Credit Unions
We come to the debate on motion S1M-1751, in the name of Jackie Baillie, on credit unions. I ask members who wish to speak in the debate to press their request-to-speak buttons now.
I call Jackie Ballie to speak to and move her motion. [Interruption.] Order. Let us make a start. Members who do not wish to stay for the debate should leave the chamber quietly.
I am pleased to be able to open this debate on the credit union action plan for Scotland "Unlocking the Potential", which we published on Tuesday. The action plan is backed by funding of £1.5 million to kick-start its implementation.
Last March, we pulled together the key movers and shakers in the credit union world in Scotland and a range of organisations that we considered had a useful contribution to make. There were two aims: to remove barriers to growth and to ensure that credit unions throughout Scotland have access to the development and support services they require.
I say straight away that far from the action plan being an indication that the Executive is trying to take over the movement, we fully recognise the movement's autonomy and that its ethos—community involvement, the role of volunteers, its mutuality—is its strength, which we wish to support. We wanted to explore how the Executive could best deploy its support and how others, such as the banks, local authorities, the local enterprise companies and the wider voluntary sector, could best contribute to the movement.
The action plan is not just about resources, although they are important. It is also about bringing people together and maximising the use of their skills and expertise. Partnership is at the heart of our approach to tackling exclusion.
Will the minister give way?
I will give way to Tommy Sheridan in a second.
This strategy is a first-class example of what can be achieved if people are prepared to sit down together and work though the issues positively and constructively.
I thank the minister for giving way.
Would the minister care to respond to a question that my local credit union asked me to raise with her? It is about partnership and bringing together the whole community—not just individuals, but the business community.
Is the Executive of a mind to change the regulations on the ability of credit unions to fundhold for organisations as well as individuals? That would allow them to attract investment from the local business community as well as savings from individuals.
As Tommy Sheridan will appreciate, those matters are reserved. However, we are in constant dialogue with the credit union movement and intend to set up a Scottish credit union partnership to implement the action plan that I am outlining and to consider other matters of mutual interest.
I thank all those involved in helping the Executive to draw up this strategy, because I appreciate their efforts. As I said, the strategy recommends that a Scottish credit union partnership be established to implement the actions set out in the plan. I hope that many members of the working group will continue to be involved through that partnership.
Success in tackling financial exclusion is essential if we are to achieve our wider aims of eliminating social exclusion. Most people need an affordable lifeline of financial services just to get by. They need to be able to pay bills and to cash cheques; they need to have a place to save; they need insurance policies; and they need to have access to affordable credit.
Too many Scots in disadvantaged communities, often those in the greatest need, do not have access to the financial services that the rest of us enjoy. As a result they are worse off: they pay more to meet their household bills; they do not have home contents insurance; and they do not save effectively.
The number of people who are excluded from financial services may not be growing, but the consequences of being outside the mainstream are getting more serious. Living in the cash economy is becoming increasingly expensive, as people have to pay more for their fuel and the price of credit can be extortionate. The context that we have to consider is that 7 per cent, or 1.5 million households, use no mainstream financial products. That means that they manage their household finances without a bank or a building society account and do not have money saved or invested. They have no pension, no mortgage and no insurance.
Figures vary across the United Kingdom, but we know that the levels of non-use are highest in Scotland, with close to 13 per cent of households having no financial products. That is twice the UK average and three times the level in the south-east of England. Non-use tends to be concentrated among certain types of household and in particular types of neighbourhood. Those people make less use of financial services for complex reasons and there is no simple or single solution. Outright refusal by banks or other institutions to do business with people in those households is relatively rare. More often, the problem is about a mismatch between potential customers' needs and the products that are on offer. The way forward lies in developing products that are appropriate to the needs of people on low incomes.
The importance of quality, independent advice and information is also critical. Earlier this week, I was pleased to be able to announce that we have been successful in securing funds of £1 million from the Treasury, matched by the private sector, to pilot a telephone debtline in Fife.
Why are credit unions so important? Credit unions not only help to deliver appropriate and accessible financial services, but train and educate their members in the wise use of money and in the management of their financial affairs. Although credit unions alone will not solve financial exclusion, the services that they offer have a critical part to play.
Credit unions are open to low-income groups and young people, and they encourage saving. They provide low-cost credit, which is a very useful alternative to the high-cost services that too many people are forced to use. In the long term, they can offer a bridge to other financial services. I was reminded of that when I visited North Edinburgh Credit Union earlier this week, accompanied by Helen Liddell, who is another long-time supporter of credit unions.
A £500 loan from a credit union attracts £30 of interest. The same loan from a bank will cost £110 and from the Provident it will cost £279. That is a stark illustration.
There is potential for credit unions to offer many more services, such as debt redemption services, business start-up loans and bill-paying services. That is possible where they are run as professional financial service providers. It does not mean that they have to lose their community spirit or their democracy.
However, membership needs to grow. Currently, there are 120,000 members in Scotland. That is just 1 per cent of the population. It is higher than the figure for England, but paltry in comparison with Ireland, where 48 per cent of the population are members.
The issue is not about making all credit unions big, which is simply not possible in many areas of Scotland—especially where rural population densities are low; it is about ensuring that as many people as possible within a common bond are engaged. That enhances the impact at the local level.
The credit union movement faces challenges such as new legislative changes and Financial Services Authority requirements, which are causing concern. Legislation and the regulatory framework are reserved matters, but there is much that we can do in Scotland to ensure that credit unions are in a position to flourish. That is the focus of the action plan.
The action plan centres around five objectives: developing sustainable credit unions; helping credit unions to meet the new regulatory framework; growing the movement in Scotland; increasing the number and skills of volunteers; and bringing about a change in public attitude to credit unions by promoting the ethos and their services to the wider population to remove the tag of the poor man's bank.
The working group has not only identified where action is required but prioritised areas for action and funding. Those areas are: stabilising current activity so that we have a firm base from which the movement can grow; concentrating support in the critical early stages when credit unions are getting going; supporting and developing the skills of volunteers, and increasing their numbers; and taking advantage of information technology. We have allocated £1.5 million over the next three years to run a health-check programme to ensure that as many credit unions as possible are able to comply with the new regulatory framework. The funds will also be used to provide an early support package to new credit unions, enabling them to get off the ground quickly and achieve the critical mass that will make them self-sustaining.
Recognising the unique volunteer control of credit unions and the important role that volunteers play, we will make additional funding available to look at specific initiatives. There are many and varied examples of successful credit unions right around Scotland. I hope that our new strategic approach to developing and supporting credit unions will help to ensure that successful sustainable financial services are available throughout Scotland to everyone who wants them.
Will the minister give way?
The minister is on her last remarks.
In conclusion, our vision is for a vibrant and self-sustaining credit union movement in Scotland that is accessible to all and used by all. It must be based on the principles of mutuality and economic justice.
