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Chamber and committees

Meeting date: Wednesday, November 9, 2016

Meeting of the Parliament 09 November 2016

Agenda: Portfolio Question Time, Ministry of Defence (Basing Reforms), Prevention and Eradication of Hate Crime and Prejudice, Business Motion, Parliamentary Bureau Motions, Decision Time, International Credit Union Day 2016, Correction


International Credit Union Day 2016

The next item of business is a members’ business debate on motion S5M-01664, in the name of Ruth Maguire, on celebrating international credit union day 2016. The debate will be concluded without any question being put.

Motion debated,

That the Parliament recognises that 20 October 2016 is International Credit Union Day; understands that the event, which has taken place every year since 1948, commemorates the credit union movement’s impact and achievements and aims to raise awareness of what credit unions do; notes what it sees as the important role that is played by these not-for-profit financial cooperatives in providing effective and affordable financial services for over 217 million members in 105 countries; considers that they are a force for positive economic and social change and that they empower people and communities and encourage entrepreneurship; acknowledges the reported strong increase in membership in Scotland over recent years, with the latest figures suggesting that they have 383,000 members, which includes a marked increase in junior members, and welcomes the manifesto commitments of all parties to strengthening and growing the role played by credit unions in providing financial services in Cunninghame South and Scotland.


I begin by thanking all the members who signed my motion, which has allowed the debate to take place, and all those who have stayed to take part.

The role of credit unions in reducing poverty and the impact of financial worries is well recognised and has been described in reports by organisations from the Joseph Rowntree Foundation to the Social Market Foundation. I am proud to mark international credit union day 2016, which took place on 20 October, with this members’ business debate in our Scottish Parliament. International credit union day has, since 1948, been celebrated worldwide on the third Thursday of October, and it exists to mark the achievements of the credit union movement to date, as well as to raise awareness and support for its work today and in the future.

Owned and controlled by members, and with membership based on a common bond, credit unions are underpinned by the co-operative ethos of people helping people, and are committed to maximising the quality of service that is provided to members—not the extent of profit that is provided to shareholders.

I recently met representatives of StepChange Debt Charity, which does excellent work in my constituency of Cunninghame South and, indeed, across Scotland. They told me that they often refer clients to credit unions and are strong supporters of their ethos and work, and that they view them as being a more sustainable and sensible way for people to get credit than other sources.

As well as providing affordable loans, with fairer conditions and longer repayment terms than payday lenders, credit unions also empower communities and encourage individual entrepreneurship; indeed, they are often termed “community banks”—a description that well reflects their nature and purpose.

Credit unions provide effective and affordable services for more than 217 million members around the world. Because they are a real force for positive economic and social change, it is encouraging to note that they have a thriving presence here in Scotland. There are 103 credit unions in Scotland, with a combined membership of more than 383,000, which works out at roughly 7 per cent of the Scottish population. That is by far the highest percentage of the nations of the United Kingdom. Even more encouragingly, that current figure reflects a strong increase in membership in Scotland in recent years, and is partly the result of a marked increase in junior members.

I am also pleased to note that several Scottish credit unions have recently participated in the United Kingdom Government-funded credit union expansion project to further develop their reach and impact, and that six will now proceed to the next phase of the project, which will further develop and diversify their operating model and make them more competitive and efficient by, among other things, enabling them to take advantage of a market-leading banking app and improved digital access channels.

In Cunninghame South, the Kilwinning-based 1st Alliance (Ayrshire) Credit Union has been supporting a diverse range of savers and borrowers in the Ayrshire community since 2004. It currently has more than 3,000 members, with £2.3 million in savings and £1.9 million out on loans. I am delighted to note that 1st Alliance has recently been awarded a 5-star rating from the Fairbanking Foundation for its personal loans. I am also pleased to share with the chamber that 1st Alliance is working constructively to deal with some of the challenges that are presented by welfare reform. Its partnership working with North Ayrshire Council, South Ayrshire Council and six social landlords, in which the credit union has trusted-partner status, means that the services of the credit union can be used to help tenants who are in arrears or facing eviction. At the same time, the partnership benefits social landlords, because they are assured of receiving the rent that they are due. It also provides budgeting accounts for people who have problems managing their money, which has proven to be extremely helpful in the light of welfare reform, which has meant that payments have moved from being fortnightly to being monthly for some folk, for example.

