:00:18. > :00:22.Tonight on Newsnight Scotland - what is going on at Ibrox? Walter Smith
:00:22. > :00:27.quits. The supporters say they are concerned. The rest of us are
:00:27. > :00:37.confused. We tried to make sense of the latest bout of blood letting at
:00:37. > :00:38.
:00:38. > :00:43.the club will stop -- at the club. After full headlines for payday loan
:00:43. > :00:53.companies the First Minister asks for a cap on the interest rates, but
:00:53. > :00:54.
:00:54. > :00:58.couldn't be there are not enough of these companies?
:00:58. > :01:08.Walter Smith resigned this afternoon as chairman of Rangers after a
:01:08. > :01:14.weekend of rumours. At the heart of its troubles is a battle for control
:01:14. > :01:18.of the club. It might be easy to understand if it was all about
:01:18. > :01:24.business, politics, or even football. The problem seems to be
:01:24. > :01:27.that it is a bit of all of that, and a bit more too. The fact that
:01:27. > :01:36.Rangers collapsed last year as a business is part of the story, as is
:01:36. > :01:43.the fact that base exceeded on the field. There is even the fact that
:01:44. > :01:48.Rangers lost to Forfar athletic on Saturday. But the headlines this
:01:48. > :01:54.week, presumably the headlines tomorrow, are all about straight and
:01:54. > :01:57.dissent in the boardroom and amongst shareholders. And they are chiefly
:01:57. > :02:07.to do with perceived personality clashes involving Walter Smith, Ally
:02:07. > :02:11.McCoist, and Charles Green. Supporters organisations issued a
:02:11. > :02:17.joint statement this evening admitting even they have little idea
:02:17. > :02:27.what is going on. Walter Smith's resignation is a matter of deep
:02:27. > :02:31.
:02:31. > :02:38.story about sentiment and loyalty as well as football and business. Like
:02:38. > :02:46.all good pop will soak operas there is no certainty about which way the
:02:46. > :02:54.plot will twist next. I am joined by Drew Roberton from
:02:54. > :03:00.the Rangers Supporters' Association. How are you feeling tonight as a
:03:00. > :03:07.Rangers supporter? It is disappointing that Walter Smith has
:03:07. > :03:12.chosen to resign. He will have his own reasons. One wonders where this
:03:12. > :03:21.will read as next. When you think it cannot get any worse, then today
:03:21. > :03:30.comes along. The supporters have concerns about the financial
:03:30. > :03:33.stability of the club. Other major shareholders have the same opinion.
:03:33. > :03:43.There are calls for an extraordinary general meeting from some
:03:43. > :03:46.shareholders. Yes, there has to be an expiration of what is going on.
:03:46. > :03:53.There is a lot of room and conjecture about the financial
:03:53. > :03:57.position of the club. That must be cleared up. Ally McCoist displayed
:03:57. > :04:06.Walter Smith as the glue that holds Rangers together. Without him what
:04:06. > :04:15.could happen? Ally McCoist could possibly be isolated without Walter
:04:15. > :04:24.Smith. I know they are close and enjoy a good working relationship. I
:04:24. > :04:29.am sure the two of them have discussed it. I would hope Ally
:04:29. > :04:39.McCoist would continue as Rangers manager. Are you concerned by a
:04:39. > :04:40.
:04:40. > :04:45.return of Charles Green? I cannot understand it. He chose to resign. I
:04:45. > :04:49.do not understand why we as a club needs to employ a consultant. We
:04:49. > :04:59.have a Chief Executive in place. We have a board in place. Why do we
:04:59. > :05:05.need a consultant? Do you have confidence in the present board Mr
:05:05. > :05:13.Mark at the present moment, not a lot.
:05:13. > :05:17.Why has Walter Smith gone as far as you can make out?
:05:17. > :05:20.He was not there for his financial acumen. He was there because he
:05:20. > :05:27.represented the soul of the club. The supporters knew he was their
:05:27. > :05:37.man. That was the role he played. John Gregg was in a similar position
:05:37. > :06:00.