I move,
That the Parliament recognises that credit unions are a valuable provider of low cost financial services and an important way of tackling financial exclusion; welcomes the Action Plan for the credit union movement in Scotland, and supports its implementation and the objective of building a vibrant self-sustaining credit union movement in Scotland, accessible to all, with credit unions as broad based, community owned financial institutions operating in a sound commercial manner but based on the principles of mutuality and economic justice.
I hope that I will not receive too many groans when I say, "credit where credit is due". The minister knows that the SNP—and I in particular—are not backwards in coming forwards when we have things to criticise, whether it be wholesale stock transfer or the extension of the right to buy, but I hope that she also recognises that when we see initiatives that we welcome, we give credit where it is due. We gave credit to the Executive on its domestic abuse strategy and I welcome the action plan and the funding that has been announced this week.
I would like to pay tribute to the members of the many credit unions for the time and dedication that their work demands. It is important that this Parliament supports that work. A good friend of mine was involved in the creation of the Gorgie/Dalry Credit Union in Edinburgh. I went through the birth pains with her so I understand the perseverance, the time and the patience that it took to set the credit union up. I have also recently visited Blackburn Seafield and District Credit Union in West Lothian. I pay tribute to the sterling work that it does. An issue that has arisen in its work is the continuing development, training and support that is required. The action plan has recognised that such issues have to be tackled.
In the Parliament, a number of debates and inquiries have pointed to the need for community-based cheap credit facilities. Time and again, we have come back to the fact that there are real money problems in Scotland. Only last month, the subject that I chose for a member's debate was debt awareness. Robert Brown has raised the issue of homelessness. Yesterday, we perhaps did not spend long enough on the point that he has been arguing on the need for independent advice on money matters. I am sure that we will come back to such issues.
Cathie Craigie's Mortgage Rights (Scotland) Bill has also raised the money problems that people experience. The minister has mentioned fuel poverty. We can address all those issues. Credit unions will not solve all the problems, but again and again in evidence we hear that credit unions can often be a solution that allows people to get on a firm financial footing.
In debates during the passage of the Abolition of Poindings and Warrant Sales Bill, we heard compelling evidence of the problems in society and of the need to ensure that we have solutions that are different from the ones that are at present on offer. For a country racked with debt, it is remarkable that the credit union movement is so underdeveloped. In Canada, each province has a central credit union that provides investment of funds, liquidity and access to payment systems. They also serve as provincial trade bodies, linking with a central credit union. Interestingly, Québec has its own separate structure which, among other things, acts as an industry self-regulator and is linked to public authorities. There are similar arrangements in Poland, and it will be interesting to see developments on such issues in the action plan.
In Australia, a service corporation for the whole country has branches in each state. It combines trade association functions and services such as liquidity management, corporate banking, treasury insurance and mortgage securitisation, and IT financial management and planning. In Ireland, the Irish League of Credit Unions is a trade association and sponsoring body for credit unions north and south of the border, and has an extremely good track record. We welcome the action plan, but it puts into perspective how far we have to go if we are to ensure that the credit unions of this country match what is available in other countries.
It would be an achievement of this Parliament and ministers if we facilitated an expansion in credit unions. However, there is a danger that this could be too much of an apple-pie debate. We need to make progress. Key questions have to be asked. The action plan was meant to address the findings of the report "Credit Unions of the Future", some of which are very pertinent. There is an issue about the role of the regulatory system and the FSA. As somebody who used to work in a business that was regulated by the FSA, I realise the importance of having financial regulation, but how will it operate on a UK basis? I do not mean to make a constitutional point, but if we are to support credit unions, how will we co-operate and ensure that what is required in Scotland is served by that UK function?
The central research unit of the Executive also raised some issues. It asked whether we need a statutory instrument similar to that which was required in Northern Ireland. It will be interesting to see what legislation may be required in Scotland. Is it possible to have a compulsory share protection scheme for members? How do we deal with the size of common bonds? Do we need to go to Westminster to get agreement on that, or can we do it here? We need to examine equal access, and IT training, equipment and software. This is a challenge for Scotland. We are one of the financial services capitals of Europe. We should be looking for support, particularly with regard to equipment.
We have to look also at local issues. Visible and affordable premises are required. One of the reasons Blackburn Seafield and District Credit Union is successful is that it has the use of local authority premises and is centrally based for those who need it.
Accessible and affordable training and support must be available and it is important that there are connections to training for union management and access to in-depth specialist support. Those services are needed. We need to find where the funding will come from and how it will work. So much is dependent upon the action plan of the Scottish credit union partnership. We do not have full details of that, but no doubt they will be forthcoming.
There are concerns about liquidity issues and regulation by the FSA. I hope that the minister will address them, because she will be familiar with the concerns expressed in the Sunday Herald about how credit unions will cope. There is the question of whether we will have different versions of credit unions, that is, version 1 and version 2. I have not worked out what that means, so I hope that we will have an explanation.
I also have concerns about local authorities being responsible for eight of the action points. Some of them are self-evident, for example with regard to education, but where will the funding come from? We need to identify how we deal with debt in this country, and how much credit unions and the strategy will be the responsibility of the joint ministerial committee on poverty. Will the minister raise that issue when she next attends the committee?
We need to look at what is happening in America. I know that Jackie Baillie and Wendy Alexander went to America. I was interested to hear about the Community Reinvestment Act. Many of the powers in that act would be reserved in this country, but I am interested in hearing the minister's comments.
I will end by paying tribute to the work of those who are involved in this field. Blackburn Seafield and District Credit Union says in its promotional leaflet:
"The Credit Union motto is ‘Not for profit Not for charity But for service'".
I hope that this Parliament, and the ministers of the Executive, can serve credit unions as well as credit unions serve the people of Scotland.
That was a perfect seven minutes.
Which is a bit different from the perfect 10.
On the basis that the Minister for Social Justice and her deputy have probably had enough excitement for one week, they will both be relieved to hear me say that I do not take great issue with the minister's speech. The Conservatives will not oppose the motion.
The minister is correct to say that credit unions play an invaluable role in poorer communities by providing finance where it would not otherwise be available. She highlighted the stark contrast with the loan repayments rates involved when dealing with banks and building societies. She might also with advantage have dealt with the effects on individuals who fall under the pernicious and malevolent clutches of moneylenders and illegal loan sharks. That is an aspect that we might consider from another direction.
The Conservatives support the principles on which good credit unions are founded. We also recognise that they are not banks and are not intended to be banks. We pay tribute once again to the voluntary effort that has made many such bodies successful.
I took some of the minister's remarks quite tongue-in-cheek when she said that she had no wish to interfere with that voluntary aspect. If I find her remarks less than reassuring it is because her track record of wishing to interfere with what people do is fairly considerable. To some extent, she should butt out and learn that success is a result of the input of people on the ground. There are many instances of people working together and achieving a common goal.
It is astonishing that Bill Aitken should suggest that I would interfere. I remind him that the action plan is owned not only by the Executive, but by the credit union movement, which drew it up and agreed its terms. I wonder whether the member wants to retract his statement about me interfering.
Not for a moment, because, knowing the minister as I do, I think that she may have unduly influenced the credit unions to produce the recommendations.