I know that members across Scotland will be able to draw on excellent examples from the areas that they represent, and I look forward to hearing more examples of good practice in the course of this evening's debate.

I applaud the support that parties across the chamber have given to credit unions in previous sessions, and I welcome in particular the recently launched junior savers fund, which works with 10 credit unions to develop relationships with local schools. That progress is great, but there is still much to be done to make Scotland even more of a credit union nation.

It is encouraging to note, too, that the recent manifestos of every party in this chamber included a commitment to supporting and expanding the role of credit unions in Scottish society. Equally, it is good to note the substantial cross-party support that was gathered by the charter that was published by the Scottish section of the Association of British Credit Unions last year.

Among other things, the charter calls for employers to be encouraged to partner with credit unions; for people’s financial health to be improved by the encouragement of regular saving and responsible borrowing; for a stronger credit union presence to be developed in schools; and for the capacity of credit unions as providers of affordable credit in our society to be promoted and supported. I look forward to working with members across the chamber to achieve those aims during the parliamentary session.

I have finished a little ahead of time, so I will give a quick plug to the cross-party group on credit unions, which has already received good support from across Parliament. Anyone else who wishes to join would be most welcome.


I thank Ruth Maguire for securing the debate and for giving us the opportunity to celebrate international credit union day 2016, which allows us to discuss and to acknowledge the importance of the credit union movement for Scotland and the people of Scotland and to highlight the future benefits that credit unions can deliver.

Credit unions play a unique role in offering savings, loans and a range of services to their members that might not otherwise be available to them, or if they are available to them elsewhere, the credit union offers them on affordable terms.

With membership of about 380,000 in Scotland, credit unions play a leading role in their communities. As Ruth Maguire said, they are often thought of as community banks. Scotland benefits from proportionally higher credit union membership than the rest of the UK—indeed, it has the fourth-highest level in Europe.

I am pleased to say that credit unions in Scotland have benefited from measures that have been taken both in this Parliament and by the United Kingdom Government. For example, as Ruth Maguire mentioned, the UK Government announced an ambitious credit union expansion project with up to £38 million being allocated to further development of credit unions across the UK. Many credit unions in Scotland have benefited from it. The credit union expansion project was designed to identify mechanisms to reduce the cost of lending, to assist credit unions to develop new products jointly and to implement a new operating system based on the system that a number of UK banks use, thereby enabling real-time processing of payments and other transactions. Those are all very welcome developments that will widen the reach of the credit unions in Scotland.

In my region, Stirling Credit Union has been credited as being one of the most innovative and forward-thinking credit unions in Scotland. It was established in the late 1990s as a simple means for Stirling Council employees to save and to borrow at affordable levels. Since that time it has expanded, and it is now a community credit union that includes individuals who work in Stirling, Clackmannanshire and Lanarkshire. Its expansion has been very welcome in the local community, and it has recently been successful in encouraging local businesses to take up payroll-based savings schemes, which are important because it is often the case that individuals who save in that way are better savers and the money that they save helps to improve their credit rating. It can help in other areas, too—for example, when people are looking to save for a mortgage.

The Stirling Credit Union has also established a junior savers scheme, such as Ruth Maguire mentioned, which has expanded to include primary and secondary schools. Introducing schoolchildren to finance and to saving at an early stage is a very welcome step because it means that in their lives beyond school, they will be familiar with both those concepts.

I offer my congratulations to the many people across Scotland who have made credit unions a success. It is my pleasure to support the motion in the name of Ruth Maguire, and I look forward to supporting the continued leadership of the Scottish credit unions.


I thank Ruth Maguire for securing what is, I think, the annual debate on credit unions. It is very welcome. I declare an interest as a member of the Blackburn, Seafield & District Credit Union, where my mum is a volunteer.

We all understand that credit unions are a great facility that provide local and very much needed low-cost banking and financial services in our communities. Despite the best efforts of the previous Chancellor of the Exchequer to put some smaller credit unions out of business with reforms that members have mentioned, they have overcome what has been a very difficult period for some of them.

