Credit Union Expansion Project

– in the Scottish Parliament at on 19 June 2013.

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Photo of Elaine Smith Elaine Smith Labour

The final item of business today is a members’ business debate on motion S4M-06283, in the name of John Wilson, on the credit union expansion project. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the announcement that the Association of British Credit Unions Limited has been awarded a contract to deliver the £38 million Credit Union Expansion Project; understands that this investment will allow credit unions across Britain, including those across central Scotland, to achieve economies of scale, offer a wider, more advanced and more competitive range of products and services and, on a sustainable basis, offer affordable credit to consumers who might otherwise have no alternative to using high-cost lenders, and considers that the project will be of significant benefit to credit unions in Scotland by helping them to upgrade their systems.

Photo of John Wilson John Wilson Scottish National Party

I thank the members from across all the political parties who signed my motion to allow the debate to take place.

My interest in credit unions is longstanding, although it has been strengthened by virtue of the fact that I am the convener of the cross-party group on credit unions. I am glad to say that we are joined by members of the cross-party group, who are sitting in the gallery and listening with interest to the debate.

The growth of credit unions throughout Scotland is, in itself, noteworthy. There are now 108 credit unions and, since 2007, there has been a significant growth in membership of 47 per cent. That goes to show that the debate is important in many ways.

The expansion of credit unions not only highlights the vital role that they play but underlines the approach that the United Kingdom and Scottish Governments have taken in recognising that the community banking sector needs to be placed on an equal footing with its equivalents around the globe.

Although credit unions have evolved over the years, it is important to recognise, as the credit union expansion project does, that a step change is required. The Department for Work and Pensions has contracted the Association of British Credit Unions Ltd—which is more commonly known as ABCUL—to modernise credit unions, in effect, by growing them through achievable monthly growth targets and new savings products.

It is significant that the expansion project will be staged. For example, the Scottish credit unions that are currently taking part in phase 1 of the project include 1st Alliance (Ayrshire) Credit Union and Pollok Credit Union, and further credit unions will join the project on 1 August and 1 November this year.

The work that credit unions do in central Scotland can be demonstrated. They have made a real difference in communities by getting people—especially in deprived areas—to develop the savings habit. However, the report that Civitas issued at the start of the week underlined that much more work needs to be undertaken on growth. The credit union movement needs to grow because it is relatively small in comparison with the sector both in the USA, where credit unions serve a third of the country’s population, and in other countries. In the USA, many employers offer credit union membership as a condition of employment.

The potential of credit unions has been recognised by the Scottish and UK Governments, which have emphasised their role in countering the payday loan companies and many high street retailers that charge annual percentage rates that are well above the 29.9 per cent that store cards charge.

I acknowledge the good work that credit unions do in encouraging people to save and to take out affordable loans. They serve as a long-term alternative to the expensive payday loan lenders and high street retailers. It is worth saying that the Office of Fair Trading has been criticised as “ineffective” by Westminster’s Public Accounts Committee when it comes to payday loan companies, as only two such companies have had their lending licences revoked.

For many families and individuals who live on low incomes, credit unions are a cornerstone in the development of viable alternatives to financial services providers such as banks. As strong mutual businesses, credit unions can take a longer-term view, rather than the short-termist approach that traditional banks and building societies take.

Recent research by Lloyds Banking Group highlighted the problems that second-steppers are having in the mortgage market. It found that they could not move on and were trapped in their first-time-buyer home. It noted that many people are being forced to borrow from their parents—otherwise known as the bank of mum and dad—to fund their deposits. Glasgow Credit Union has recognised the problem and is offering a mortgage that is tailored specifically to second-steppers.

In its new banking strategy, the Scottish Government recognises that credit unions can compete with commercial banks in the financial services sector but, as the think tank Civitas has highlighted, there is also a need to recognise that credit unions often make a loss on loans of less than £1,000, because of the administration fees that are applied.

Although there is a need for credit unions to develop stronger levels of participation, as was agreed in the £38 million credit union expansion project, it is still vital that the ethos of credit unions and mutuality is not lost. We have seen the demise of building societies and the recent developments at the Co-operative Bank, which took on large loan debts from Britannia Building Society and is now facing the consequences of that deal. Those situations highlight a worrying fear.