Anyway, back to the point. A not inconsiderable amount of public funding will go into the new set-up. We have no objection to that, because that injection of funding will be beneficial. However, I am somewhat intrigued that the minister and her colleague, the Secretary of State for Scotland, chose to go to North Edinburgh Credit Union to announce their plans. My understanding is that that has not been one of the more successful efforts. At one stage, it cost £211 per member to administer savings when the overall share balance was only £207 in each case. That is the fact of the matter. However, I concede that that may not be a typical case and that credit unions have value.
Time and again, the clear message is that when people are left to get on with the work, they achieve a result—without any ministerial interference. Some credit unions have run with no full-time staff but with people who worked part time. However, the more sophisticated techniques that are now needed to control anybody's money mean that staff are necessary. That always involves a cost. Part of the cost is material and part comes from independence.
I say to the minister that we take no great exception to what she said. We fully endorse the principle of credit unions, which we regard as invaluable, particularly in poorer areas. We wish them every success. The work that the minister has announced will benefit them and lead towards greater success.
Like others, I welcome the proposals. The action plan is rather better than many Government documents tend to be. It contains some serious and good points and the garbage content is much lower than that in some other documents. That is a big plus.
The action plan deals with the slight threat of the FSA's regulation of credit unions. I hope that the minister will keep a close eye on that situation with her advisers and ensure that the heavy-handed attitude of people who are used to operating at a big level is not pushed on people who operate at a lower level.
My next point is that prevention is better than cure. Recently, I received an answer from Jack McConnell to a written question about financial advice being taught in schools. If we can make our school pupils more compos about finance than many of us are and have been, that will be a great step forward.
The availability of credit is a new thing. In the past, one had to earn one's money. Someone got a sixpence, a shilling or whatever and went out and spent it. Now, credit is widely available. It is difficult to manage. At a relatively young age, people are expected to run a tenancy or whatever, but with little information. The educational side is important. I hope that the minister will liaise with the educational people to try to get that right.
As often as I can, I go round the citizens advice bureaux in central Scotland, many of which have excellent debt advisers or debt counsellors, but all of them have their funding on a very shoogly nail. I hope that the Executive can produce more consistent funding for those people, who do a vital job. They give people one-to-one advice on their debt and can help them to use credit unions.
One bureau drew to my attention the fact that some shops advertise that they will give cash for benefit cheques. Obviously, they charge. When they can be cashed for free at a post office a few doors down, there has to be a question-mark over who the people who are cashing those cheques are. Have they stolen them? Do they not intend to pay their rent using the housing benefit cheque? The people who run the shops in question seem to be aiding and abetting dishonesty, which we should look into, since that is, in a sense, part of the loan shark industry. We need to get people to use good organisations such as credit unions rather than suspect ones.
Fuel poverty causes a great deal of debt. One of the problems when the £200 winter-fuel allowance cheque arrives is that for many pensioners it goes nowhere near paying for their fuel. I have heard stories that it goes straight to loan sharks, who are using and preying on pensioners. The money goes straight to finance debt. That is why we have to ensure that there are credit unions, not just in some communities, particularly for pensioners. There is a lot to be said for using credit unions to avoid exactly the sort of trap to which Donald Gorrie refers.
Those are important issues, which I hope the minister will address. By encouraging credit unions, we will discourage those who lend in the wrong way.
My next point is that we have to pay more attention to rural areas. One or two are listed in the action plan, but on the whole credit unions are seen as urban, housing estate things. Credit unions are important in that setting, but rural credit unions could play a part in encouraging small local businesses to grow.
The action plan mentions that there have been studies in Edinburgh about banks helping credit unions. The banks could help much more. They do not like spending money on management, except at the top level, where managers get huge salaries. They do not like managing lots of small accounts. Credit unions will manage those for them efficiently. The credit unions know the local chancers and have good control of who is a good bet and who is a bad bet for lending. If we could get the banks to lend what for them are relatively small sums of money—six-figure sums—to well-established credit unions, that would be a big boost for the credit union movement. It deserves that and I hope that we will all do what we can practically to help it as well as speaking for it.
The debate is important. The way in which credit union development has been addressed shows the Parliament and the Executive at their best rather than at their worst, as we have perhaps seen on other occasions.
I am delighted to be able to speak in this debate. Shortly after I was elected to the Parliament, I lodged a couple of questions. The first was on whether the Parliament would consider using Fair Trade products in its catering facilities. I am delighted to say that there was a fairly speedy response. It is appropriate to mention that, as this is fair trade fortnight. The second question, in August 1999, was on whether the Scottish Parliamentary Corporate Body would investigate the possibility of establishing a credit union for members and staff of the Parliament. To be diplomatic, the initial response was not entirely committed to the notion. It said that there were no plans to establish a credit union for members and staff of the Parliament and that no approach had been made to indicate any interest in the idea.
People who know me will know that I am not easily put off, certainly not when it is a matter of principle. The availability of such facilities is a matter of principle. I felt that it was important to ascertain, from MSPs and their staff—and indeed from the work force of the Scottish Executive—whether people would be interested in pursuing the matter. Over time, we have had discussions with the credit union movement and have come to the conclusion that a credit union is something that we ought to pursue. There are important reasons for that. We are talking about the Parliament and the Executive creating a climate in which local credit unions can flourish.
There are two credit unions in my constituency: the Ayr Co-operative Credit Union and the Cumnock and district credit union, which is being set up. I am very supportive of that, but there is a wider role for credit unions. I restate something that I have said previously in the chamber: this is not just about debt and poor people, but about the opportunity for those of us who have slightly more finances to invest them so that they can be used for the collective good.
I have pursued the matter with other MSPs and their staff and I have the support of the Scottish Executive, the trade unions and the credit union movement. I am delighted to be able to say that, after many months of pursuing the matter, there is agreement on the way forward. We have the support of the SPCB, which has agreed to assist with the provision of payroll deductions. The Scottish Parliament information centre will give us advice on literature and information. We have the use of the Parliament's intranet to circulate information and of its meeting rooms. We also have the use of the foyer, for exhibitions to promote the work of the credit union.
In the early stages, we considered whether to set up a credit union for the Parliament in its own right or one for the Parliament and the Executive. Partnership is the name of the game everywhere these days and I am delighted to say that, after successful negotiations, Capital Credit Union has agreed to allow the Scottish Parliament and the Scottish Executive to be sponsoring employers.
I want to say a word about Capital Credit Union, because I know that there are people here from that organisation—we had a great deal of help from them. It began in 1989 as a local authority employees credit union, with about 600 members. It now has 22 sponsoring employers, including local government, the fire sector, the police, the water services, further and higher education institutions, public transport and voluntary organisations. It has more than 7,500 members and assets of more than £7 million. It has set up a charitable trust, which has awarded more than £15,000 in grants to local credit unions and individuals working in the credit union movement. It has also awarded funds to help set up a British foundation for the training and development of individuals in the credit union movement.
