Hansard

Like others, I welcome the debate, which is on a subject that the Parliament has a good track record on and returns to regularly. I confirm the Scottish Liberal Democrats’ strong support for the cabinet secretary’s proposals.

As I have done in previous debates, I declare an interest as a member of the HI-Scot Credit Union, which operates across the Highlands and Islands, and is almost certainly an enterprise with which the cabinet secretary has had discussions recently. My savings are not central to keeping HI-Scot afloat, but it is good to see that the credit union is making a positive contribution to communities across the region, progressing from its beginnings in the Western Isles. In my constituency, HI-Scot works closely with Orkney Housing Association and Voluntary Action Orkney, which epitomises the sort of partnership that is key to the success and sustainability of such operations in remote rural and island areas.

Although membership across Scotland is up to 430,000 or so, membership in the Highlands and Islands is a modest 3,200, which suggests that there is room for growth. I hope that the credit union investment fund and the Government’s developing strategy will allow specific attention to be given to ways in which the benefits of credit unions can be opened up to more individuals, households and communities across our rural and island areas. HI-Scot Credit Union shares that view.

Those benefits are not in question. As others have said, credit unions encourage a savings culture, provide affordable loans and, as the motion suggests, provide protection “from predatory lenders”. Credit unions are also based on the principle of a common bond—a shared connection within a community. They are about people helping people, whether it is the smaller volunteer-run unions with hundreds of members or the larger unions with paid staff and premises.

Perhaps contrary to the common perception, credit unions are not just for people who are in poverty. Michelle Ballantyne and Pauline McNeill were quite right to remind us that they are for all people in all communities. The investment fund can look at reinforcing that point.

Credit unions help to build resilience, improve financial capability and nurture cohesion within communities. Those are all desirable qualities at the best of times, but during a period of economic turmoil such as we have seen over the past decade, their importance increases many times over.

In Scotland, credit unions have proved more popular than almost anywhere else, so I welcome the proposals for an investment fund that were included in the programme for government. With about 100 credit unions in Scotland, more than 400,000 members, more than £0.5 billion in assets and loans approaching £300 million, there is real strength in the sector, as well as an appetite and capacity to grow.

One area for development—this issue was touched on in earlier debates and again today by Pauline McNeill, Ruth Maguire and others—is the scope for more action on payroll deduction. That is a great way of enabling people to save regularly and, where necessary, manage loan repayments effectively. There does not seem to be any good reason why that is not a standard workplace benefit.

To be fair, some employers do offer it, but they are very much in a minority. Even where it is available, it is often the case that little is done to promote take-up among staff. I would welcome details from the minister on the progress that is being made in that area, and the aspirations for it.

If nothing else, emphasising that it is a simple process for which, by and large, credit unions take on the administration has to be appealing to employers, who can be assured that there is no risk to them regarding loan repayments. Meanwhile, their staff can access credit and repay loans in affordable instalments.

As I said in the previous debate, there seems to be an obvious opportunity to link the work on promoting the living wage more closely to efforts encouraging employers to sign up to payroll deduction arrangements with credit unions and to identify individuals in those companies who can act as credit union champions to encourage take-up.

I welcome the debate and the progress that we are making in expanding the reach that credit unions have in Scotland. I hope that, by the time that we next debate the issue, their popularity, particularly in rural and island areas, and the use of payroll deductions will have increased. For now, I confirm that the Scottish Liberal Democrats will be supporting the motion and the amendment.