In my region, West Lothian Credit Union has just announced that it has given out £10 million in loans to the local community, which is a fantastic achievement. The Cabinet Secretary for Communities, Social Security and Equalities and I were delighted to attend its celebratory event. It and other credit unions are always innovating and trying to bring in new products, for example by going into schools. West Lothian Credit Union recently opened the cashtray savings account to help people to stop smoking. They also offer prepaid debit cards, free wills and, of course, loans at much cheaper rates of finance than the likes of Provident Personal Credit, Wonga, KwikCash and Brighthouse. That is critical.

Credit unions have more than 1.2 million members across the UK and, as has been said, more than 350,000 in Scotland. Those numbers are good, but there is so much more that we can do in respect of the untapped membership out there. Just 7 per cent of our population are members of such ethical financial co-operatives; the figure should be much higher. We need to create an atmosphere and a culture in which credit union membership is the norm. Baby accounts, children’s accounts, young savers accounts, holiday loans, white-goods loans, Christmas clubs, school clubs, mortgages and business loans are examples of products that could and should be provided and taken up by many more people, but for that to happen, we must all promote the credit union ideal and, where possible, follow up our warm words with action and—crucially—budget. Investment in credit union development is truly preventative spend, from which all of us will benefit.

I pay tribute to all credit unions across the world, and to the people in our communities who, day in and day out, provide essential lines of credit to our constituents, to our families and friends and, indeed, to ourselves.


I join others in thanking Ruth Maguire for bringing the debate to the chamber and enabling us to recognise the great contribution that credit unions make.

In celebration of the sector’s positive economic impact in financial services and social change, the theme of this year’s international credit union day was “the authentic difference”. The continual growth of Scotland’s credit union sector has led to an increase in membership. Credit unions are owned and controlled by their members. Because they are owned by their users, unlike other institutions, which are owned by stakeholders and investors, credit unions put their emphasis on providing the best possible service to their members instead of just increasing profits.

The most recent figures published by the Bank of Scotland reveal that Scottish credit unions have more than £562 million in assets, that they have given out £296 million to members in loans and that they hold £484 million in savings. Credit unions are protected by the financial services compensation scheme, which means that exactly the same protection is afforded to money that is held in a credit union as would be afforded to money that is held in a normal bank.

It is right that Scotland’s credit unions be recognised for the work that they do and their success here in Scotland and in a wider, global context. As has been said, the 100 credit unions in Scotland have a membership of more than 387,000, which represents 7 per cent of the population. The fact that that percentage is higher in Scotland than that in the rest of the UK shows that the uptake in Scotland has been positive.

In 2015, the Association of British Credit Unions Ltd accepted the outstanding membership growth award from the World Council of Credit Unions and, in February this year, the Scottish Government published a report on the work of Scottish credit unions. The report highlights the success of Lanarkshire Credit Union’s interesting savvy savers project, in which it was able to help more than 7,000 primary and secondary school pupils save more than £650,000. Savvy savers works in 74 primary schools and five secondary schools in South Lanarkshire. It employs full-time school project workers to promote education on financial responsibility, forward planning and money management in an effort to tackle poverty. That is just one example of the way in which credit unions can work with schools to increase the financial awareness of future generations.

Last year, ABCUL produced “Scotland’s Credit Union Charter”, in which it suggested changes that we, as parliamentarians, could make to help Scotland to become a credit union nation. Among the suggestions were that we could encourage

“all employers to partner with credit unions to make saving and repaying loans via payroll deduction a standard workplace benefit for people across Scotland”,

and that we could promote

“credit unions as providers of affordable credit for people from all walks of life.”

I think that those are good suggestions that we could take forward.

It is also important that we in the chamber recognise our local credit unions. In my Edinburgh East constituency, there is the Castle Credit Union, which I know has been working hard to help the community flourish. As our local credit unions grow, more money is brought into communities, and that is obviously a benefit to all of us across Scotland.


It is with great pleasure that I participate in this debate. I thank Ruth Maguire for lodging the motion and giving Parliament the opportunity to express our appreciation for and raise awareness of the credit union movement’s critical work both in Scotland and internationally.

