Meeting of the Parliament 17 September 2019
I thank the cabinet secretary for bringing this debate to the chamber.
Scottish Greens, too, were elected on a manifesto to champion not only credit unions but a wide range of other realistic alternatives to the traditional banking sector, including co-ops and mutuals.
The cabinet secretary has announced a new £10 million fund in the programme for government that will support the growth of credit unions across Scotland from financial transactions. I look forward to further details of that in due course. She may be able to say a bit more about how that will be handled when she winds up. She mentioned consultation with the sector.
The latest data that I have shows that Scottish credit unions have about £290 million out on loan. Another £10 million is about 3 per cent. It is critical that financial transactions do more than just conventional capitalisation of credit unions. I am interested in further details, either this afternoon or in due course.
As other members have said, there are about 90 credit unions in Scotland with a membership of over 432,000, which is extremely encouraging. That is a lot of people and it is the biggest mutual sector in the Scottish financial industry.
Although the credit union sector in Scotland is profitable and self-sustaining, there is a strong case for investment in order for the sector to grow in the way that it would like to. Therefore, I welcome the support for a new strategy. However, it is important that that strategy also has the support that it needs to be implemented.
The Scottish household survey in 2017, which is the latest one for which we have detailed statistics—the 2018 one will not be available until October—shows that 22 per cent of households had no savings and 14 per cent had less than £1,000. If that figure is broken down by housing tenure, it shows that there are real inequalities; 49 per cent of people in social rented accommodation had no savings at all and 18 per cent had less than £1,000. In comparison, in the owner-occupier sector, only 9 per cent of people had no savings and 71 per cent had savings of more than £1,000.
The ability to access finance and to save is critical, and that is massively influenced by such things as one’s housing tenure. Therefore, in relation to affordability, it is just as important to think about housing as it is to think about credit. Also significant is the big gender gap.
The credit union movement is a form of mutual co-operative membership association that is not uncommon across the world. In a series of reports since the financial crash, a number of respected institutions have called for greater democratisation of the financial sector. In 2016, Friends of the Earth Scotland, Common Weal and the New Economics Foundation published a report called “Banking for the Common Good”, which advocated the development of an “ecosystem” of institutions, including credit unions as well as people’s banks, which could be structurally designed to work for the common good.
In the debate that we had in January, I recall referring to the Sparkassen banking system in Germany, which is owned by local authorities. In Switzerland, 45 per cent of citizens are customers at one of the local banks that incorporate the cantonal network. Altogether, the network holds more than £256 billion of domestic finance, and one third of small and medium-sized enterprises conduct their business through it. We should be alert to the bigger picture and remember that it is about not just credit unions but the democratisation of the wider financial sector.
I welcome the debate. Scotland’s credit unions are a welcome part of our financial landscape. I thank the cabinet secretary for her commitments. I am happy to build on the consensus that exists, and I look forward to receiving further details of her proposals.
14:56