Independent Scotland could create consumer ombudsman

Launching the proposals before an audience of businesses, regulators, regulatory experts and consumer groups in Edinburgh, Finance Secretary John Swinney said the Government would seek to create a distinctive Scottish system, replacing the current "cluttered and confusing" approach.

He set out two options, both supported by an overarching consumer ombudsman designed to replace the 95 ombudsman schemes operating across 35 different sectors.

The first option would see the creation of three agencies, covering economic regulation, competition regulation and consumer advocacy, advice, education and enforcement.

The second option would consist of two agencies - a combined consumer and competition authority, and a combined economic regulator.

The Government has also set out its proposals to tackle consumer problems such as payday loans, parcel delivery charges and nuisance calling.

It would consider options to introduce tougher regulations against cold calling and bring in stricter regulation for the payday loan industry with the introduction of a system to cap interest rates and prevent debts ''rolling over''.

Mr Swinney said: "At the heart of what we are setting out today is an agenda which essentially champions the interests of consumers, and ensuring that the regulatory landscape addresses the needs of consumers, and does that in a way that reflects the needs of good, reliable solid businesses."

He added: "As incomes are squeezed and costs continue to increase, it is even more important that we are protected from unscrupulous traders, with those on low incomes, the elderly and the vulnerable particularly at risk of being exploited.

"The Scottish Government currently does not have responsibility for arrangements to empower and protect consumers.

"With independence, we would be able to build a simpler system which meets the needs of our people, and puts families and households, small businesses and local communities at the heart of everything that it does."

Plans for a new overarching system were backed by consumer organisation Which?

Executive director Richard Lloyd said: "Which? welcomes the way the Scottish Government is consulting consumers in developing their proposals and looks forward to continuing to work closely with the minister.

"In particular, Which? is very much in favour of a consumer ombudsman to deal with all the complaints that currently fall outside the different existing schemes and leave consumers without the option of alternative dispute resolution in certain sectors, like travel."

Ian McKay, Scottish chairman of the Institute of Directors, also welcomed the paper but warned of the potential difficulties of creating a combined consumer and competition body.

"Is there not a danger that in centralising and creating this much more powerful single unit, that, in fact, it might lead to more difficulty in dealing with a market place which requires to be fast-moving, which requires to stimulate competition," he said.

Commenting on the proposals, Liberal Democrat leader Willie Rennie said: "Splitting regulation off from the rest of the UK could make matters worse for the consumer, not better.

"The SNP's plans for parcel delivery regulation risks hitting every home and business in Scotland with extra charges for receiving delivery from the rest of the UK. Just look at how much it costs to send mail to Ireland.

"On nuisance calls, the UK Government has already announced it will take action and MP Mike Crockart is taking a private members' bill through Westminster to tackle this issue right across the UK."

Labour's constitution spokesman Drew Smith said the Government's proposals were a "nice-to-do" list.

"The opportunism of the SNP when it comes to 'jam tomorrow' promises is nothing new," he said.

Pointing to SNP policies in areas such as rural delivery charges, he added: "To pretend that their own decisions in government have never taken place and instead blame everything on the United Kingdom is blatantly untrue.

"This paper is as much a damning indictment of the SNP's current failings as it is a worthless wish-list of assertion and empty promises."