And what a movement it is, having begun around 1852—or even in 1844, according to one analysis—with the simple idea that people could pool their money and make loans to one another along the principles of co-operative interdependence, a community-first mentality and a volunteer management structure. I note that there are now perhaps 57,480 credit unions in 105 countries around the world, and collectively they serve 217.4 million members and oversee $1.79 trillion in assets.

With that international footprint, international credit union day, which took place on 20 October, is vital not merely for reflecting on credit union history and achievements but for promoting the credit union ethos and raising awareness. It is a day to honour those who have dedicated their lives to the movement, to recognise the hard work of those who work in the credit union industry and to show appreciation for the members.

Interestingly, the first credit union day was in 1927, on the birthday of America’s apostle of thrift, Benjamin Franklin, who early credit union founders believed symbolised

“the life and teaching embodied in the spirit and purpose of credit unions.”

However, that day folded because people were too busy to celebrate.

The motion asks us to commemorate the “impact and achievements” of credit unions. Since the Credit Unions Act 1979 was passed, which gave a common regulation framework for the movement, the credit union philosophy of mutual self-help has gone from strength to strength. At the macro level, more than 1.2 million members in the UK have recognised the value of credit unions and have savings approaching £1.1 billion with them. As we have heard, there are in Scotland about 100 credit unions with a combined membership of more than 387,000 or, as has been said, about 7 per cent of the population.

I cannot really talk about Cunninghame South, as the motion requests, but I can talk about the north-east. Drilling down into the north-east region, I can say that the Angus, Tay Valley, Dundee, Grampian, North East Scotland and St Machar credit unions provide a vital service, offering easy-access savings accounts and ultimately, given the interest rate cap at 3 per cent per month on the reducing balance, a responsible alternative to the high-interest payday loan companies that can place individuals and families under a burden of debt for many years.

The largest credit union in the north-east, Grampian Credit Union, is one of the leaders in Scotland, with innovative saving schemes and loan programmes. It leads the way in the field of payroll saving schemes, with more than 30 companies and organisations including NHS Grampian, Aberdeen City Council, VSA, the University of Aberdeen and Aberdeen Foyer all signed up to its staff saving schemes. Those schemes have proved to be an easier way to save and evidence has shown that they make better savers.

It is clear to me—and, judging by the contributions from around the chamber, everyone here—that credit unions really do make “the authentic difference”. Even though we in this chamber often have authentic and deeply felt differences, I have no doubt that in supporting this motion, we, like the credit unions themselves, share a “common bond”.


I, too, welcome the opportunity to take part in this debate on international credit union day and I thank Ruth Maguire for bringing the issue to Parliament. The debate gives us the opportunity not only to celebrate credit unions’ “impact and achievements” in Scotland and worldwide but to raise awareness of their work and to encourage more people across Scotland to become members and utilise their services.

Scotland has a long history in financial services and a proud record of community spirit and co-operative ventures. The credit union movement brings both of those together. It benefits many people across our society and provides benefits to our economy.

Scotland’s credit union movement is growing. There are now more than 100 credit unions across the country with a total of 388,000 members, and they manage savings that are worth more than £400 million.

Several credit unions operate in my constituency. They operate in Easterhouse, Haghill and Dennistoun, Cranhill, and Carntyne and Riddrie. All provide local services to support people who often may not be in a position to benefit from standard banking or financial services. I am a member of Glasgow Credit Union, which is one of the largest in the country.

Scotland needs a variety of financial service offerings to ensure that all people in society can access both saving and lending services that are suitable to their needs. Credit unions offer that in complementing traditional services. They also have the great advantage of typically operating with a local focus and with ownership structures that are based on co-operative principles. That gives them resilience and a firm grounding in the communities that they serve.

New models of saving and lending are an important part of ensuring the financial health of everybody in society. That is recognised by the Joseph Rowntree Foundation, which recommends credit unions and the role that they can play in reducing poverty.

