The CAB says debt is a major problem

Last year alone more than 34,000 families took their cash worries to local CAB offices. Their total debt was estimated to be as high as £65m.

Following a UK-wide consultation, the Westminster government now plans to act.

It is to bring in tougher enforcement powers against loan sharks.

These will oblige all lenders to take account of the existing debt burden faced by borrowers.

Debt 'misery'

It is believed this will deter people from taking loans they cannot afford.

Mr Foulkes said: "High levels of personal indebtedness can cause untold misery for individuals and their families.

"Every year, thousands of Scots fall into debt. Last year, Scotland's 57 Citizens Advice Bureaux received 34,562 new inquiries alone on debt, involving over £60m.

"I think it is clear from the fact that there are 1,200 live cases here (Easterhouse) that they know that some action is needed and what we are proposing is a good first step.

George Foulkes: Identified debt as perennial problem

"We want to clamp down on loan sharks and ensure that people know the terms they are taking on when they borrow.

"We also want to ensure that financial institutions do not try to push debt onto people who can't afford it."

Loretta Gaffney, manager of the Easterhouse CAB, welcomed the new legislation but said more must be done in the long term.

She said: "Debt is significant in an area like Easterhouse where we have a huge number of cases.

Greater penalties

"Thirty-five per cent of our cases are to do with debt and if this is the beginning of measures to assist the most vulnerable people then we welcome that.

"We also need to look at finance companies enforcing debt upon people who cannot afford to pay it back as well as tackling the problems generated by loan sharks."

Scottish Liberal Democrat social security spokesman Archy Kirkwood MP called on the government to cap the rate of interest to prevent people from being exploited by debt companies.

Mr Kirkwood said: "The fact that so many people turn to loan sharks is a failure by successive governments to provide enough safeguards and benefits for people in debt.

"There must be greater penalties for irresponsible lending that should apply as much to banks as it does to loan sharks."