I know that the regulation of financial services is a reserved matter. Although the Scottish Government can clearly play a role in developing solutions, especially with regard to legal issues, the fact that the issue is reserved has an impact on credit unions and on ensuring that they can maintain their partnership role.

I acknowledge the good work of credit unions not only in central Scotland but throughout the whole of Scotland. The fact that they are decentralised and based on mutuality means that they retain a focus that other financial services providers seem to have misplaced.

I note and welcome the high priority that the Scottish Government has placed on credit unions delivering not only alternative but mainstream financial provision to assist many low-income communities. They offer a real alternative to the multinational banking system that is currently in crisis. We have to give people, particularly those in low-income communities throughout Scotland, the opportunity not only to save but to borrow in a way that is credible and which gives them rates that they can afford and a sense of security.

We must take forward the credit unions’ case. I hope that the Scottish Government will work alongside ABCUL and others to ensure that there is real growth in Scotland’s credit union sector and that local communities can make us proud by engaging in what is a real alternative to the payday loan companies and others who make their fortunes out of the poor and those on low incomes.

Photo of Kezia Dugdale Kezia Dugdale Labour

I congratulate John Wilson on securing the debate and welcome ABCUL’s chief executive to the Parliament. I know that Mr Wilson is very committed to the credit union movement. Indeed, he chairs the cross-party group on credit unions, which will meet after the debate finishes. I draw members’ attention to my entry in the register of members’ interests, where I am listed as a Co-operative Party-sponsored MSP and a member of Capital Credit Union.

I am pleased that John Wilson’s motion refers to high-cost lenders, because I want to talk first about the payday loan industry and then about the credit unions’ ability to respond to it. Last year, the payday loan industry was worth £2.2 billion to the UK economy and companies such as Wonga have gone from operating at a loss in 2006-07 to making tens of millions of pounds of profit last year. In fact, payday loan companies are one of the UK’s fastest growing industries, which tells us everything that we need to know about the state of the economy and how hard it is for people to make ends meet at the moment. For too many families across Scotland, there really is too much month at the end of the money and it is no surprise that people end up in the arms of those companies, given their prevalence on our high streets, on our airwaves, online, in our inboxes and on our mobile phones. They are absolutely everywhere.

First and foremost, we need to cap the cost of credit. I find it perverse that credit unions can charge a maximum 26.8 per cent interest rate on loans while payday loan lenders can charge what they like, which is why companies such as Wonga can charge in excess of 4,000 per cent APR without any consequences.

Payday loan companies are in the UK only because state after state in America has kicked them out and countries such as Germany have a maximum interest rate of 40 per cent. That clearly shows that if we capped the cost of credit in this country we would very quickly be able to cut the legs from under those companies.

Credit unions can play a very important role by offering affordable and accessible alternatives to short-term loans. The best example that I can point to is probably Blantyre Credit Union, which recently made a presentation to the cross-party group. It provided a little evaluation of the product that it was able to offer, a so-called “fast 500”, which is an instant access loan of £500 that can be had on very much the same terms as a payday loan but without the extortionate interest rates. Blantyre Credit Union managed to lend out 2,900 short-term loans and was able to evidence that those loans had saved that community £500,000 of interest. That was £500,000 back into the pockets of low earners and back into the local economy through local spend.

I want to get across a clear message to the minister. When he says that there is no money to invest in credit unions, I want him to appreciate the extent to which credit unions are effectively a preventative spend and will help him further down the line.

Blantyre Credit Union is not just about saving people money; it has also transformed people’s financial habits. The same 2,900 people who borrowed from Blantyre instead of from Wonga or other such companies were able to amass £113,000 of savings between them within 12 months. That completely transformed their financial habits. Therefore, the loans not only addressed an instant, up-front financial need, but allowed those people to get a grip of their finances and think longer-term about how they could fund their lives, their families and their future.

