A CAMPAIGNING politician has called for households at risk of financial collapse because of the cost-of-living crisis to be given a reprieve on outstanding debts.

Labour MSP Katy Clark said a “debt amnesty” would be a lifeline to many local residents who are struggling to make ends meet.

She wants both the Scottish and UK governments to face up to their “responsibility” to tackle the debt burden facing workers who have suffered hardship during the Covid pandemic and are now being squeezed by record inflation.

Ms Clark, who represents both Renfrewshire and East Renfrewshire as part of her remit as a West Scotland MSP, has argued the relief should apply for at least a year.

Public arrears such as council tax and school meal debt incurred by low income families should be suspended by the Scottish Government, she said.

She also wants outstanding debts to payday loan companies, banks and credit agencies to be “tightly regulated on a permanent basis,” with interest payments and fees curbed or waived by the UK Government.

The relief package for debt-ravaged families would apply to low-paid employees and those on Universal Credit, Ms Clark added.

“Households simply can’t absorb any more costs as they fall deeper into debt trying to make ends meet,” she said. “Many families are trapped in poverty. Any support they’re receiving from the Scottish or UK governments with one hand is being taken away with the other.

“The Scottish Government must use the power it has to target support, while UK ministers must take decisive action to curb excessive interest charges on loans.”

The Scottish Government said it is providing support through discounts on council tax bills, as well as giving councils the power to make discretionary offers of free school meals to families experiencing financial hardship.

A spokesperson added: “We have allocated almost £3billion in this financial year which will help households face the increased cost of living, including £1billion in services and financial support not available elsewhere in the UK, including Scottish Child Payment and Child Winter Heating Assistance”

A spokesperson for HM Treasury said: “We are committed to supporting those in problem debt.

“Through our Breathing Space scheme, we have protected over 100,000 people who are unable to afford their debt repayments by pausing enforcement action, creditor contact and most interest, fees and charges for a 60-day period.”