We have an opportunity to show, not only by words in the chamber, but by our actions, that we are actively supporting the development of the credit union movement. I thank every MSP and their staff, the people in the Scottish Executive, the Association of British Credit Unions Ltd, Capital Credit Union and everyone else who was involved in the process of securing a successful outcome. We have the opportunity to put our money where our mouth is.
I start by congratulating Cathy Jamieson on her announcement—it is an example to organisations throughout the country of what can be done.
I associate myself with two points that Cathy Jamieson made that need to be underlined. First, credit unions should be part and parcel of a wider strategy for dealing with poverty and debt management and recovery in Scotland. I see them relating to the debt recovery working party and the legislation that will, I hope, flow from that and the many other initiatives that have been taken and must still be taken in the months and years ahead.
Secondly, it is extremely important that credit unions are not seen as just a poor person's bank. There are a number of reasons for that. If we see credit unions as relating only to poor or deprived people, it stigmatises the people and the credit unions and does no one any favours. From the point of view of the financial stability, growth and development of the credit unions, it is much better to have a diverse customer base than a narrow one. That is the case for any business. I hope that credit unions will grow to such an extent that they will, in some respects, act as competitors to the retail banks that have had it too much their own way for far too long, particularly in relation to personal finance and overdraft facilities for people in lower-income groups.
We must walk before we can run, but I hope that we will see the initiative as the start of a long-term development of credit unions as a key player in the financial services sector in Scotland and in the rest of the UK. There are two or three developmental issues that we should start to think about, some of which need to be addressed sooner rather than later.
Donald Gorrie mentioned the specific problems of rural communities, particularly those in remoter areas, where it is more difficult to get the critical mass of membership that is required. I do not believe that we should just write off those communities as potential development areas for credit unions simply because they are in remote areas. We should consider the potential for creating a Highlands and Islands credit union specifically targeted at the more remote areas, where a locally based organisation is difficult to establish. We must examine the rural position, because there is no doubt at all that rural poverty in many parts of Scotland is as bad as, and in some cases worse than, urban poverty and the problems that go with it.
We must also consider the need for parallel organisation in relation to microbusinesses, small businesses and the self-employed. Very often, the communities that we are talking about could do with encouragement for indigenous small businesses that buy locally, employ locally—albeit only one or two people—and service the local market. Those are the very people who find it the most difficult to get assistance from the banking sector, not just as individuals but for their businesses. I hope that credit unions will develop so that they can act as an agency for local economic development and expansion in that way, rather than simply being a credit union for individuals dealing with individual debt.
I stress the important role of public agencies, local authorities, trade unions and other such organisations. Many of those organisations have their bank accounts with large financial institutions that are doing nothing for the local community and, in many cases, nothing for Scotland. Unity Bank, however, provides a different model. When I was running the Cumnock and Doon Valley Enterprise Trust, I tried to put together a deal whereby the local authority kept its account with Unity Bank and, in return, Unity Bank would use its funds to invest in local businesses and create local employment. It is that kind of attractive and innovative financial packaging that I would eventually like the credit unions to be capable of providing in partnership with those organisations.
Finally, I underline the important role of a central organisation. We can learn from the experience of the United States, where the role of the central organisation has been absolutely vital in developing and, in some cases, saving individual credit unions. There are three roles for the central organisation: to share best practice, to provide services and products to individual credit unions and to provide, where required, a central financial facility. If we could put that in place, it would act as a great catalyst for the growth and development of credit unions.
I will finish by doing something that I will perhaps never do again—congratulating the Executive on bringing the proposals forward.
I start by congratulating Cathy Jamieson on her announcement. I also welcome the joint statement made by Jackie Baillie and Helen Liddell on the £1.5 million action plan to expand the credit union movement in Scotland.
From the debate so far, it is clear that everyone recognises the excellent work done by credit unions. As Jackie Baillie mentioned, Government ministers, at Westminster and here, see credit unions as a significant element of their strategy for addressing the injustices of social and financial exclusion. Community-based credit unions provide affordable, manageable credit for many families and communities. Credit unions depend on the work of volunteers who are committed to the movement and to their communities. They must also be able to secure affordable local premises, which is an issue that has been raised with me.
Many people in Scotland cannot access the financial services that others take for granted. Many do not have bank accounts. The unemployed and people on low incomes often have to turn to companies such as the Provident or, worse, find themselves caught up with unscrupulous loan sharks.
It is worth pointing out that there are currently a number of adverts for companies that offer to consolidate debt and reduce monthly payments—I am sure that we have all seen them. Such arrangements, although they may seem attractive in the short term, can often cost a lot more in the long term. Also, the better-off can access discounts by paying cash for consumer goods. People living in poverty, who are on the margins, often end up paying more for such goods.
Credit unions are sometimes seen as the poor man's bank, but although they are particularly helpful for those on low incomes and in tackling exclusion, they can benefit many people and have members from a wide range of income brackets. As Jackie Baillie said, at present only 1 per cent of the population are members, but the investment by the Government should make a difference, by helping to raise the profile of credit unions and, I hope, encouraging more people to volunteer in their communities.
Kirklands Credit Union in my constituency has a number of committed volunteers who care about their community and have different skills and experience. They are concerned about some of the proposals in the consultation paper on the regulatory framework: the approved persons regime, the liquidity requirements and the capital requirements. They are also concerned that the FSA might be appointed to supervise credit unions. Many credit unions support the need for monitoring, early intervention and, if required, provision of support systems, especially in the early stages of establishment. Many also accept that there are problems in the movement that need to be addressed. However, it is felt that such problems cannot be solved by an organisation that, by its very nature, can never fully comprehend the fundamental ethos of the credit union movement. The gulf in culture between those in the FSA, who are trained to deal with profit-driven companies and international finance, and the volunteers and members of small, friendly credit unions is evident from the document on regulation.
Of particular concern to Kirklands are the liquidity requirements, which seem to mean that all credit unions will have to maintain a minimum level of liquid assets of 15 to 20 per cent of shares. That does not take into account monthly, weekly or daily fluctuations, which should surely be taken into consideration. Perhaps the credit union movement could follow the Northern Ireland model of supervision. There, I understand, the monitoring of credit unions is done by the local Registry of Friendly Societies, which has a history of providing support and of examining and helping to resolve any problems that small friendly societies and mutual organisations may have.
I will finish on a question, similar to that which Fiona Hyslop asked. Is the consultation paper a reserved matter? If it is, what input can the Executive have to ensure that the fears of Kirklands and the credit union movement can be addressed?
I am delighted to be able to declare an interest in the debate. I am a member of the Inverness Credit Union, which I joined on its launch last year. I am also delighted to have the opportunity to speak in the debate, because I am enthusiastic in my support of credit unions.
When I read in the local paper last year that a credit union was to be set up in Inverness, I wrote to it to offer any support necessary. I am pleased to say that I was able to help when Christine Gower and her team seemed to be faced with addressing endless bureaucratic problems in order to gain registration with the Registry of Friendly Societies. If anyone thinks that it is an easy process, Christine would confirm that it is complex. It should be so, to ensure that it rigorously tests the ambitions and ideas that people put forward.