I have met the minister on this issue before and put to him an idea of mine. I am very grateful to have the support of ABCUL for my idea, which is, namely, a loan guarantee fund that would build on the credit union expansion project and help credit unions lend to people who would not otherwise meet the affordability criteria. The minister has promised me an answer to that request by the end of June and I very much look forward to hearing it.

Once again, I congratulate John Wilson on bringing the debate to the chamber. I look forward to the rest of the debate.

The Deputy Presiding Officer:

This is a popular debate and we are unable to extend the time tonight, so I ask members to keep to their four minutes.

Photo of Sandra White Sandra White Scottish National Party

I, too, congratulate John Wilson on securing this important debate. I know how much work he has done with the credit unions. In a previous life, before becoming an MSP, I used to go to Ladywell, which is in my constituency, to ask John Wilson and others for advice on debt matters. Given that I know John Wilson from the Scottish Low Pay Unit, I am not surprised that he is pushing forward credit union issues.

I congratulate, too, ABCUL on winning the contract, which will enable credit unions throughout the country to expand, which is very important.

I admire Kezia Dugdale: her speech touched all the right issues and was delivered very well.

I ask the cabinet secretary to say in his closing speech what the Government and the Parliament can do, not just to expand credit unions—they are very good at expanding themselves, as we will certainly see with the new contract—but to make more people, both outside and here in the Parliament, aware that credit unions exist. I know that there is a credit union here, but many people do not know about the credit union system. They may think that credit unions are only for people who do not earn a sufficient amount, so it is important that we get the message across that we can all benefit from credit unions by saving and putting money in.

I want to give a wee bit of background to credit unions. I remember that my dad, many years ago, belonged to a credit union and was able to save money and get money out at reasonable rates, without being ripped off by companies such as Wonga. I always admired credit unions for being financial co-operatives, owned by their members and operating under common bond criteria. Profits are distributed to members through dividends and members have a say in how the union is run. Credit unions are grassroots operations that are for the people and benefit the people.

It is not just about saving money and being able to get money back; it is also about training. Lots of people who began as savers in credit unions wanted to get involved in the voluntary aspect and were given training by their credit union on finance, budgets and financial management. That was a great tool for them, and some of them went on to get employment as a result. I admire that aspect of credit unions very much.

Glasgow Credit Union has been mentioned already and will probably be mentioned again. It was founded in 1989 for the employees of what was then Glasgow District Council, and has expanded greatly since then. Thirty thousand people are members of Glasgow Credit Union, and this year it became the first credit union to reach £100 million in assets. That is a lot of money for a credit union—money that is helping all the people who have put money in the union, trained in it and learned from it.

Although it is called the Glasgow Credit Union, it is larger than some United Kingdom-wide building societies, which shows the greatness of credit unions. Regardless of what happens, I want to make a point about advertising credit unions: it is important that everyone is made aware of them. I also think that is rather crass of Danny Alexander to scaremonger by sending out press releases that say that credit unions would not be viable if there was a yes vote for an independent Scotland. I thank the credit union managers who turned around and said, “Sorry, that is definitely not on; we will still be here and we will still be supported.”

Photo of Neil Findlay Neil Findlay Labour

I thank John Wilson for securing the debate and for the work that he does on the cross-party group on credit unions. I offer my apologies for my absence from the group’s meeting tonight; I have to be elsewhere.

I declare an interest as a member of the Blackburn and Seafield Credit Union, an organisation that—along with the West Lothian Credit Union—does tremendous work in my area.

The motion refers to the credit union expansion project and members have rightly highlighted how the £38 million will, we hope, allow credit unions to grow, to expand, to increase membership and savings and to grant more low-interest loans, which is all excellent stuff that I fully support.

I want to speak about credit unions and welfare reform. In the past few months, the bedroom tax has gone from being a bad idea to becoming a real-life here-and-now crisis for thousands of our fellow citizens. Although that living nightmare is hugely significant, it is a mere drop in the ocean compared with what is coming, especially when universal credit, including the housing element, is paid directly to the tenant rather than to the landlord.

