Credit Unions

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 25th January 2001.

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Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party 12:00 am, 25th January 2001

What plans the Government have to support and promote credit unions. [145796]

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

The Government strongly support credit unions' ethos of self-help and their important work in tackling financial exclusion by offering savings and affordable loans, especially to the least well-off. The Government have been involved with a number of initiatives to help the growth of the sector, and Conservative Members would do well to take note of the fact that membership of credit unions has increased by no less than 30 per cent. since the Government came to power.

Photo of Gareth Thomas Gareth Thomas Party Chair, Co-operative Party

I am grateful to my right hon. Friend for that reply, but will he support measures to allow credit unions to offer variable dividends on some of their accounts, and to borrow from sources other than banks and other credit unions? Does he recognise that such measures, along with the early establishment of a central services organisation, are essential if credit unions are to continue to grow and to develop further?

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

I congratulate my hon. Friend on his well-known hard work, energy and advocacy for the credit union movement. I agree that a central services organisation is important. The Association of British Credit Unions is finalising its business plan, following which it will put forward its proposals. We certainly support the early instigation of that important support, which is a result of the taskforce work which the Government have backed.

On the deregulatory proposals that my hon. Friend advocates, we already have measures in the pipeline to extend the maximum repayment limits and to abolish the maximum membership limit. Yes, I support my hon. Friend when he says that we should allow credit unions to pay dividends more frequently and that they should be able to borrow from bodies other than other credit unions.