in response to the Credit Crunch, which led to the Homeowner and Debtor Protection (Scotland) Act 2010.
A similar initiative now and the reconvening of the DAF, could look at what other medium to long term measures could be introduced to support people with the effects of Covid 19 on their finances.
Otherwise, any declaration of victory and of the war being over, will be a hollow one.