The criteria included business planning, marketing, policies, procedures, financial forecasts, grant funding, approving the common bond and the business plan. It is, rightly, a complex matter to set up a credit union. In the move to the FSA, I hope that it will continue the rigorous checking and monitoring of applications, to ensure that they are fully thought through and have an established business plan.
As a member of the Inverness Credit Union, I commend Christine Gower and her team on reaching 120 members and more than £5,000 in deposits in five months. It was Christine's persistence, encouragement and motivation of the volunteers that ensured that the credit union successfully met the criteria necessary for launch and continues to grow.
Presiding Officer, I hope that you will join me in welcoming Christine Gower to the Parliament and commend her on her journey from Inverness to the Parliament in a wheelchair. [Applause.]
I welcome the key targets on page 5 of the action plan. I hope that all MSPs will join a credit union to help increase the proportion of the population who are members of a credit union from 1 per cent to 5 per cent. We are in a unique position from which to raise public awareness and understanding of credit unions.
As several members have said, including Donald Gorrie and Alex Neil, there is tremendous scope to establish credit unions in remote and rural areas where banks and post offices are closing down. Not only does the principle encourage individuals to save and help themselves; it enables them to help others, it helps communities and it helps communities to help each other.
A concern is that some existing credit unions would be likely to fail the FSA requirements. That is documented on page 8 of the action plan. I am sure that the financial commitment that has been given today will give them the support that they need to address any problems.
On page 19 of the action plan, a comment is made that there is strong feeling that the way funding has been distributed in the past could be more effective. By highlighting that, the action plan gives us an opportunity to ensure that funding is directed to maximise the potential of credit unions.
I ask the minister whether the Executive would consider using rural post offices and community councils. Those are a unique part of our rural network and it provides wonderful local access and contact. The plan mentions 100 per cent rates relief on premises. Will that also include water rates, as they can be a significant commitment in these times?
I hope that this boost to the credit unions will put paid to the perception that they are a poor man's bank. Indeed, committing to save in a credit union is an excellent way for those who can afford it to increase the size of the fund and to help others. I hope that, given Cathy Jamieson's encouragement today, every MSP will become a member of a credit union and do everything possible to encourage and support the movement.
I also welcome this significant step forward in rolling out credit unions. Most of the work of the citizens advice bureaux revolves around helping people deal with debt, which has sometimes been exacerbated by banks. Credit unions help people to save, budget, borrow at low interest and manage their money wisely. They extend financial services to people in areas where such services can be difficult to access.
In my own area, I want to hold up as an example the Strathbogie credit union. It is a groundbreaking venture as its common bond is defined by a map, which is part of its registration, and is then further defined by a list of postcodes. It covers a wide rural area including Strathdon and Strathbogie and the towns of Huntly, Inch and Alford.
Although I was not directly involved in setting up the credit union, I have watched it develop and have seen how long and hard a number of dedicated people worked to get it going. I know that they would also want me to mention the help and encouragement that they received from the Glasgow-based Scottish League of Credit Unions, to which the union is affiliated.
Although credit unions make a significant contribution to fighting social exclusion, they do much more than that. No one needs to be poor or excluded to benefit from membership of a credit union; it offers ethical financial services and a means of community co-operation for mutual benefit that retains wealth within that community.
Credit unions have developed to fit particular gaps in financial services that have not been filled by the mainstream financial sector and they are now to be brought within the regulatory scope of the FSA. On page 8, the document states:
"It was recognised earlier this year that some existing credit unions would be likely to fail to meet the FSA requirements."
Those are existing credit unions that have demonstrated their sustainability, and it bothers me that the credit union square peg might be forced into the FSA round hole at the expense of some of the credit unions' unique strengths. I seek the minister's assurance that we end up with slightly rounded pegs in slightly square holes.
Action point 2.4 on page 9 also concerns me. It says that the Scottish credit union partnership should
"Look at measures to improve the dialogue between the regulator and Scottish credit unions including the possibility of establishing an FSA office with credit union expertise in Scotland."
The Executive should promote dialogue where both sides listen.
I believe that we have better government in Scotland because our Government is in Scotland and understands the country. I urge the minister to do everything possible to ensure that the possibility of a Scottish FSA office becomes a reality, because it will be very important to have such a knowledge of Scotland to inform regulation.
As a member of the Scottish Parliamentary Corporate Body, I add its congratulations to Cathy Jamieson on helping to establish a credit union to cover people working in the Scottish Parliament. Her work—and the work of Jackie Baillie in the Scottish Executive—provides a substantial extension of facilities to people in the Parliament. Furthermore, by taking away the idea that credit unions are simply for poor people and extending the spread, it has a symbolic resonance outside this forum.
However, I want to puncture slightly the general atmosphere of congratulation in the debate. Let us compare the statistics on the spread of credit unions in Scotland with those on the operation of the Consumer Credit Association, which is the posh end of non-bank lending. There are some pretty stark contrasts. Throughout the UK, the Consumer Credit Association has 4.5 million customers, whereas credit unions have just over 300,000—that is a huge disparity. A £400 loan to be repaid to the Consumer Credit Association over 24 weeks incurs £160 of interest, whereas a similar loan from a credit union incurs just £11.62 in interest, including loan protection insurance. Trying to reverse those statistics, to encourage a greater number of people to join credit unions rather than approach the Consumer Credit Association—or other organisations that charge an even higher rate of interest—is a significant step that we need to take. We should not underestimate the amount of work that is needed to change the situation.
It is hard to argue with the principles that Jackie Baillie set out in her speech, and I endorse them. We need to develop sustainable credit unions; we need to help credit unions to meet the new regulatory framework; we need to grow the movement in Scotland; we need to carry out training to increase the skills and number of volunteers, as well as the skills of staff; and we need to change public attitudes. However, there is a long way to go before we can be satisfied with what has been done. The record of Governments trying to intervene by allocating money to encourage credit union development is not generally a happy one. Therefore, the new resource that has been allocated must be used wisely, effectively and in a targeted way.
I am fortunate, because Dalmuir Credit Union, in my constituency, has more than 6,000 active members and is the largest community credit union in the UK. It is a model organisation. It has been established for a long time and does a tremendous amount of work. Yet there are also five cheque-cashing shops in Clydebank—five shops that prey on financially vulnerable people in my constituency. I regard the growth of the credit union movement as important in changing that situation.
There are some ideas and actions that I would like the minister to consider. One of the concerns of the credit union movement is that there will be an emphasis on the provision of start-up grants rather than a focus on providing adequate capitalisation for credit unions. Anybody who has been involved in local government as long as I have knows the problems attached to start-up funding that is time-limited. Organisations become dependent on it and collapse when that funding is withdrawn. If credit unions are to achieve sustainability, they require sustainable, co-ordinated and targeted funding.
