Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps she is taking to support (a) credit unions and (b) other responsible lenders.

The Government has made clear its strong support for the credit union sector, recognising the value that credit unions bring to their members in local communities across the country in providing products and affordable credit. In her Mansion House speech on 14 November, the Chancellor announced new measures to support the growth of the credit union and mutuals sector. This included publishing a call for evidence on the potential to reform common bonds for credit unions in Great Britain, asking the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to produce a report on the mutuals landscape by the end of 2025, and welcoming the establishment of an industry-led Mutual and Co-operative Business Council.

The Government recognises that credit, when provided responsibly, can be crucial for people facing unexpected expenses or managing their cash flow. Alongside continuing to engage with the banking and mutuals sector, HM Treasury is considering access to affordable credit more broadly as part of the financial inclusion strategy work announced last year.

Additionally, Community Development Finance Institutions (CDFIs) play an important role in the provision of credit to SMEs and individuals, promoting access to finance, and offering an alternative to mainstream lenders. The Government has a renewed commitment to the CDFI sector and launched the Community ENABLE Funding programme through the British Business Bank in November 2024. This has the overall purpose of increasing the supply of debt finance to smaller businesses by supporting CDFIs.