Credit unions are more than a service to borrowers and savers. A thriving and growing credit union sector in Scotland can play a major role in bringing more people actively into the economy, and building strength and resilience in areas that are too often excluded from economic activity. They provide a role in supporting entrepreneurship and the development of microbusinesses across Scotland. Our economy as a whole needs that to drive our aspirations for inclusive growth.

As the motion clearly reminds us, credit unions are an international phenomenon. One of the most famous credit unions is Grameen Bank, which was founded in Bangladesh by Muhammad Yunus, who was later awarded a Nobel peace prize for his work in establishing microcredit facilities among poor women in Bangladesh. That shows that the financial services model that credit unions use can deliver results in supporting financial independence for the most marginalised groups. I worked in Bangladesh at the time when Grameen Bank first achieved international recognition and witnessed at first hand the tremendous impact that it had on individuals and communities.

Over the years, Scottish Governments of all persuasions have provided support to help to develop the credit union sector, and all parties support taking steps to encourage its future growth.

The credit union movement in Scotland looks for support in a number of practical ways. It encourages employers to engage with the movement and to offer payroll deductions services for employees for savings and loan repayments to credit unions. It encourages schools, colleges and universities to teach about credit unions and financial management. The significant rise in young people who are becoming members of credit unions is to be welcomed. Early education in financial management and co-operative principles is a benefit to our society and our economy. The credit union movement also promotes credit unions and supports the development of their capacity to play a more substantial role in offering financial services.

By raising awareness of credit unions through such debates, we can all play our part to help to make Scotland a credit union nation.


As other members have done, I thank Ruth Maguire for bringing this members’ business debate to the Parliament to mark international credit union day. I look forward to working with her in her role as convener of the cross-party group on credit unions. I am particularly pleased to speak in the debate as a new deputy convener of that re-formed cross-party group and as a member of the Scottish Co-operative Party MSP group in the Parliament.

As all members know, credit unions are co-ops, which means, of course, that they are owned by their membership. That is a very inclusive model, which is a significant and important point. Obviously, the main emphasis will always be on providing the best service for their members, and not on profit.

I wish Lanarkshire Credit Union a happy 25th birthday. I am looking forward to attending its birthday party on Friday night to help it to celebrate all the hard work that it has done over the past 25 years. I am definitely looking forward to some cake at the party after a long week in the Parliament.

We all know about the importance of credit unions in Scotland. In difficult financial times, they help people not only to save for the future but when they are most in financial need.

Is the member aware of the wee Glasgow loan initiative, which is run by Glasgow City Council along with Pollok Credit Union and BCD Credit Union, and which offers people low-cost loans so that they are not preyed on by lenders of payday loans? Does she agree that that kind of initiative should be supported across the country?

I thank the member for that important intervention. Other members have also highlighted the issue of payday loans.
The heavy advertising of them on television seems to have diminished, but it is shocking how those lenders prey on vulnerable people.

Credit unions are truly for everyone. Whether someone joins a credit union through their work or goes to their local credit union to get a loan, they are joining the 387,000 people who are already members in some way, shape or form. It is true that many people across Scotland are only a few pay days away from being in financial trouble, and being a member of a credit union can help people to prepare for the unexpected.

At the start of the year, I was delighted to visit the newly established outreach branch of the Lanarkshire Credit Union in Carluke. Lanarkshire Credit Union worked closely with the local community council to provide a service to local people, who did not necessarily know about credit unions. By setting up an outreach branch, the credit union has enabled local people to use its facilities without the having to deal with the geographical challenges of setting up a permanent office. The credit union has had the help of volunteers—we should recognise that that is often the case with credit unions. We need to be mindful of people in rural areas where there can be geographical difficulties.

This summer I was pleased to meet Alison Dowling from the Capital Credit Union, whose common bond area covers Midlothian and the Scottish Borders, which is in the region that both the minister and I represent. Alison Dowling told me that even though there was difficulty in setting up an outreach branch in the Borders—like the one in Carluke—people in the Borders could still be members of the credit union. Things such as online banking and payroll deduction have meant that it has become easier to join a credit union.