That will undoubtedly mean that tenants and their families who are under pressure to feed and clothe their kids might in desperation make the choice to buy food or shoes, as opposed to paying the rent. Tenants with addiction problems may, in desperation or under duress, use the money to feed their addiction rather than pay their rent. It could mean that a violent or controlling member of the family who receives the payment on behalf of the family might spend it elsewhere rather than on the housing. It will without doubt lead to major problems for a large number of tenants and their families. Having worked as a front-line housing officer, I know that that will be the case unless we act, and act now.

What can be done? A number of credit unions across the UK have been working on new products to help with budgeting for that particular client group. The main way they are doing that is through so-called jam-jar accounts—or budgeting accounts. Tenants would have an active account into which the benefit is paid and the tenant mandates the payment to the landlord, who has first call on the monthly cash payment, with any residual cash being left in the account or put on a card for the tenant to use. Some accounts would also provide a small overdraft to help with working cash. If such accounts were rolled out across the country, it could save families from crisis, prevent evictions and—I believe—quite literally save lives.

Two weeks ago I, along with representatives from the West Lothian Credit Union, met civil servants to discuss funding to help to roll out a scheme that the credit union has developed. To my astonishment and dismay, we were told that it was a good idea but that unfortunately, there was just no funding stream available to help with the project. I do not intend to shoot the messenger—those civil servants were just doing their job—but I must ask the Government what is going on. We have a simple solution that could help hundreds of thousands of our most vulnerable people across Scotland but, when it is presented with the solution, the Scottish Government appears to be ambivalent, at best. That is not good enough. We need action now because the crisis is here, now.

Today I spoke to the Association of British Credit Unions Ltd—ABCUL—which is an excellent organisation, at its Manchester head office. It tells me that it is likely to be developing new budgeting projects in partnership with credit unions over the next two years of the expansion project. But welfare reform is not two years away. Welfare reform is here, now, and by that time, people will have lost their tenancies, their families and, I fear, some will have lost their lives.

I hope that the Minister for Energy, Enterprise and Tourism will speak to the Minister for Housing and Welfare and urgently look into these matters. This is an area where Parliament can help people now, with the powers that we have. We have to act now—not in two years, or further in the future. We have to act now.

Photo of Mary Scanlon Mary Scanlon Conservative

I thank John Wilson for giving us the opportunity to welcome the announcement that ABCUL has been awarded the contract to deliver the £38 million credit union expansion project—I will check whether I have signed his motion—and I welcome the people from the credit union movement to the gallery.

That substantial sum of £38 million is being provided to a sector that has much potential to respond to the financial demands and challenges that face people today. Credit unions should be the lenders of choice—not payday loan companies. Much more needs to be done to assist the 7 million people UK-wide who currently fall into the trap of high-cost credit, many of whom are charged exorbitant rates of interest on their loans. Currently, there are about 108 credit unions in Scotland, with the highest membership rates as a percentage of the population undoubtedly being in Glasgow, as Sandra White said.

I helped Inverness Credit Union to get set up many years ago, so I understand the difficulties of getting volunteers and ensuring that they receive the training that is required in order that they comply with stringent financial rules and regulations. I also understand how a credit union’s accessibility can be an issue, as can concerns about confidentiality. I believe that there is greater scope for employers—in the private, voluntary and public sectors—to offer payroll deductions to encourage people to participate in credit unions. The Police Credit Union sets a very good example on that, as has been outlined in John Mason’s motion on the issue.

Across the UK, the penetration rate for credit unions is less than 3 per cent, whereas in Ireland it is 72 per cent. Ireland has 399 credit unions, which have a total membership of more than 3 million, and there are another 101 credit unions in Northern Ireland. Across England, Scotland and Wales, there are only 396 credit unions, which is fewer than in the Republic of Ireland. I think that the banking crisis has contributed to a willingness on the part of the public to consider alternative financial institutions, and the community-based nature of credit unions enhances their appeal, but more can be done.

As a member of the British-Irish Parliamentary Assembly, I know that John Robertson, who is the MP for Glasgow North West, recently presented a paper on the issue. He reported that many people in Glasgow who have used high-cost lenders might just as easily have approached the credit union a few doors down the street. The reasons why people do that need to be understood if credit unions are to become the preferred choice. One reason that is given for approaching the payday lender is the ease, speed and accessibility of the process. Therefore, I think that more could be done to examine the way in which credit unions offer services to make them more attractive and more accessible. The credit union expansion project money will help.

