Co-operatives and Mutuality

Debate between Damian Hinds and Tom Greatrex

Thursday 30th June 2011 Westminster Hall

[Tom Greatrex]

The hon. Gentleman anticipates the point I was about to make. My experience—and that of many others involved in supporters’ trusts—has been that at a moment of crisis, when owners walk away from a club because they have lost interest, or are unable to continue because it is more challenging than they thought it would be, they leave clubs in the lurch. One thing that can be said about football clubs is that players, managers and chairmen may come and go, but the fans remain constant. They have a huge amount of concern for and emotional attachment to their clubs, and they will step in. In the past, fans have stepped in very successfully—we could all give examples of trusts that have become involved in running a club, and done it well. The hon. Gentleman’s point is right. I desire to see supporters’ trusts not only getting involved in times of crisis when no one else steps in, but also getting involved in representation and the running of the club, so that there is a direct link to the supporters and communities.

That is why I am concerned about the situation with Supporters Direct. As I know from personal experience, Supporters Direct has provided huge support in getting trusts established, and it has campaigned on some wider issues concerning the ownership of football clubs and other sporting clubs. We need such a body to help co-ordinate that work. I raised that point with the Minister for Sport and the Olympics during questions to the Department for Culture, Media and Sport a couple of weeks ago. He recognised the issue and said that talks would be taking place on Friday. I am not sure which Friday he was referring to, but there have been a couple of Fridays since then and the issue is as yet unresolved. If Supporters Direct, or an organisation of that type, does not take that role, there is the danger that supporters’ trusts that need to be developed will not get the opportunity to learn from others and proceed with development. Instead, the funding will be fragmented and, as hon. Members will be aware, it is a relatively small amount of money given the wealth that swirls around football, particularly at top level.

As I understand, part of the Premier League’s reasoning concerns comments made by the former chief executive of Supporters Direct. I know that the individual concerned regrets those comments; he has apologised fully and since resigned. I hope therefore, that that issue is not still an impediment to the continuation of Supporters Direct. I realise that that is not the Minister’s direct responsibility, but I hope that he will mention the issue to his colleagues in the Government. It is an important aspect of co-operatives and mutuals and there is a great degree of concern about it.

I also wish to raise a couple of specific issues about credit unions. The hon. Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for Islwyn spoke eloquently and passionately about the role of credit unions. I am fortunate in having a number of credit unions in my constituency, and everybody is covered by the bond for credit unions. Blantyre and South Lanarkshire credit union means that the whole of South Lanarkshire is covered, and there are a number of smaller credit unions in Rutherglen, Cambuslang and Hamilton.

On Friday I met representatives from the WHEB credit union—Whitehill, Hillhouse, Earnock and Burnbank—which operates in a small part of Hamilton in my constituency. I raised a couple of issues with them that refer back to the comments made by the hon. Member for East Hampshire, particularly in relation to the potential for credit unions in the future. The ambitious and appropriate programme for future development will do a huge amount of good to the credit union movement and to consumers, but we must be aware of the concerns felt by smaller credit unions that they do not get lost in a drive that could end up with larger credit unions effectively taking them over. I say that because WHEB credit union, for example, is tied to a specific, but quite small geographical area and has a relatively small number of members in comparison with other credit unions. WHEB is trusted in that area because it is seen by members of the community as a sound source of credit and a reliable organisation. I am slightly concerned that in the drive to develop credit unions, some of the smaller and community credit unions could be left behind. I do not want that to happen.

I have a further point, which is relevant to the Minister’s responsibilities. WHEB told me last week that one problem that happens more and more frequently is where people join the credit union and save the minimum amount needed to have access to a small loan. They then take out that small loan and almost immediately apply to become bankrupt, which they use as an opportunity to get over the repayments. I appreciate that insolvency is a devolved issue, and that accountancy and bankruptcy are devolved responsibilities in Scotland, but part of the problem I have described is because of radio adverts, for example, that say to people “We can help you get rid of your debts by you becoming bankrupt”, without explaining some of the consequences. We hear about such things more and more frequently, and we heard during earlier contributions about some of the other advertising that goes on. There are examples of people using credit unions to save enough to be able to borrow money, and they then default on their debts.

That issue was raised with me because, as I have already said, WHEB is a small, community credit union—I am sure there are many others—and it is not well placed to absorb the number of insolvencies that are taking place. I was told that there were seven such cases over the past month. That might not sound like a lot, but for a small credit union in that area it is starting to have a significant impact and causing concern. Perhaps when the Minister responds, he will address the issue of advertising for such services, which, given the way the adverts seem to suggest to people that all their problems could be over, borders on irresponsible. The effect on smaller credit unions is an unintended consequence of that.

[Damian Hinds]

I am conscious that the debate is about co-operatives and mutuals, so I do not want to draw the hon. Gentleman too much further into this area, but does he agree that part of the problem is that, these days, the route that people end up pursuing in an alleged solution to their debt problems seems to be driven far more by which advert they see first, rather than which type of solution is most appropriate to them? In some cases, it will be insolvency, but in many others it is not, regardless of the fact that the specific firm that they go to may have charges that are inappropriately high.

[Tom Greatrex]

The hon. Gentleman makes an important point. I am under no illusion that the issue is an easy one for the Government to tackle, but I wanted to reflect the concern and raise it with the Minister. I am sure that he is aware of it, but I hope that he will comment on it.

Finally, I want to reflect on the importance of mutuals and co-ops. This has so far been a very good debate, covering a wide range of issues. That highlights the wide range of co-operatives and mutual organisations that exist. They are not just an interesting historical relic, but a huge opportunity for the present and for the future. In relation to Supporters Direct, I am pleased that the coalition agreement is explicit about the positive role that can be played by supporters having ownership of football clubs on a mutual basis. However, some contributions to this debate have reflected the fact that there are a lot of warm words on this issue and we now, across the parties, want to see those transformed into action on the specific points that we have discussed. I hope that the Minister will be able to reflect on and respond to those points and give Opposition Members some comfort that the rediscovery of mutualism by a wider range of people means that there is a real, lasting and meaningful commitment to helping to develop mutual solutions to some of the issues that the country faces.