:06:00. > :06:05.until he quipped. -- John Greig was in a similar position. He is a man
:06:05. > :06:14.who has a strong record of success at Ibrox. He has got a reputation to
:06:14. > :06:24.protect. He has got his dignity. mentioned factions at the club. What
:06:24. > :06:24.
:06:24. > :06:31.are these factions? It seems to be to do with personalities. It is less
:06:31. > :06:38.clear that it is to do with strategy. It is not even as simple
:06:38. > :06:44.as saying it is to groups. But there are roughly two factions, they both
:06:44. > :06:47.agree that Rangers has spent to match. It raised �22 million last
:06:47. > :06:52.winter and is burning through that rapidly. It will take a couple of
:06:52. > :07:00.seasons to get back to where they think it ought to be. At the end of
:07:00. > :07:04.the day what has focused the minds of institutional investors is that
:07:04. > :07:09.money talks. They are not in this for emotion. They are in this to
:07:09. > :07:15.make a profit. That is what institutional investors do. That is
:07:15. > :07:24.how they raise their money. They have watched the share price go from
:07:24. > :07:30.over 19p last January -- from 90p in January, down to 42p. They are
:07:30. > :07:34.sitting on paper losses. They want to see what will happen. They want
:07:34. > :07:37.to turn that around. There is no emotional attachments. They will be
:07:37. > :07:47.ruthless if they think there is a better management team that can turn
:07:47. > :07:51.
:07:51. > :07:56.this around. Where is this going?It looks like there will be an
:07:56. > :08:02.extraordinary general meeting in the next six weeks. One would have to be
:08:02. > :08:07.called unless this can be resolved beforehand. It is not just down to a
:08:07. > :08:15.matter of directors battling it out. It comes down to who has the
:08:15. > :08:23.shareholding power. This is about institutional investors. There are
:08:23. > :08:27.two big minority groups. Thank you very much.
:08:27. > :08:33.Tomorrow night at Ibrox Rangers take on Newcastle United, who earlier in
:08:33. > :08:36.the summer became embroiled in a row over payday loan companies. One of
:08:36. > :08:42.their Muslim players said he would not wear the club strip if it
:08:42. > :08:49.carried sponsorship for Wonga -1 of the best-known payday loan
:08:49. > :08:57.operators. Shortly after that the Archbishop of Canterbury got
:08:57. > :09:07.involved. Today Alex Salmond was calling for a cap on interest rates.
:09:07. > :09:09.
:09:09. > :09:19.That could the best solution be to have more payday loan companies?
:09:19. > :09:21.
:09:21. > :09:30.These days it is not hard to walk down any high street that offers pay
:09:30. > :09:36.day loans. Pay day loan companies also have a high profile online,
:09:36. > :09:41.often promising fast approval for cash loans. If I type the term pay
:09:41. > :09:48.day loan into a search engine, I am almost immediately offered a sizable
:09:48. > :09:50.list of options. There is a long-term option that has a scene
:09:50. > :09:55.for hours and getting themselves into crippling debt. The First
:09:55. > :10:01.Minister has now pledged action, saying he wants short-term interest
:10:01. > :10:09.caps, along with other restrictions. Without independence, Alex
:10:09. > :10:13.Salmond's options are limited. That sentiment has found favour in some
:10:13. > :10:20.quarters. The head of a leading credit union says some people come
:10:20. > :10:24.to him with as many as ten short-term loans in place. It is
:10:24. > :10:30.very difficult once they get into that position where they have come
:10:30. > :10:35.to rely on it. A financial cancer has developed. They do not know if