Between 2006 and 2012, £113 million was allocated to more than 100 credit unions in the UK by the DWP’s growth fund. Although the fund was successful in making relatively low-cost loans more readily available to credit union customers, the evaluation of the growth fund concluded that it was not possible for credit unions to achieve sustainability unless they could reduce their costs further by improving services, attracting more members and maximising profitable income. The £38 million project that we are debating today is an opportunity to achieve that, as are the links with the Post Office that have been suggested.

I will finish by quoting from Lord McFall’s speech on the issue in the House of Lords. He stated:

“One problem with credit unions ... is that they are seen as a poor man’s—or woman’s—bank. ... But on another level, if credit unions are to grow and become fully established as a potent force, they need to attract the full spectrum of savers”.—[Official Report, House of Lords, 13 December 2013; c 1181.]

I agree with that.

Photo of John Mason John Mason Scottish National Party

I, too, thank John Wilson for his motion.

It seems to me that, as a society, we need to move on a number of fronts: to improve the level of financial education; to reduce the level of indebtedness; and to encourage responsible, rather than irresponsible, lending.

I think that some good things are happening in financial education. Commercial lenders and credit unions are often in our schools to encourage young people to budget and to save. More widely, there has grown up a culture of borrowing that we certainly need to break. Most recently we have seen the sad state of affairs at Hearts, but we have seen that across the board, with Governments, businesses and individuals borrowing too much.

We have to say that borrowing is by no means always a bad thing if it is responsible and can be repaid. It might well be used for an unexpected crisis or for planned bigger expenditure, such as for a car or house—an asset that, we hope, will last for several years, during which time the loan can be repaid.

Sadly, however, in recent years many people have become hopelessly swamped in debt, and very often the guilty party has been the irresponsible lender. For me, that has to be the key advantage of credit unions. More than any other lenders that I am aware of, they want the best for the borrower and not just a quick profit for themselves.

It has clearly been a challenge to grow credit unions over the years. We have already heard about a few other countries that seem to have been more successful, such as Ireland and Canada, which have much higher membership figures. In 2010, Ireland had more than 3 million members out of a population of 4.5 million, which is 66 per cent membership. Canada had 10.6 million members out of a 33 million population, which is about 30 per cent. The membership rates in the economically active population are even higher, with Ireland at 75 per cent and Canada at 46 per cent. In Scotland, the figure sits at about 6 per cent, although I understand that the figure in Glasgow is about 25 per cent. A good example is the Glasgow Credit Union, which had 20,000 members in 2008 and now, I believe, has 32,000 members.

It has been argued that credit unions in this country have sometimes been seen as very close to the establishment, even though they are independent. Alternatively, as Mary Scanlon just said, they have been seen as being mainly for poorer people. In other countries, credit unions seem to be seen as much more distinct from Government and have memberships from right across society.

If that is the case, public funds might not always be the best way in which to grow credit unions. However, given that we are where we are, I agree that encouragement of credit unions through the expansion project is to be welcomed. Neil Findlay suggests that the Scottish Government should put more money into credit unions, but he needs to explain where that money is to come from, whether it is a cut in the health service or whatever.

Photo of John Mason John Mason Scottish National Party

I am sorry, but I am pushed for time.

Given the lack of confidence in the banking system, now is clearly the right time to encourage better alternatives. However, I say in passing that not all banks are bad. My constituency has one branch of the Airdrie Savings Bank, which I consider to be the traditional type of bank with a personal service that we certainly want to encourage.

A number of local credit unions are based in my constituency, but one national one that is based there is the Scottish Police Credit Union in Barrachnie, which I am delighted to have and which I visited last month. That credit union has recently launched a new product called flexiloan or revolving credit, which is a good example of a credit union coming up with a new product to challenge some of the less scrupulous lenders. The flexiloan has an APR of 9.9 per cent, which seems pretty reasonable to me.

