We are consulting on a major overhaul of the Consumer Credit Act 1974 to provide better safeguards for individuals taking on borrowing commitments. We are determined to tackle abuses by unscrupulous lenders head on.
Is the Minister aware that last year the citizens advice bureaux service in Scotland dealt with more than 160,000 cases involving some #70 million of debt, an increase of #10 million on the previous year? Credit unions and money advice centres also deal with several thousand similar cases each year. Given that responsibility for dealing with debt lies with both the United Kingdom and the Scottish Parliaments, does she agree that the best way to deal with that serious problem might be to draw up a joint parliamentary strategy between Westminster and Holyrood, as suggested by Citizens Advice Scotland; and will she take steps to ensure that that is done as soon as possible?
Like my hon. Friend, I am a great admirer of the work of citizens advice bureaux, and I was especially pleased to be able to speak at their annual conference in Scotland in August. In addition, my right hon. Friend the Secretary of State was a volunteer in a citizens advice bureau during a recent volunteers week. CABs do significant and valuable work on debt and with people who find themselves in debt. I agree that the Government and the Scottish Executive should look for ways in which to work together, so I am sure that my hon. Friend will be delighted to learn that the Government, the Scottish Executive and the financial sector are piloting three debt telephone helplines, one of which is in Fife, and seeking ways in which they can provide additional advice and support for those who find themselves in difficulties.
Will the Minister acknowledge the important role that LETS—local exchange trading schemes—and credit unions play in helping people not only to manage debt, but to avoid it? I am thinking in particular of the Strathbogie credit union in my constituency, which I believe covers the largest rural area of any credit union in Britain. Does she acknowledge that credit unions have a good record of protecting their customers' interests as well as giving them advice, and will she make representations to ensure that the Financial Services Authority does not regulate them in a way that creates excessive charges and means that they cannot operate effectively?
I agree about credit unions' valuable work. The credit union in the Raploch area of Stirling provides a very valuable resource. However, we have to recognise that if credit unions in Scotland are to come of age, they need robust financial regulation around them. Work is being done with the FSA and volunteers and staff at credit unions to make sure that they have a robust regime that has the confidence of both creditors and those who want to borrow.
Does my hon. Friend agree that credit unions have come of age in Scotland, and none more so than Dalmuir credit union, which now has 7,000 members? It has grown since the Secretary of State opened the new building and it lets out #4 million a year. Scotland leads the way in that, and the biggest credit union in Scotland and in Great Britain is the Scotwest credit union, with more than 16,000 members. That is truly coming of age.
My hon. Friend is correct. I know that my right hon. Friend the Secretary of State helped launch the Dalmuir credit union a few months ago. Yes, both the Government and the Scottish Executive have shown their support for credit unions. They are coming of age. All of us in the House have a duty not just to highlight the advantages of credit unions to some of our more disadvantaged areas, but to encourage people in our more advantaged areas to see the credit union as a valuable way of supporting their local communities.