:10:35. > :10:41.they can get out of it. What can they do? People get into desperate
:10:41. > :10:47.situations, even to the extent of contemplating -- contemplating and
:10:47. > :10:50.carrying out suicide. The issue has also exercised the church. The
:10:50. > :10:54.Archbishop of Canterbury has warned Wonga that the Church of England
:10:54. > :10:59.plans to force a out of business by competing against it. The campaign
:10:59. > :11:04.suffered a blow when it emerged the church had invested indirectly in
:11:04. > :11:13.the online lender, but the basic premise has been supported north of
:11:13. > :11:19.the border. 15 years ago, this Reverend laid out a campaign that
:11:19. > :11:26.spot for fair financial services. Part of it was to cut interest
:11:26. > :11:30.rates. At that time, we were talking about interest rates of 150%
:11:30. > :11:35.annually, from doorstep lenders, and that seemed quite horrific at the
:11:35. > :11:44.time. Now we are talking about ten times that, more than 40 times
:11:45. > :11:47.that, in terms of interest rates. It is quite stunning. As one of the
:11:47. > :11:53.country's better-known moneylenders, Wonga comes in for a
:11:53. > :11:58.fair amount of criticism. The company, says that risky borrowers
:11:58. > :12:02.are denied loans, and those who do take them are told exactly what they
:12:02. > :12:08.have to repay. Today the citizens advice service launched a campaign
:12:08. > :12:12.urging can't -- customers to fight back against what they call
:12:12. > :12:16.unscrupulous lenders. The consumer finance Association, rich represents
:12:16. > :12:26.operators in the sector, says its members are the only members who are
:12:26. > :12:27.
:12:27. > :12:37.put in place -- lenders who are put in place under monitoring by their
:12:37. > :12:44.
:12:44. > :12:51.companies continues, so does the business they do. It seems they are,
:12:51. > :12:53.for the moment anyway, here to stay. In Edinburgh now, Professor Jonathan
:12:53. > :12:56.Crook, a specialist in consumer credit at the Edinburgh University
:12:56. > :12:58.business school. And here in Glasgow, Margaret Lynch, the Chief
:12:58. > :13:03.Executive of Citizens Advice Scotland.
:13:03. > :13:08.What have you got against pay day loan companies? We have no
:13:08. > :13:13.particular objection to them. We understand that, in difficult times,
:13:13. > :13:20.people will sometimes need access to short-term credit. The problem is
:13:20. > :13:23.the way the pay day loan sector is operating at the moment. It is
:13:23. > :13:31.simply unacceptable in terms of the rates of interest that they are
:13:31. > :13:35.charging, unacceptable in the fact that they are willy-nilly going into
:13:35. > :13:39.people's bank accounts and emptying them of all of the cash and often
:13:39. > :13:46.leaving families without the ability to put food on the table for
:13:46. > :13:50.children, unacceptable and the fact that a lot of the buffet that they
:13:50. > :13:54.make is actually depending upon -- the profits that they make is
:13:54. > :13:59.actually dependent on rollover loans, a short term and high
:13:59. > :14:05.interest loans that goes into unsustainable debts. A number of pay
:14:05. > :14:08.day companies have withdrawn from the market recently. Is that
:14:08. > :14:18.something you welcome? As long as those companies had been given a
:14:18. > :14:28.warning that if they do not abide by the sector's code of common --
:14:28. > :14:36.
:14:36. > :14:40.conduct then they will have to be, after. Do you think this is a good
:14:40. > :14:46.thing? This is a difficult problem and there are different ways to try
:14:46. > :14:49.and tackle this. On the one hand, I heard you talk about a rate cap.
