Credit Unions

Debate between Lord Clarke of Hampstead and Lord Freud

Thursday 19th July 2012 Lords Chamber

[Lord Freud]

My Lords, that is something that we need to look at closely. One of the things that we are doing in the housing demonstration projects is tying the credit unions into the direct payment structure, and that has been very helpful. As we build out that system, the role of credit unions can be used and advertised in that way. As for the £38 million, that is for the credit unions themselves to decide how to use, and we will be taking bids and working out that process over the next half year or so to find out how that money can be used most effectively.

[Lord Clarke of Hampstead]

My Lords, welcome as the consultation is, it should include something about children getting involved. In St Albans District Credit Union, in which I declare an interest, there is a nice scheme going on where youngsters come in on a Monday, give their money and get that put in their book. Establishing the pattern of saving, which is one of the key principles of credit unions, could be an advantage if people were exposed to it nice and early. Will the Minister discuss with his friends in the Department for Education the possibility of getting into schools and working with credit unions in that way?

[Lord Freud]

My Lords, something over 10% of members of credit unions are youngsters—over 100,000. That is useful and valuable for youngsters. However, I emphasise that what we are looking at now is trying to build an industry that can sustain itself. That must take priority, and that is what the money is for.

Credit Unions

Debate between Lord Clarke of Hampstead and Lord Freud

Thursday 2nd February 2012 Lords Chamber

[Lord Freud]

The proportion is disappointingly small; it is 2 per cent. That compares with a figure of 44 per cent in the United States and 75 per cent in Ireland. It is a very small industry here. Our ambition is to double its size in the next five to seven years. Nevertheless, we need to look at various other financial instruments, particularly as we introduce universal credit.

[Lord Clarke of Hampstead]

My Lords, I am sure that the House is delighted that the report that the Minister asked for is coming. Should not part of the report state that local authorities should be encouraged to help with the start-up costs of credit unions, in particular with the very high council taxes that are levied on premises? I speak with experience of a very successful credit union in St Albans of which I am a member. Start-up costs are very difficult and local authorities could play a good part in helping to create these unions.

[Lord Freud]

Yes, my Lords, credit unions are local organisations. It is very important that social units in the locality help them. Just as important as local authorities are social housing groups. There are already 20 such groups working with credit unions, which is very important.