We must develop the bigger organisations as well as start up new ones, and we must consider carefully how the Scottish Executive will respond to the Goodwin report. We must examine the central finance facility and determine whether the critical mass exists in Scotland to implement the recommendations of that report in a Scottish context or whether we should look to a UK solution. That is a technical issue, but one that will become important, and credit unions would like the matter to be resolved.
There are two other issues that I would like to address. First, is it possible for credit unions to establish relationships with banks that would allow them some risk capital, which would enable them to engage in cheque cashing in direct competition with the cheque-cashing agencies? How we can achieve that will have to be negotiated with Westminster, as it will require changes in financial operations. However, that is an important requirement if credit unions are to develop.
Secondly, if one of our major impulses is to establish community businesses, developing the economic inclusion agenda alongside the social inclusion agenda, why cannot credit unions invest in local community businesses? I understand that they are prevented from doing so at present.
Those are the kinds of things that would allow a community-based finance system to operate. We cannot view credit unions in isolation as small organisations that we spawn across Scotland because, in a vague way, we think that they are a good idea and we agree with the principles. If they are to be effective in the war against social exclusion and economic exclusion, they have to become part of a co-ordinated strategy. They have to be seen to be organisations that are freed up to do the job that we want them to do and which many of them want to take on.
This is an important debate. While congratulating the minister on setting out the principles, I want to press her to take further action. I warn members about complacency in this area, as there is a huge amount to be done.
I am happy to enter into the consensus and broad unanimity that exist today. I have listened to points about credit unions being a poor man's bank; I think that the direction in which we want credit unions to go is correct. Our aspirations for credit unions are laudable and admirable. There is an initial need for credit unions to exist in many areas. The analogy that I would use in relation to many areas is not the choice between shopping at Jenner's and shopping at Kwik Save, but the choice between shopping at Kwik Save and not shopping at all. We want credit unions to evolve, but, in many areas, we simply need them to exist.
I am happy to support the cause not only because of what credit unions can do but because of what they can stop happening. The lack of credit is a significant problem in far too many areas of Scotland, particularly in peripheral housing schemes where there is no access to cash, finance or even a crisis loan at a time of need.
The minister has made correct points about the cost of cash. One of the travesties that we face in the 21st century is that, even as the price of power comes down, the poor are paying more, pro rata, for power because those of us who can pay our power bills by direct debit pay less while those who live in the cash economy pay more. There is something manifestly wrong with that.
We live in a consumer-oriented society in which the mass media exert significant pressures on individuals to buy and acquire even if they cannot afford it. I do not know what the statistics show, and we will probably never be able to find out, but I bet that there is an increase in the number of people going to loan sharks in the period before Christmas when they want to buy presents that they could not otherwise afford, in order to meet what they perceive to be the needs or wants of their children. We have to address that.
I also want to address the point made by Donald Gorrie. He mentioned the advertising of ways out of debt. I am appalled by many of the television advertisements that advertise ways of consolidating one's debts. Organisations that provide that service not only compound the debt but often end up removing people's houses from over their heads. People are suckered into a scheme that massively increases their debt and leaves them with no home. Besides, such a service might not benefit many people in Easterhouse who may not have the ability to obtain such a loan as they do not have the heritable security to go with it. It is important that we address that.
What is important about credit unions is that banks will not provide the service that credit unions do. There is no commercial return. I endorse what Donald Gorrie said: banks should do more to help. I know of instances in which banks have been prepared to put in cash support to assist credit unions. There is no immediate commercial return for banks, but it might be in their interest to encourage people who are prepared to set up credit unions. Indeed, at a time when we are trying to encourage banks to keep branches open in rural areas, we would be shouting into the wind if we tried to encourage banks to open more branches in other areas.
Credit unions can stop loan sharks. During the debate on warrant sales, it was suggested that, if we abolished warrant sales, we would put people into the hands of loan sharks. I never subscribed to that view and I thought that it was a nonsensical and disingenuous argument. Loan sharks take advantage of the times when people cannot get money immediately—when the pay packet has been lost, when there has been a bereavement and so on. In rural Scotland and in peripheral housing schemes, people often have no access to a bank, no collateral and no heritable security. They are left with no alternative but to go to the person down the road whom they know, and who can give them money there and then. In such cases, the problems grow and are compounded.
I view credit unions as laudable, but we need to address the direction in which they are going. What credit unions can do is important. During my career in politics, I have noted that it is very difficult for unemployed people, when they are in receipt of no salary and are claiming housing benefit directly, to be made to believe by politicians that society cares. Someone who is living in a damp house and who is unemployed cannot withhold their labour or their rent. Society has, to all intents and purposes, forsaken them.
One of the benefits of credit unions is empowerment—which is more than just a buzzword. It is about persuading people that, if they come together, things can change. It is people's consciousness that can be raised. Des McNulty and other members have spoken about that as being the right direction for the development of credit unions. It is not just about addressing the plight of somebody who needs cash immediately; it is about realising that, collectively—and I am someone who believes that there is such a thing as society—we can change things on a micro, as well as on a macro, scale. That is why we have to support the motion.
We cannot simply replicate practice in Ireland here. We have different needs, which need to be taken into account. The Executive's intention is laudable, and the support of the Parliament for the motion shows what can be achieved. I can only hope that credit unions go from strength to strength.
I had not originally intended to join in the debate, but I felt that I wanted to add some people power. I believe in empowerment. I have been involved in setting up credit unions. Credit unions exist in places where people feel that they want to take some control in their communities, often where there is no local bank—and where it costs a bus fare to get down to the nearest bank—or to assist people who will not get a loan because they are on benefit or a low wage.
Sometimes, the loans are small. A woman told me that she had obtained a £50 loan because her sister was coming to visit her from Australia, and she wanted to paint the house and so on. What bank manager would entertain a woman on benefit coming through the door and saying, "I want £50 to go to B & Q to buy paint"? The possibility of being given that loan was important to her.
Perhaps credit unions have the wrong name. They are not just about credit; they encourage people to save. The same woman told me that her loan repayment included the allocation of an extra £5 a month into her savings. At the end of the period, not only would her loan be paid, but she would have some saved money in her hand. What bank would give her that opportunity?
Local credit unions need support. They cannot be parachuted in because the Government or politicians such as us think that they are a good idea. They work because of people power. They need support. It can take some time, sometimes as long as two years, to set up a credit union. People need to learn the appropriate skills to run a credit union. People need the support, tools and premises to ensure that credit unions work. This is not just about giving someone a big cheque; it is about support. Credit unions might often benefit from the employment of a local worker, helping them develop. The skills that are required have to be recognised; developing a credit union involves much people development.
Credit unions are an important part of the social economy, which I hope we can start to consider. In that, I include food co-operatives; let systems, under which people can trade their skills rather than money; growth schemes; and the whole development of community business, when people have power in their own communities.
We should look to other countries when we consider how credit unions have developed, on both small and larger scales. I include countries such as Ireland, as well as India, where women work together to produce garments, which they sell through co-operatives.
