Credit Unions

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 24 October 2011.

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Photo of Jesse Norman Jesse Norman Conservative, Hereford and South Herefordshire 2:30, 24 October 2011

What steps his Department is taking to support access to lending from credit unions.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

What steps his Department is taking to support access to lending from credit unions.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

Since 2006, the Department has spent more than £100 million through its growth fund to encourage credit unions. In addition, since March this year, a further £11.8 million has been invested. The Department is now conducting a study into how best we can support credit unions and will report shortly.

Photo of Jesse Norman Jesse Norman Conservative, Hereford and South Herefordshire

Only 2% of people in this country are members of credit unions such as the excellent Money Box in my constituency, compared with 44% of people in the United States. What role can Jobcentre Plus play in helping credit unions to reach more people?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I pay tribute to my hon. Friend for his involvement with the all-party group on credit unions and his commitment to the cause. Jobcentre Plus is keen to work closely with credit unions, and we are currently piloting a scheme in Manchester and Newcastle in which jobcentres share office space to see whether they can assist credit unions at a local level.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

I declare an interest as a member of the Staffordshire credit union. For more lending, we need more saving. What steps are the Government taking to encourage payroll saving in credit unions?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

The process of long-term saving through auto-enrolment in workplace pensions is imminent, but there has been a big growth in workplace coverage of occupational workplace individual savings accounts, which is an encouraging development. We are looking to see what more we can do to encourage that trend.

Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury)

Many who use credit unions also need help to access credit advice. What is the Minister doing to help those who will lose out when he scraps the £27 million financial inclusion fund from next March?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

One of the things we are looking at as part of our feasibility study on the future of credit unions is their crucial role in supporting people who need financial advice and assistance. That work will report back to the Department next month.

Photo of Madeleine Moon Madeleine Moon Labour, Bridgend

I declare an interest as one of the almost 3,000 members of the Bridgend Lifesavers credit union, which has loans of more than £500,000 but savings of £1 million and is keeping people out of the hands of doorstep loan sharks and the sadly growing numbers of pawnbrokers on our high streets. What can we do to ensure that people see credit unions, rather than doorstep loan sharks, as the way to save and borrow?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I welcome the hon. Lady’s endorsement of credit unions, and I am pleased to say that, last week, the House of Lords approved the legislative reform order that will pave the way for credit unions to expand. My hon. Friend Jesse Norman asked about the difference between the USA and the UK. One of those differences is that many of our credit unions are small and have not been able to stand on their own two feet and become viable. We are determined to enable them to become viable so that they can perform the functions that she set out.