:14:49. > :14:52.There are advantages and disadvantages to that. Let's start
:14:52. > :14:56.with the idea of more companies in the market. If we increased the
:14:56. > :15:04.amount of competition in the market, the interest rates which people pay
:15:05. > :15:07.will actually go down. How far will they go down? Until he is not worth
:15:07. > :15:12.being in the industry anymore. that mean that some interest rates
:15:12. > :15:19.could go up? It could, but the ones that have left the market are the
:15:19. > :15:22.ones we have referred to earlier. What we really want, if we go the
:15:22. > :15:26.more competition roots, its customers to be able to shop
:15:26. > :15:31.around. The problem with this solution is that it takes time. It
:15:31. > :15:36.takes time for interest rates to come down as companies compete. The
:15:36. > :15:41.alternative, or one alternative, is to cap rates. One advantage to that
:15:41. > :15:46.is that it is quick, and the sense that, as is seen at it is on, you
:15:46. > :15:50.cannot have rates above that particular level. It also produces
:15:50. > :15:57.interest rates for everybody. It also would probably reduce the evil
:15:57. > :16:01.rate, because it would mean, and here is rub, that many people who
:16:01. > :16:06.are considered risky would not be able to get a loan. -- the default
:16:06. > :16:10.rate. The question is, where would they go? There is the unregulated
:16:10. > :16:14.sector of the market, the market where I think we would all agree it
:16:14. > :16:18.is not a great place to be, and there is quite a debate in the
:16:18. > :16:22.United States as to whether or not people who do not get loans, who are
:16:22. > :16:29.denied from the pay day loan sector, actually have access to other
:16:29. > :16:35.funds. Let me bring in Margaret again. What do you see as the way
:16:35. > :16:40.forward? People need credit, perhaps short-term credit, cannot go to pay
:16:40. > :16:46.day loan companies, where should they go? In the first instance,
:16:46. > :16:50.before we get to that point, we are campaigning at the moment, we have
:16:50. > :16:53.got a consumer campaigns. We are saying to people who have taken out
:16:53. > :16:58.a pay day loan, you are not powerless here. There are things you
:16:58. > :17:02.can do to help yourself and we can do to help you also. The first thing
:17:02. > :17:06.that we can do is check and see whether or not the company has
:17:06. > :17:12.treated you unfairly, and if they have, then we can put a complaint
:17:12. > :17:16.through to the financial on button. At the moment, the financial
:17:16. > :17:26.ombudsman is finding about 72% of the complaints are upheld, and that
:17:26. > :17:28.
:17:28. > :17:38.is when we are exerting a certain amount of protection. Do you support
:17:38. > :17:39.
:17:39. > :17:47.the idea of a cap? Gas.What would you cap? The APR at Wonga is over
:17:47. > :17:52.eight thousand percent that the moment. It has to be attractive
:17:52. > :17:59.enough for investors who want to come in and provide and get a decent
:17:59. > :18:07.return on their investment. We heard earlier about an unacceptable
:18:07. > :18:13.return, 150%. Today we are tolerating 6000% as a return on
:18:13. > :18:22.investment. How did that change happen? Which change?The interest
:18:22. > :18:27.rates rising. I think the interest rates rose partly because people
:18:27. > :18:32.suddenly found they needed credits and were more desperate to do that
:18:32. > :18:36.to actually get the credit. Part of the problem is, if you cap the
:18:36. > :18:41.rates, where would the high-risk people go? When someone goes to one
:18:41. > :18:45.of these companies, their risk is assessed, and when it is a fast, it
:18:45. > :18:49.is decided whether or not they get a loan. If they do not get a loan, the
:18:49. > :18:54.question is, these people who are vulnerable in all sorts of ways,
:18:54. > :19:00.being characterized as a high risk, and secondly, by people who are
:19:00. > :19:04.typically not shopping around. They are desperate for funds. They do not
:19:04. > :19:10.shop from place to place to find the lowest interest rate. The question
:19:10. > :19:15.is, where do they go? I have cut rates sympathy with people who say,
:19:15. > :19:20.well, the interest rate of several thousand percent. It is. But where
:19:20. > :19:23.do people go if you cap the rate? The churches are talking about
:19:23. > :19:30.competing with the pay day loan companies. Thank you very much for
:19:30. > :19:34.that. Let's take a look at tomorrow's
:19:34. > :19:44.front pages. As you would expect, Walter Smith is featuring on many of
:19:44. > :19:47.
:19:47. > :19:50.them. He is on the front page of the Scotsman there. Alarms to detect