We need to consider how we can support credit unions, as I said. The debate is long overdue. For many years, people have been looking for recognition of credit unions. As I also said before, we cannot simply parachute them in. It is a matter of sustainability. The only way in which they can be sustainable is if local people are involved in them, are members of them, learn to operate them and are the key people in making them work. I welcome this development, and look forward to joining the Scottish Parliament credit union.
This has been an unusual debate in some ways. The Minister for Social Justice will need a reality check after all the laudatory stuff that has come from across the chamber.
I was intrigued by Mary Scanlon's concept of the growth of credit unions from 1 per cent to 5 per cent of the population as a result of MSPs' joining them. I know that we have argued for the retention of the current number of MSPs, but that is a new concept altogether of the number of MSPs. [Interruption.]
The member whose mobile phone or pager is ringing should switch it off.
My arithmetic is not so bad that I think that 129 MSPs will increase the membership of credit unions from 1 per cent of the population to 5 per cent. Does Robert Brown agree that we are in a unique position to raise awareness about, publicise, help to market, support and motivate the credit unions, as outlined in the action plan?
Absolutely. My comment was made with tongue in cheek. I entirely accept Mary Scanlon's point that the Parliament has the opportunity to do something in this area in its leadership role.
The central point is that credit unions are major instruments of empowerment in Scotland. I take the point that they are not restricted to poor areas, but they have a particular role in areas where there is economic deprivation.
There is a long history, particularly in Scotland, of co-operative activity to harness the small economic power of ordinary individuals, to unite it into the bigger economic power of the group or community and to make it something that is greater than the sum of its parts. That was the basis of the co-operative movement, building societies and trade unions. It is clearly also the basis of credit unions. Credit unions have a bigger role than they have managed to play so far in Scotland.
In January, there were 138 credit unions registered across Scotland, which were staffed by about 1,600 volunteers and a few paid staff. As has been said, they are often the only realistic alternative to shark moneylenders or organisations such as the Provident. It is important to recollect the wider range of benefits that they offer their members and their role in widening social and economic opportunities.
The action plan recognises the dilemmas that are faced by credit unions and the handicaps of limited membership, which leads to limited funds, the inadequacy of premises, and the volunteer resources that are available. Cathy Jamieson made a good point about training.
The target of a minimum membership of 2,500 is valid but extremely difficult to achieve against the background of those problems. Credit unions find it difficult to make the leap from small-scale voluntary groups with mainly voluntary staff to more substantial organisations employing professional staff as well as volunteers. I think that Des McNulty pointed out the importance not just of getting started but of support for such funding.
In growing the credit union movement, having a high street presence is important. People should be visible on the ground and a presence in communities. There are also issues of confidentiality and security. We are dealing with financial issues, and matters arise from that aspect.
Nora Radcliffe touched on the issue of a regional FSA. Several members have mentioned the problems that might emerge from the regulations that are being introduced in the middle of 2002. That is something to watch. We clearly need to tighten up the regulations, but we have to be careful not to throw the baby out with the bathwater by getting the balance wrong. What may apply to smaller groups may not apply to larger ones.
At the end of the day, the objective is credit unions that are financially viable and sustainable in the long term. That is what the chamber supports.
In what has been a fairly hostile environment in the Parliament today, I should start by establishing my credentials for being involved in the debate. When I was a councillor on Stirling Council, I was actively involved in social and economic issues on behalf of my party. We had a great opportunity to see the work of credit unions, which were quite successful and had a minimum of input and not much interference from the centre—an issue that was referred to earlier. I was also a director of a friendly society, which was a trading and distribution organisation for pharmacists, so I come to the debate understanding the legal responsibilities that are involved.
We are talking today about an established set of Conservative principles: self-reliance, community support and saving for the future. We have always encouraged people to do that. If I may touch on the politics of credit unions, Presiding Officer, it is unfortunate that, under the past four years of the Labour Government, the savings ratio has dropped from 10.6 per cent to 3 per cent. Everyone is aware of our tax pledge to remove income tax from low earners—that is, those who are not on higher rates. However, we would like to take up the issue of credits for those who may have some investment allowance and who do not pay income tax. Gordon Brown took action on that issue, albeit in the wrong direction. We would like to remove those people from the tax system, so that they could get back their credit. I hope that the minister would welcome such an initiative.
Many members spoke about rural communities, about which I am very concerned. I live in a rural community and have done so for most of my life, one way or another. Cathy Peattie talked about access to premises. That is fine for people who, as Kenny MacAskill said, live on a housing scheme where there is a community house or other premises that are supported by rates. However, such premises are not always available in rural areas. I make a plea to the minister that she work with her colleague, Wendy Alexander, in examining ways in which to support rural post offices.
We have pledged to help support single, stand-alone businesses in rural communities. A scheme of sorts is under way at present; I hope that that scheme is being encouraged and that links with the credit unions are established. People often go to the post office to collect their pensions and benefits, although some benefits now come through the post, which has a damaging influence on post offices. However, I make a plea for the activities of credit unions and post offices to be interrelated. We must examine carefully how we support credit unions in rural areas and how we can disseminate their activities.
I welcome the comments made about community councils, but, strictly speaking, credit unions do not fall within their remit. When the minister spoke about £1.5 million over three years, I noticed that she failed to mention the £800,000 a year that credit unions receive from local authorities, be it in kind, in premises or in staff support, which is an essential part of the process of community regeneration.
I was interested in some of the comments made during the debate about community businesses. When I was a councillor, I was involved in a community buy-out of a post office/shop—the co-operative society helped with the purchasing. We can be creative, particularly in rural areas.
The Parliament must deal with loan sharks and cheque shops, which are a growing menace to society, in towns and in rural areas. Other than that, I congratulate the minister.
I noticed that a couple of members declared interests during the debate. I have three interests to declare in relation to credit unions.
First, I am a former member of a credit union that I joined when I worked in Clydebank and which, sadly, I had to leave. It has been a great sadness to me that I have been unable to join a credit union where I now live. I am delighted by Cathy Jamieson's announcement, as I will again be able to become a member of a credit union.
Secondly, on volunteers day last year, when we all did our bit, I spent the day with East Kilbride Credit Union. The volunteers there work really hard, but I got totally confused when I was counting up the money and was sent to make the tea. Perhaps that is a mark of the adaptability of politicians.
Thirdly, I have been sitting on tenterhooks, as I was sure that someone—Des McNulty, perhaps, as he mentioned Dalmuir Credit Union—would bring up my third interest. During the mid-1980s, I was in the promotional video for Dalmuir Credit Union, playing the part of a Dalmuir lady who was deeply in debt. I was almost certain that someone would haul out that video and start to show it, and I am terribly glad that Des McNulty did not do so. My colleague—and friend, up until that point—Fiona Hyslop said that I should not worry, as that was so long ago that no one would recognise me.
Now that I have made all those declarations of interest, I would like to state that I am a long-time supporter of credit unions, as is the SNP. Our position has always been clear: credit unions have a valuable part to play in the development of small-banking services for people in the community whose income is too modest to be of any interest to the clearing banks and building societies. As other SNP members have said, we welcome the action plan and look forward to it being enacted.