Of course, many of us—even those on decent salaries—can face particular challenges at the end of the month, so the more alternative decent products that are available, the better. Having spoken to the Scottish Police Credit Union, I know that it is keen for other credit unions to make use of its work and to develop the products that it has invented. There is no point in reinventing the wheel.

I am happy to support the motion and I hope that we can make progress in growing the credit union movement.

Photo of Anne McTaggart Anne McTaggart Labour

I am delighted to contribute to this debate on the subject of the recently announced credit union expansion project. I congratulate John Wilson on securing time in the chamber to consider the positive effects of the project for people on low incomes. I welcome to the public gallery members from the Scottish Parliament cross-party group on credit unions and the director of the Association of British Credit Unions Ltd.

ABCUL has been awarded a contract of £38 million to modernise and grow the credit union industry to discourage reliance on non-standard forms of credit such as payday loans. That is welcome news for families on low incomes right across the UK, who have for too long been subject to the exploitative business practices of payday lenders, who charge up to 6,000 per cent interest for short-term credit. The expansion will contribute to the continued revival of community credit unions and it is expected that Scotland will benefit significantly from the investment. It will enable local credit unions to offer a greater range of products to customers, which in turn will support our local economies.

I welcome the announcement of the project and I strongly believe that the promotion of credit unions is the most effective means of discouraging vulnerable people from relying on payday loan companies at the end of each month. I am proud to support the aims of the debtbusters campaign in Glasgow, and I thank my colleague Kezia Dugdale for all the work that she has undertaken to highlight the long-term consequences of loan sharks operating in our local communities.

The debtbusters campaign has illustrated the reality that companies offering payday loans have increased their market share by more than 400 per cent in the past three years. They now represent a significant presence on our high streets in towns and cities throughout Scotland, particularly Glasgow.

It is right that action should be taken to provide an alternative to payday loan companies throughout the country, and I support the decision to promote credit unions as the natural alternative to an industry that has relied on the misfortune of families on low incomes for too long.

Furthermore, I welcome Glasgow City Council’s recent decision to establish a credit union account with an initial deposit of £10 for every first-year pupil in the city. That is a long-term strategy that will help to educate young people about how to manage finances and encourage greater uptake of the services that credit unions offer, which are no longer limited to basic bank account facilities.

Glasgow City Council’s refusal to let any of its commercial property to payday loan companies further illustrates Labour’s commitment to stopping the exploitation of vulnerable people and its determination to promote credit unions as a workable and realistic alternative on which local communities can rely.

I encourage the Scottish Government to adopt that approach and invest in the Association of British Credit Unions so that the initiative can deliver real improvements in the services that credit unions offer throughout the country.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

I welcome the debate, which John Wilson instituted. I pay tribute to him and other members of the cross-party group, which he chairs excellently. It is one of the most active cross-party groups, as I know from my previous engagement with it. I look forward to continuing that engagement and I welcome the fact that many of the non-MSP members of that group have taken the time to join us in the public gallery for this important debate.

I welcome the announcement that the Association of British Credit Unions Ltd has won the contract to deliver the DWP’s credit union expansion project. There is significant unmet demand for banking products among low-income consumers. Credit unions exist, in part, to fill that gap and do that extremely well.

We are determined to assist credit unions to do even better. All members have said that. Mary Scanlon pointed to the fact that we need to improve our act in comparison with other countries, such as Ireland. She is absolutely right. Labour members made that point, too. There is no dispute as to the objectives, which are largely shared across the parties in the Parliament. It does no harm to acknowledge that, because we hope that, as far as possible, the matter can be pursued without political emphasis.

The DWP’s aim in providing the investment of £38 million—to which, of course, Scotland contributes its share—is to help

“the sector to provide financial services for up to one million more consumers on lower incomes, and do so in a way that enables credit unions to modernise, expand and become financially sustainable.”

It should not be forgotten that the burden of responding to and complying with the regulations that apply to the financial sector is particularly onerous, exacting and demanding. That burden is imposed on all financial institutions, including credit unions. That merits careful consideration of what more can be done on regulation. Sadly, that is outwith our power.