Ash Denham and others have mentioned support for young people. To be competitive about it, I was pleased to read that growth in the number of junior savers is higher in Scotland in comparison with other parts of the UK. Ash Denham mentioned that the Lanarkshire Credit Union teaches about debt and how to manage finances in a fun way. I hope that that is happening in other parts of Scotland. The sharing of models can be invaluable, and the cross-party group on credit unions can certainly help with that. Members have brought forward a lot of exciting and valuable suggestions for future agendas.

As we have heard, the theme of this year’s international credit union day is “the authentic difference”, which celebrates the positive impact that credit unions have on financial services and social change. I truly believe that they have a lot to celebrate.


I thank Ruth Maguire for bringing this important motion to us tonight. The motion talks about commemorating the impact, which is significant, and the achievements, which I would say are many, of credit unions.

Like others, I declare an interest. I am a member of the Scottish Police Credit Union. Indeed, in the roll-out from what was formerly the Strathclyde Police Credit Union, I was the first member in the north of Scotland as we trialled the system of payroll deduction. An important way to encourage membership is to have employers play a role in deductions from salary.

The significant strength of the credit union system is the common bond, whether it is one of geography—where often credit unions play a significant role—or a bond within the workforce. I commend the work of trade unions and staff associations with employers in connection with that model.

The ethos, which as been mentioned, of people helping people is highly commendable. Not-for-profit co-operatives seem to me a very attractive basis for going about business, in that the benefits are retained and indeed shared. Ash Denham and Claudia Beamish highlighted the phrase “authentic difference”. What a significant contrast there is with the banking industry, no member of which is likely to win the fair banking award that was referred to. That once-honourable profession has been largely discredited by greed and by an ethos that is the complete reverse of that which underpins the credit union.

Credit unions are about effective and affordable financial services, and the motion details their global reach. On a day when we have all had a lot to say about the United States, it was compelling to read that US employers can offer credit union membership as a condition of employment. That is an interesting departure from what some might expect.

I am particularly interested in credit unions’ reach into our more vulnerable communities and the role of volunteers, which our colleague Neil Findlay talked about. There are a number of credit unions in my area, and the fact that they will pitch up at the local community centre at a known time is an important factor. I welcome the increasing membership of credit unions and particularly the junior membership, which a number of other speakers have mentioned. If that leads to a lifelong connection with the credit union movement, it can only be a good thing. Why is that important? It is because of the effect on young people’s attitudes to money. Savings are respected, and the lending is responsible and not exploitative.

I am particularly delighted that this is a non-party-political debate. I commend Conservative colleagues for their comments. The fact that support for credit unions is part of every party’s manifesto is significant and it shows that people recognise that they are a force for positive economic change.

Another factor that we must not lose sight of is that credit unions empower people and communities. The motion mentions

“growing the role played by credit unions”,

and they are capable of more. Historically, the credit union movement has come up against resistance from the big banks. We have heard of the excellent work that credit unions have done to counter payday loans and store cards and, importantly, encourage people not only to borrow but to save as they are borrowing.

Credit unions are a valuable and very ethical part of civic Scotland and I am grateful for the opportunity to speak about them tonight.


I declare an interest as a member of Capital Credit Union.

I, too, congratulate Ruth Maguire on securing this debate and on the re-establishment of the cross-party group in the Scottish Parliament on credit unions, which was a well-respected CPG in the previous session of Parliament.

I am really glad that the Scottish Government is giving about £200,000 of funding to support credit unions in establishing schemes in schools and helping children to understand the importance of saving and managing money. That is vital work in our communities, especially as it is often the most vulnerable people, who find it most difficult to balance their cheque book, who can get the greatest advantages from a credit union in their community.

A lot has been said about the benefits of credit unions. I thank the Association of British Credit Unions Ltd for its briefing for the debate, but I also want to talk about the smaller Scottish League of Credit Unions, which works closely with one of my local credit unions: Wishaw Credit Union. The strength of the league is that it supports community-focused credit unions whatever stage of development they are at. It recognises and respects the different needs and aspirations of individual credit unions and will not seek to impose a particular model on its members.

It has come out so much in this debate that credit unions are of their community. Some will do outreach and some will do different types of work in their community. I was really interested to hear earlier from Neil Findlay about the anti-smoking projects; he also mentioned volunteers, who are hugely important. That is another reason why it is so important for credit unions to engage with our young people. The volunteers in our credit unions are ageing, unfortunately, and we need young people to come on board and fulfil that role as well.

