Meeting of the Parliament 17 September 2019
I point-blank refuse to think about Christmas while it is still September, but I agree with the cabinet secretary that, for many families, Christmas is a difficult event that gets them into debt.
I hope that this will not just be a cuddly debate about how much we love credit unions—which we do—but that it will be about the principle of wider access to community and co-operative banking, as outlined by the cabinet secretary. There is an ethical side to saving and funding life that is central to the fabric of a modern and progressive Scotland, and there is a wider issue about teaching people how to look after their money.
Worldwide, there are more than 40,000 credit unions in 90 countries. Staggeringly, in Ireland, 70 per cent of the population belongs to a credit union. I like that figure—it is one that we should aim for. Credit unions can transform people’s approach to savings and alleviate exorbitant debt.
The Scottish Co-operative Party said in its briefing that we need to move away from the idea that credit unions are a financial institution for poor people, although that attitude might be changing. Credit unions are for all parts of the community, all age groups and all professions.
I agree that more needs to be done to promote credit unions among young people. I was impressed that my 13-year-old niece has a credit union account, which she got at primary school. We are beginning to make progress in schools. If we give school pupils access to a credit union, it helps them to learn about saving while promoting awareness of the existence of credit unions, hopefully for life. Last year, Labour announced that we would expand support for credit unions and give every first-year high-school pupil a £20 savings account with a local credit union. Credit unions are part of the very fabric of what our party believes in. The aim is to reduce the influence of payday lenders and promote savings. Hopefully, if given the chance, we will do that within a generation.
One in four children in Scotland lives in poverty. Many families feel that they have to turn to high-cost credit to pay for everyday household items and bills. StepChange Debt Charity Scotland estimates that 700,000 people in Scotland are in or at risk of problem debt. I have noticed report after report illustrating the levels of personal debt; problem debt affects what seems to be quite a wide group of people, which is deeply concerning.
One in three working families in the United Kingdom are only one pay cheque away from losing their home. Government figures show that 16.5 million working-age adults in the UK have no savings at all. We are facing Brexit and austerity, which is perhaps not the best environment in which to encourage saving, but we need to promote the idea of it. People are relying increasingly on borrowing through payday loans and credit cards because they do not see an alternative.
StepChange highlights the fact that many people are turning to high-cost credit. It reports that its clients have an average of £6,500 in credit card debt. With interest of 22 per cent or higher on high street credit cards, everyone will see why that is a concern.
As an aside, we believe that local councils should have the power to limit the number of fixed-odds betting terminals and betting shops on our high streets to tackle high levels of debt through gambling.
The cabinet secretary referred to the fact that credit unions have highlighted that payroll deduction schemes are a priority for the sector. That works if the person agrees to a deduction at the source—