Scottish credit unions are set to benefit from the expansion project. Two Scottish credit unions—Pollok Credit Union and 1st Alliance (Ayrshire) Credit Union, which John Wilson mentioned—are involved in the first wave of the project and a further seven have signed up for the second and third phases. That is to be welcomed.

The Scottish Government has been consistently supportive of credit unions and enjoys good relationships with their leaders and representative bodies, including ABCUL. We are determined to consider carefully the recommendations that ABCUL has made, most recently in its briefing to members, on issues such as boosting membership across a wide variety of areas in the public and private sectors. We are actively considering measures to assist to that end.

Since 2009, credit unions have benefited from significant Scottish Government investment to develop and expand their business. Thirty-two credit unions received a total of £1.3 million from the third sector enterprise fund, and the Scottish investment fund’s investment of £1 million in a partnership between Capital Credit Union and Scotwest Credit Union has enabled them to develop efficiencies as well as new products and to increase their membership.

I was pleased but not surprised to see that a distinguished leader in the credit union movement has gone on to head the Airdrie Savings Bank, which shows that credit unions should not be considered as the poor man’s banks; they are there for everyone and they provide services of a high professional standard, as all members across the chamber have acknowledged. We actively encourage credit unions to apply for business support training, such as the just enterprise programme, and we make sure that they are aware of funding programmes that are available to third sector organisations.

Kezia Dugdale and I had a cordial meeting, as she mentioned, and I was grateful to have the opportunity to engage with her. We will reply to her about the undertaking, although I must confess that I do not have the precise nature of that undertaking in front of me. I will do what I promised to do, and I welcome her engagement.

I have asked my officials to explore a number of ideas on how we can do more to support the movement, encourage more people to become members and increase awareness. As Sandra White rightly suggested, there is always more that we can do and there is no dispute or quarrel about it. We all want to do everything practical and sensible that we can, and that is what we set out to do.

Neil Findlay mentioned funding. We are establishing a new fund that will distribute £6 million between 2013 and 2015 to help to maintain, develop and grow Scotland’s enterprising third sector. That fund will be open to applications later this year and we will encourage eligible credit unions to apply.

Many members have referred to specific initiatives by credit unions and, without repeating their points, I should say that credit unions are engaged in an incredible variety of imaginative and innovative solutions.

Photo of Neil Findlay Neil Findlay Labour

I might be wrong, but I understand that, when previous third sector funds were announced, no credit unions were funded through them. That might be the problem.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

We are always happy to work in a positive way with the credit unions and I have mentioned the funding that we have provided in the past and which will be available later this year. We will always work closely with credit unions in all practical ways to assist them in every way possible.

In relation to other areas, such as debt, we work closely with the credit unions and value their advice. Just this morning, I successfully moved a motion on regulations on the debt arrangement scheme and their approval was recommended. They will extend assistance from the date of application instead of the date of approval. That will help those who suffer the iniquities of the extortionate interest rates on payday loans. I wish that we had the power to tackle that here.

I have not the time to address in full the points about welfare reform, but the Scottish Government is doing everything that it can to mitigate the effects of the reforms.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

No, I am afraid that we are running out of time and I have given way already. It is reasonable to point out to Mr Findlay that we have committed a total of £40 million to ensure that 560,000 people who were receiving council tax benefit are protected from the UK Government’s 10 per cent cut in successor arrangement funding. We are providing £9.2 million for the Scottish welfare fund. We are assisting local authorities and the third sector in various ways. I say to Mr Findlay: oh that we had the power in this Parliament to deal with these things—

Photo of Neil Findlay Neil Findlay Labour

You have got the power; that is the issue.

Photo of Fergus Ewing Fergus Ewing Scottish National Party

Mr Findlay might be raising his voice, but I think that he realises that the powers over welfare reform, the bedroom tax and the other issues that he raised are being exercised over us from the Westminster Parliament. Working with the credit unions and the excellent people who work for them all around the country, we are doing everything that we can to do what we think is right for this country. We very much look forward to the day when we can exercise decision making over all such matters in this place.

Meeting closed at 18:14.