However, it would seem that much of the action in the action plan is to be undertaken by local authorities, sometimes in conjunction with the new Scottish credit union partnership that is to be set up as part of the plan. Local authorities seem to have been given a role in areas including feasibility studies, monitoring and supervision, premises—some of which are already supplied by local authorities—membership promotion and development of teaching materials. Are those areas being funded out of the funding package that has been announced? Will on-going funding be fed through to local authorities for that work? When will the new SCUP report back and how will it report to members on its progress? I am sure that all members would like to see the development of credit unions progress quickly.
I mentioned earlier my sadness on having to leave the Clydebank credit union. That sadness resulted from the common bond and affinity that people need to have to become a credit union member. Although mutuality is important—indeed it is everything—I am concerned about how the need for it can exclude people. I live in a small town, which is just outside East Kilbride, and even though it is in the same constituency, I cannot become a member of East Kilbride Credit Union. Will the new action group look at ways to try to widen access to and accessibility of credit unions?
Members mentioned that, along with the issue of rural credit unions and how it is sometimes difficult to achieve a common bond. I would like to see a lot of discussion around how to encourage people to take part in credit unions. If that involves looking at affinity and common bonds, we will have to try to come up with a way that maintains the preciousness of where the movement started.
The minister mentioned volunteers. All members should pay tribute to the amount of work done by the volunteers who help to run credit unions; I am not nearly as cynical about that as is Bill Aitken.
One thing, however, that the minister said bothered me a wee bit—well, it did not really bother me a wee bit. She said that there can still be private money coming into credit unions and community participation. Sometimes when private money starts to come in, all of a sudden there is a regulation requiring financial bods on the management committee. I have seen that happen in housing associations. I believe and hope that that will not be put forward by the new grouping.
I am aware that we are running out of time, so I will wind up with a final worry about the FSA. Many credit unions are concerned about possible additional costs in 2002 when they have to affiliate to the FSA. Will the minister let us know what is being done to alleviate their worries?
What the Executive has come up with is great, and the speed with which it has come up with the proposals is much to be admired. I hope that it will be as speedy in advancing the credit union movement in Parliament.
It has been quite an afternoon. I am disappointed that more members did not hear the debate. If they had been in the chamber, they would have heard Kenny MacAskill and Alex Neil congratulating the Executive on its work in very positive terms. I will cherish those comments. I accept that they were made in the context of a specific issue, but it was worth hearing them nonetheless.
For us warriors of the Labour movement, it was interesting to hear the Trotskyist MSP ask us to facilitate more involvement from the business community. It is interesting how life develops.
This has been an extremely interesting debate, which reflects the concerns of all those in Parliament about financial inclusion—[Interruption.] I will try to speak over my colleagues.
Order.
Thank you.
It is clear that many MSPs have great involvement in their communities. They know the detail of the credit unions and have raised many detailed issues. That is a credit to the Parliament and to the work of those MSPs.
We recognise that we must promote financial inclusion, because doing so is critical to achieving social justice. We must increase the choice of financial services to meet the needs of people on low incomes. Many members have articulated that point very well this afternoon.
How will the minister act on Alex Neil's suggestion that the magnificent facility of credit unions be extended to remote and underpopulated places such as those in the Highlands and Islands?
I promise that I will come to that point. I intend to talk about rural areas and the point that Alex Neil made.
The support that members have given to credit unions and the respect that they have shown for them are very important. That will have a knock-on effect on the work that is being done in local communities. In my constituency, remarkable work is being done by people in Easterhouse and Baillieston in particular. They make a significant contribution.
As Kenny MacAskill said—very well, if I may say so, to return his compliment—it is important that we enable people to save so that they can avoid having to borrow from high-cost lenders and, in particular, from the worst loan sharks.
Credit unions foster inclusion. Membership of them appeals to a broad range of people. They also attract volunteers. However, we appreciate the concerns of many people in the movement and that is why we have proposed the health check through the FSA.
If I do not respond now to all the detailed remarks that members have made, I will be happy to respond in writing. Members will probably not be able to hear what I say anyway, because of all the noise.
Changes in regulations and legislation are important, but so too is the increased interest in credit unions from local authorities and Government. I say to Linda Fabiani in particular that the Convention of Scottish Local Authorities was included in the working group. It represented the interests of local authorities and said that it was comfortable with that responsibility—[Interruption.]
Order. There are far too many conversations going on. It is most unfair to the minister, who is winding up the debate. Please, let us pay attention.
I want to reinforce what Jackie Baillie said. Our efforts are made in good part. David Davidson spoiled the party somewhat, as we tried to emphasise the consensual approach. The only negative point that I will make is this: people cannot have it both ways. We are getting criticised because we do not intervene enough, then criticised because we intervene too much. People need to take a more balanced approach. We want to provide support and encouragement, but we acknowledge the autonomy of the movement and we do not want to take it over.
We also recognise that organisations such as credit unions help to develop a stronger sense of community. They provide the glue for strong and inclusive communities. The action plan is an opportunity and we hope that it will be seen as such. The Executive has committed new resources—more than £1.5 million—and that will enable more to be levered in, especially from European funds. That represents a new impetus to growth in the recruitment of members and volunteers.
Cathy Jamieson mentioned partnership. That will be important in driving forward the agenda and monitoring progress. I join others in welcoming Cathy's announcement and congratulate her on the negotiations that have resulted in the common bond of Capital Credit Union being extended to Parliament and the Executive.
I welcome the idea of the Parliament getting involved in a credit union. May I suggest that we establish contacts with Glasgow City Council, which for some years has run a successful credit union? It is a large organisation and has members who are on differing salaries.
It is a shame that John Young was not here for the debate; if he had been, things would have been clarified for him and he would know that we talked about dealing with Capital Credit Union.
As Cathy Jamieson said, we can now put our money where our mouth is. I advise everyone in the chamber to join as soon as possible. Let us send out a clear message: credit unions are for everyone—even MSPs. They are not the poor person's bank.
I want to respond to the points that were made about rural credit unions. We want to support the development of credit unions as much as possible. We are committed to addressing the particular needs of rural credit unions and, as part of our action plan, we will support a volunteering initiative that is specifically targeted at rural needs. We understand the points that have been made about the Highlands and Islands. Big is not always beautiful and we want to support small credit unions as well.
Our work over the past 18 months on financial inclusion is beginning to come together. Last month, we debated the problem of indebtedness in Fiona Hyslop's members' debate. We will shortly begin piloting the plans for a national debtline to help those who find themselves in debt. We are providing new resources for additional debt advice, and we are testing new ways of delivering it.
With the action plan, we will help to build a strong credit union movement, so that access to low-cost credit and other financial services will be much more widely available, and will be provided by organisations with the ethos of self-help and mutuality that sits full square with our approach to achieving social justice by helping people to help themselves. Yet again, that demonstrates our commitment to collective social organisation to benefit Scotland.