The Scottish Government recognises the impact and distress that doorstep lending and payday loans can have on vulnerable people. The regulation of all firms and individuals offering, promoting or selling financial services is fully reserved to the UK Government with the responsibility for action against poor practice falling to the Financial Conduct Authority. The Scottish Government continues to do all that it can, with the powers available, to limit the proliferation of high street payday lending and promote access to affordable credit including credit unions.
The Fairer Scotland Action Plan includes a range of ambitions and actions to tackle poverty and inequality in Scotland, including promoting access to affordable credit. Many of the policy levers here are of course reserved, and we continue to work with the Treasury, the Financial Conduct Authority, the Money Advice Service and others to make sure their work takes full account of the situation in Scotland.
The Town and Country Planning (Miscellaneous Amendments and Transitional Saving Provision) (Scotland) Order 2016, which was laid in Parliament on 15 December 2016, increases planning controls in relation to new payday lending businesses to help address concerns about the overprovision and clustering of these premises on the high street.
Scotland has a proportionately higher level of credit union membership than England and Wales. According to the Bank of England’s most recent quarterly statistics, there were 99 credit unions in Scotland at the end of June 2016, with acombined membership of almost 388,000. This means approximately 7.2 per cent of the Scottish population are enrolled in a credit union, compared with only 1.5 per cent in England, and 2.6 per cent in Wales.
The Scottish Government is working with credit unions to grow the movement in Scotland by implementing the recommendations from the recent Credit Union Working Group report “Scotland’s Credit Unions: Investing in Our Future”, which was published on 10 February 2016 (http://www.gov.scot/Resource/0049/00493888.pdf). Following a key recommendation from the report, the Scottish Government has announced funding of over £300,000 to support the development of Junior Savers Schemes run by credit unions in partnership with schools across Scotland. The Scottish Government promotes credit unions through Scotland’s Financial Health Service website. This contains information on credit unions in Scotland and can help direct people to the credit union appropriate to them. The website also provides guidance on debt, managing money and other forms of ethical lending.
The Scottish Government welcomes the work of others in this area, including the Carnegie UK Trust which published ‘Gateway to Affordable Credit – The Report of the Affordable Credit Action Group’ in 2016. The report sets out recommendations to help grow not-for-profit alternative finance providers, including credit unions. The Scottish Government is working with the Trust on the implementation of the recommendations from this report.