Martin Rhodes

It is a pleasure to serve under your chairship, Mr Twigg. I commend my hon. Friend the Member for Cumbernauld and Kirkintilloch (Katrina Murray) for securing the debate and for her speech highlighting the importance of credit unions, both now and in the future. As financial co-operative organisations, credit unions are a force for good in many communities and workplaces. They exist to support their members, not to maximise profit. They encourage savings and provide financial education and affordable loans, all the while circulating the money within their membership communities, which are bound together through a common bond, often based on a workplace or location. More than ever, it is vital for that type of organisation to be available in communities that are currently struggling with the cost of living crisis and are vulnerable to predatory credit and debt organisations. It is the place of responsible Government to support these organisations and their efforts to promote financial inclusion, wellbeing and stability. As already mentioned, there is variety and diversity in credit unions. There are large credit unions, such as Scotwest credit union in my constituency, which is one of the largest in the UK. It has over 36,000 members and, as of September 2024, a loan book of £68.9 million. It describes its mission as being focused on broadening financial inclusion, supporting members’ financial wellbeing and security, and strengthening local communities, all while promoting environmental sustainability through responsible lending and consumption. There are also local, community-based credit unions, such as Ruchill credit union, which was set up in my constituency, and workplace and employment-based credit unions, such as the Transport credit union in my constituency. The diverse range of credit unions offers responsible lending while promoting co-operative values. That is why, as my hon. Friend the Member for Cumbernauld and Kirkintilloch mentioned, it is concerning to hear reports that the Financial Ombudsman Service, which is responsible for resolving disputes between financial institutions and their consumers, is using commercial lending rules to make legally binding judgments on credit unions. The sector has raised concerns that credit unions are now being held to the Financial Conduct Authority’s consumer credit sourcebook rules, even though they do not legally apply to credit unions. As our credit unions are already under pressure and often based in low-income communities, that weakens the legal certainty and operational viability of the sector at a time when it is more necessary than ever.