The Scottish League of Credit Unions concentrates on the key themes of education through group training sessions using materials that are provided to its members; advice on legislative, compliance and financial issues; networking for credit unions to come together and share good practice; facilitation where its members want to co-ordinate with each other to achieve common goals; representation at the local, Scottish and UK Government levels and in other credit union organisations; and the promotion of credit unions in our constituencies.

It is important to note that credit unions are different and they approach people differently. One in your area, Presiding Officer, which I covered previously, is East Kilbride Credit Union. On its website, it welcomes everyone and provides its vision, its mission statement and its commitment to its members.

Credit unions are now financially secure: the financial services compensation scheme is associated with them and they are covered by the Prudential Regulation Authority and the Financial Conduct Authority.

That security is important, not just because payday lenders prey on people in difficult situations. I remember the collapse of the Farepak savings scheme. Although a banking technicality meant that people who had paid into the scheme by direct debit were able to recover some of their money, many people lost money that they thought was safe. It is important that people know about the financial security of credit unions.

However, the new approach places a burden on volunteers, who have to know financial regulation and take part in modular training schemes from the Chartered Banker Institute. Members’ money is used to train volunteers, and that is a concern, because we want credit unions to continue to be sustainable and to provide a wonderful service in our communities.


I thank Ruth Maguire for lodging her motion. We have heard excellent speeches from members across the Parliament. Like John Finnie, I am delighted that the motion and the debate attracted genuine cross-party support.

Credit unions play a vital role in our economy by providing a range of ethical financial products and services to a wide range of customers, many of whom face financial exclusion. Like other members, I congratulate the people who developed the movement in Scotland. I wish Lanarkshire Credit Union a happy 25th birthday—Claudia Beamish might pass that on when she attends the birthday party.

Credit unions are part of a dynamic, growing and increasingly global movement for change, as Liam Kerr, Dean Lockhart and other members said. The World Council of Credit Unions estimates that there are approximately 60,000 member-owned, not-for-profit financial co-operatives worldwide. As Claudia Beamish said, the co-operative model operates for the benefit of members on a not-for-profit basis. That is a key and important part of the approach and ethos of credit unions.

As Ruth Maguire and other members said, Scotland has a good pedigree when it comes to this more inclusive way of doing finance. For more than 45 years, credit unions have proudly served our communities, providing members from all walks of life with more than basic financial services. As Ruth Maguire and Ivan McKee said, the Joseph Rowntree Foundation has pointed to the role of credit unions in reducing poverty.

In my new role, I have been pleasantly surprised to learn that the proportion of people who are enrolled in a credit union is significantly higher in Scotland than it is in England and Wales. According to Bank of England data, which a number of members cited, the proportion in Scotland is 7 per cent, whereas in England and Wales the comparable figures are 1.5 per cent and 2.6 per cent, respectively. The sector deserves a lot of credit for identifying and exploring need in Scotland and for its reach here.

The figures indicate that there is great potential for growth in England and Wales, too. It is important to highlight that on the occasion of a celebration of the role of credit unions world wide. As I think Neil Findlay said, there is room for further expansion.

As we heard, around 100 credit unions are operating across Scotland, with a combined membership of 387,000, assets of £560 million and aggregate lending of £296 million to members—at least, those are the figures that I have to hand. It is right that the Scottish Government is committed to working with credit unions to support and promote their important work.

That is why the Scottish Government established the credit union working group in October 2014, under the chair of Fergus Ewing, who was Minister for Business, Energy and Tourism at the time. The group included credit unions, their representative bodies, advice services and the Accountant in Bankruptcy. It considered a wide range of topics and identified two key priorities for strengthening Scotland’s credit union movement: first, to help credit unions to play a fuller role in the delivery of financial education—we heard some great examples in that regard—and secondly, to support the expansion of payroll deduction schemes as a standard workplace benefit. Ruth Maguire, Dean Lockhart and others referred to that.

