Meeting of the Parliament 17 September 2019
I declare interests as a member of the Scottish Co-operative Party, as a Labour and Co-operative MSP and as a member of a credit union. The Scottish Labour Party and the Scottish Co-operative Party maintain a commitment to developing the role of credit unions and co-operatives, which they believe should be at the centre of community development and economic strategy.
As we have seen, it is easy to find warm words with which to support credit unions; we have all experienced their effectiveness in our communities. They are created and sustained by the vision and inspiration of volunteers, and their approach is in the sharpest contrast to the predatory practices of payday loan companies and shops that sell household goods at exorbitant prices—companies whose business model is actively to seek out the poorest and most vulnerable people in our communities. Credit unions have a powerful role in offering a different business model that works for everyone.
I recall that, when I was a Government minister a long time ago, a bit of research was done into credit union membership. It transpired, counterintuitively, that their members tended to be better-off people, with better incomes. Therefore, I ask the cabinet secretary to refresh the research, particularly in the light of what was has been said about the junior savers model. If the model is working, do we know whether it is working in the most vulnerable communities or is it working among families who perhaps are better informed about financial education?
We debated many of those issues in January this year; I would welcome an update, specifically on the practical things that the Scottish Government has done—as well as today’s announcement—to promote and support the ABCUL Scottish charter “A Credit Union Nation”. What has been done to address concerns of credit unions that I have highlighted about the impact of inappropriate use of protected trust deeds? They impact on credit union business, while making sure that the insolvency practitioner is paid.
We recognise the power of credit unions and I welcome the £10 million credit union investment fund. We now need the details about making the change that we seek. How will the money be allocated? What is the timescale for spending the money and repaying loans? Is it a one-off commitment or a recurring part of the Government’s budget?
Given the benefits that can be achieved by credit unions, which we all agree about, why is the funding in the form of a loan? I welcome what has been done, but were other models considered? We see the economic incentives that are given to the private sector to come into communities, so I wonder whether the Government would be prepared to consider the matter further. Will there be legislative or regulatory changes to support the investment? Will the Scottish Government consider means to exempt credit unions from business rates in order to ensure their greater visibility and to sustain town centres? Has the Government explored how credit unions might connect to Scottish welfare fund strategy? There could be a very good fit.
I emphasise that co-operative economic models offer huge opportunities for a stronger and fairer economy: I am sure that many members across the chamber agree. Such models are often not taught in our schools, colleges and universities, so it is important that we mainstream education about co-operative models for the economy in our education system, if the Scottish Government is willing to support that approach. The strength of the credit union and co-operative movements is that they bring together vision and the practical delivery of such ideas.
I thank the Scottish Government for what it is doing, and would be grateful if it could ensure that the practical ways in which its work is taken forward make the difference that we all seek for our communities.