Good afternoon everyone, and thank you for inviting me back once
This is now the fourth opportunity I’ve had to address
I had hoped to make a grander entrance to mark the
occasion, but I’m told the pyrotechnics and AC/DC soundtrack are
reserved for fifth visits.
In any event, I’m grateful for the
chance to speak with you in a physical capacity this year. Not least
because of the special contribution you make.
because of the unique role played by the mutuals sector and credit
unions in delivering those services that your members, communities,
and the country need… providing an ethical home for savings, and
affordable loans to those who may otherwise have to resort to high-
Whether that be through the Pennine Community
Credit Union’s efforts to provide savings accounts and affordable
loans to communities across East Lancashire and Cumbria… or Just
Credit Union’s new education grant to help young people to continue in
further education… the sector’s good work runs through every artery of
That is why, in my role as Economic Secretary, I
have always and will always champion the mutuals sector, and credit
unions in particular. The pandemic
And after all, there is so
much to champion.
Again and again, the sector has lived its
core values… putting people before profit, and rising to meet the
challenges of our times.
Your hundreds of thousands of
members relied on you throughout the Covid-19 pandemic… including as a
lifeline for people to borrow affordably when they needed it most.
The government is deeply grateful to you for these efforts.
And I am pleased that Her Majesty has also recognised
leadership in the sector through the honours system – may I take this
opportunity to congratulate those who have been recognised recently,
including Christopher Bell from Capital Credit Union, Joanne Swaine
from Leeds Credit Union, and Karen Bennett from Enterprise, and former
ABCUL President, to name a few, for their services to the credit union
Through the pandemic, as now, the government stood by
you and your values… side-by-side… to bolster credit unions so that
you, in turn, could support your members and communities.
set up Fair4All Finance, which distributed a £5 million Covid-19
resilience fund to support credit unions and community development
finance institutions in England.
In May 2020, the government
also announced that additional funding through the dormant assets
scheme would be released immediately to Fair4All Finance – including
an expanded Affordable Credit Scale-up Programme.
support, reinforced by measures from the devolved administrations,
meant that social lenders could continue to administer loans to
vulnerable customers to effectively serve their communities throughout
the pandemic… and has ensured that the sector continues to grow, even
in the most challenging of times.
Our prize-linked savings
pilot, PrizeSaver, has also helped to increase sector membership and
awareness – supporting members to increase their financial resilience
by building their savings, while extolling the strengths of the mutual
model and attracting new membership to credit unions across the
I have been encouraged by the success of this pilot
– and would like to thank the sector for its positive engagement. It
is a scheme that I saw from start to finish and the impact it has had
I am really pleased that 16 credit unions have
continued running PrizeSaver independently since last year. This is
welcome news, and a strong mark of success. And I hope and believe
that PrizeSaver will continue to go from strength to strength. Cost
The pandemic has proven that the trust placed in the
sector by your members is well-deserved.
That trust will be
vital as people across the country face unprecedented cost of living
pressures – meaning that every pound must stretch further.
know that these are global challenges but, as with the pandemic, we
also know that the government and credit unions can take steps to help
ease the burden.
It is because of this that the government is
providing support worth over £22 billion in 2022-23 to help support
people with these pressures.
As the Chancellor announced at
this year’s Spring Statement, this includes providing millions of
households with up to £350 to support with rising energy bills and
helping people to keep more of what they earn.
has also cut the Universal Credit taper rate, frozen alcohol duty, and
further increased the National Living Wage to £9. 50 an hour from
We went further still – announcing an increase to
the annual National Insurance Primary Threshold and Lower Profits
Limit to £12,570, a cut to fuel duty, and an additional £500 million
to help with the cost of essentials through the Household Support
For your part, it’s vital that credit unions continue
to perform their important role by providing consumers with access to
affordable credit – to help manage expenditure and increase financial
And in this, you will have the government’s full
We will continue to strengthen affordable credit
initiatives, which will both expand the provision of affordable credit
and increase usage.