On financial education, I agree with members that it is vital that children grow up with an understanding of money and saving. The junior savers schemes that credit unions run in partnership with schools are an excellent way to teach children aspects of numeracy and social studies in a real-world context, as well as helping them to develop a culture of saving and responsible borrowing.

As Claudia Beamish highlighted, it is great to see such positive growth in the number of junior savers. We believe that the schemes embed a savings ethos among pupils at a young age by holding regular collections of children’s savings in the school, often with the incentive of saving towards a school trip or another goal. By running the schemes, credit unions play a vital role in helping to educate children in money matters, often incurring a financial loss themselves. We should recognise that the role that credit unions play is not always without cost to themselves.

Delivering on the credit union working group’s recommendation to explore the development of junior saver schemes, the Scottish Government announced a new £300,000 funding scheme in March that is aimed at supporting credit unions to develop sustainable junior saver schemes in schools across Scotland. Credit unions were invited to bid for funding over the summer, and in September the Cabinet Secretary for Communities, Social Security and Equalities announced that 10 credit unions are set to receive Scottish Government funding to launch new junior saver schemes throughout the country.

Each credit union is aiming to set up at least three new junior saver schemes in its local community, and the Scottish Government will work closely with them to share learning from those schemes with the sector. Funding is also being made available to support the production of a junior savers toolkit, which is being produced by the credit union sector and Education Scotland working in partnership. The toolkit will bring together best practice, providing a useful resource for all credit unions in Scotland well beyond the life of the funding. It is hoped that it will have a legacy value. With Education Scotland as a key partner, we will ensure that the toolkit is consistent with the curriculum, helping pupils to develop a broadly based financial capability focusing on understanding competence, responsibility and enterprise, which will make the offer of junior saver schemes even more attractive to schools.

As the co-convener of the cross-party group on co-operatives, I am delighted that the minister recognises the close connection between credit unions and the co-op movement. Does he acknowledge that the world’s first recorded co-op was established in Fenwick, in my constituency, in 1761, some 83 years before the one in Rochdale? That is a continuing source of pride for my constituents in Fenwick.

Fenwick deserves a round of applause. I am delighted to acknowledge that there is such a long history of the co-operative movement in East Ayrshire, and I welcome Willie Coffey’s remarks in support of Fenwick.

Ash Denham and other members have referred to payroll deduction in the context of “the authentic difference”, and it plays an important role. The second key priority identified by the credit union working group is support for the expansion of payroll deduction schemes, which credit unions see as key to ensuring a more sustainable future. Such schemes offer a convenient way for employees to save into a credit union account directly from their salary, which, in turn, helps credit unions to build a wide and varied customer base of borrowers and long-term savers. In order to further that aim and demonstrate support for credit unions, the First Minister has written a letter, which is available for credit unions to use, that encourages employers to partner with a credit union to enjoy the benefits of payroll savings for both staff and the organisation.

The Scottish Government’s business pledge includes a recommendation that employers, under their workforce engagement commitments, should offer payroll deduction savings as a standard workplace benefit. That is yet another reason to encourage the business pledge. In addition, in the coming months, following a recommendation in the credit union working group’s report, the Scottish Government will develop a package of resources for credit unions to use when they are engaging with employers to make setting up payroll deduction schemes a smoother process for all parties. Payroll deduction schemes are an excellent way of bringing wider benefits to the workforce, and the Scottish Government believes that employees can take advantage of payroll deduction. Last month, on international credit union day, we invited our credit union partner into the Scottish Government offices to raise awareness of that important employee benefit among our staff.

John Finnie and other members have referred to the accessibility of credit unions. The debate is taking place at a time of contraction in the number of bank branches. Credit unions, which are locally based, community based or workforce based, will be able to extend the reach of financial services to those who are affected by branch closures.

The Scottish Government is committed to improving financial wellbeing and reducing income inequality to create a wealthier and fairer Scotland for all its citizens. I am delighted that we have had such a positive discussion around the role of credit unions in that capacity. Members across the chamber recognise the huge contribution that credit unions make by providing responsible and ethical financial services that strengthen the financial capability of communities and change individual lives for the better, as members have said. We will continue to support that important work and raise the profile of the credit union movement in Scotland.

Meeting closed at 17:49.