HC Deb 18 July 2002 vol 389 cc418-20
11. David Wright (Telford)

If he will make a statement on the growth of the credit union movement in the United Kingdom. [68408]

The Financial Secretary to the Treasury (Ruth Kelly)

Credit unions have an important role to play in tackling financial exclusion and enhancing opportunity, through the provision of core financial services. That is why we are delivering a programme of strategic deregulation to enable credit unions to offer a greater range of services to their members, thereby helping them to develop and to grow.

David Wright

I thank my hon. Friend for her reply. Will she join me in congratulating and thanking the many thousands of people who give of their time voluntarily to support the credit union movement in the UK? Does she agree, however, that the term "credit union" is itself problematic, because for many people it implies getting into debt? Does she also agree that we should perhaps re-brand the sector, as has been done in Telford through the Fair Share credit union?

Ruth Kelly

I thank my hon. Friend for his question. I know that he takes a considerable interest in these matters, and I do of course congratulate the thousands of people who provide their services for free to help credit unions prosper. That is why we are undertaking a programme to make the whole credit union sector more attractive, to enable credit unions to offer a greater range of services to their members, and to offer greater protection to members by regulating the sector through the Financial Services Authority.

As to my hon. Friend's remark about the term "credit union", I do not share his enthusiasm for changing a brand name that is fairly well recognised not just in this country, but across the world. I would therefore hesitate before recommending to the sector that it changes the name.

Rev. Martin Smyth (Belfast, South)

I join the Minister and others in congratulating the credit union movement and those who have done so much to help their own communities. I also welcome the fact that steps have been taken to strengthen the supervision of credit unions. Am I right in thinking that that has been done not to hinder the credit unions, but to protect them in an age of creative accounting, when people often misuse money? Those measures should not be shunned, but accepted and supported.

Ruth Kelly

I completely agree with the remarks made by the hon. Gentleman. It is important for the sector itself, as well as for its members, that it is appropriately and proportionately regulated. I welcome the fact that thousands of members of credit unions, as well as the organisations themselves, took the opportunity to respond to the FSA's consultation on how that regulation should be carried out. The new framework will increase the reputation and credibility of the sector and it will also offer important investor protection to credit union members, bringing them under the same sort of protection regime as bank and building society depositors.