We are providing Fair4All Finance with
£3. 8 million of funding to pilot a No-interest Loans Scheme (NILS) –
which has been designed for those consumers in vulnerable
circumstances who would benefit most from affordable credit to meet
The first stage of the pilot is now
underway with Proof-of-Concept loans being administered through South
Manchester Credit Union.
This is a fundamental, worthwhile,
new initiative, to provide a gateway product for people who at the
moment are beyond the lending capacity of some credit unions.
The challenge now will be to take that proof-of-concept pilot
to a bigger pilot so that we can now validate it.
morning, I met with recipients for whom these loans are providing
real-life impact – covering the costs of new white goods to keep
families running, funerals for loved ones, and debt consolidation.
I expect the pilot to reach full-scale rollout in a number of
pilot sites across the UK at the start of 2023. Financial inclusion
We must also ensure that the door to affordable credit and
financial resilience is open to all.
Ensuring an inclusive
financial system has been a top priority of mine since I first started
in this role. It is a task which we much approach with renewed vigour
in the face of unprecedented cost of living pressures.
is why, since 2019, the government has chaired the Financial Inclusion
Policy Forum, bringing together the financial services industry,
consumer groups, the regulator and third sector… and why we also
publish an annual report on the government’s work on financial
inclusion, which details a broad range of initiatives over the last
year, as well as ongoing work to support financial inclusion.
The government is committed to encouraging people of all
income levels and at all stages of life to save. ISAs form a key part
of this support, allowing individuals to save without paying tax on
any interest. This includes - but is not limited to – the Cash ISA
which many credit unions offer. This support, coupled with other
savings measures, mean around 95% of people with savings income pay no
tax on that income. Amendments to the Credit Unions Act
government will continue to stand by credit unions in your mission to
provide access to affordable credit and increase financial resilience.
… just as we did in the pandemic… to ensure the sector can deliver for
its members now and into the future.
A big part of that, of
course, is we in government listening and being responsive to the
The ‘Vision 2025’ consultation clearly set out
stakeholders’ interest in offering services beyond those they can
currently offer… allowing credit unions to diversify their incomes and
support financial inclusion by providing further opportunities for the
sector to grow and expand their reach.
We heard you loud and
clear, and last year at this conference, I spoke about our commitment
to amend the Credit Unions Act to allow credit unions in Great Britain
to offer a wider range of products and services.
are delivering on this commitment. I am pleased to announce that we
are preparing on the basis that these changes will be a part of the
upcoming Financial Services and Markets Bill.
legislation will include a new supplementary object, which will be
optional to adopt… enabling credit unions to offer hire purchase,
conditional sale agreements, and insurance distribution services to
We know that you will have members, especially
key workers or those who work a shift pattern, for whom having access
to a reliable car can be essential. And these changes will mean that
you can offer products such as car finance to your members, should
they wish to choose them, for the first time.
expect, there will be processes to navigate, including ensuring
compliance and seeking the necessary permissions from the regulators.
But I believe that this change will genuinely help your members and
see your credit union grow.
The Bill also makes minor
amendments to support best corporate governance, including a legal
requirement for credit unions to submit annual accounts to the FCA,
and express permission for credit unions to temporarily lend to and
borrow from other credit unions, even when there is no membership
link. This shouldn’t change the way you are currently operating, but
rather provide legal certainty for these activities.
thrilled to be delivering on this 2020 Budget commitment… the
government really values its engagement with the sector and I will
keep listening to ensure we continue to support credit unions, so that
you, in turn, can support your members. Conclusion
Gentlemen, let me conclude by thanking you again for all the good work
you‘ve done… and continue to do for your members, your communities,
and the country.
The last few years are testament to the
critical role performed by credit unions… one which I and the
government will continue champion at every opportunity.
you very much.
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