Credit Unions

Zubir Ahmed Excerpts

Wednesday 16th July 2025 Westminster Hall

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab) [R]]

I beg to move,

That this House has considered the role and future of credit unions.

It is a pleasure to serve under your chairship, Mr Twigg. At the outset of this debate, I wish to place formally on the record that I am a long-standing member of the NHS credit union, an organisation I first joined as it was my workplace credit union. It provided me the opportunity to save directly from my salary before I ever had the chance to spend it. When I received a pay rise, I would increase my contributions. I remain a proud member today, now paying in by direct debit. IPSA, the Independent Parliamentary Standards Authority, has not got quite as far as doing payroll deduction for credit unions.

The NHS credit union is now one of the largest in Scotland, but it did not start that way. It began at the Southern General hospital in Glasgow, founded by Robert Rae, a Unison branch secretary and hospital porter, to help some of the lowest-paid NHS staff—the cleaners, porters and clerical workers—to access fair, affordable finance and build financial resilience through saving. The credit union has grown remarkably since then, with more than 24,000 members, including staff and their families across NHS Scotland and parts of the north of England. Its common bond extends down to Sheffield. It now employs 18 staff and is an inspiring example of how credit unions grow not only in scale, but in purpose, deepening their role in communities and the economy.

[Dr Zubir Ahmed (Glasgow South West) (Lab)]

Will my hon. Friend join me in congratulating many of the credit unions in my constituency, where the Southern General also sits, and indeed where I trained for many years? In addition to the NHS credit union, we have the Penilee credit union, the Levern credit union, the Greater Govan credit union and of course the Pollok credit union run by local legend Jim Garrity and his wife, who have given out £70 million of loans in that time.

Does my hon. Friend further agree about the imbalance between England and Scotland? In England, dormant assets from the Bank of England can be used as capital to fund credit unions, but that is not the case in Scotland. Is that an anomaly she wishes to see changed?

[Katrina Murray]

My hon. Friend is reading ahead in my speech about some of the things that the Government could do to extend and support the sector.

Before joining the NHS credit union, I was a regular visitor to my local community credit union—staffed entirely by volunteers—until I moved house and moved out of the common bond. For nearly 30 years, until it sadly folded in 2017, it was a source of savings and small loans for a community that was mostly cash based. It inhabited the premises that the Royal Bank of Scotland vacated when it closed the branch. Often, small community credit unions remain in places where commercial banks have pulled out. That closure reflects a wider challenge: some credit unions have scaled up and professionalised; others have struggled, in particular those volunteer-led credit unions serving working class and rural communities.

In that unique community-based role, credit unions can offer a vital partnership to support underserved or excluded communities, whether they are excluded by poverty or by geography. All too often, we have heard Members raise the swathes of local bank branch closures in their constituencies. Mine has been particularly affected, as commercial lending evolves and the local footprint of lenders diminishes. Credit unions have to be on both sides of that bridge: at the forefront of innovation but still able to provide traditional, accessible services in the community.

It is vital that we have an alternative to expensive credit, and credit unions have a strong role to play. When a household is financially vulnerable, one fault in their car or one failed fridge or freezer can be the difference between staying afloat and facing a downward spiral of increasingly costly credit. The resilience of having £1,000 in savings is the firewall that stops that spiral.

We have often discussed the positive impact of no-interest loans. Credit unions can play a vital part in the design and delivery of a no-interest loan offer, providing an alternative to financially vulnerable households who cannot rely on commercial lending. Pilots by Fair4All Finance show notable success when it comes to meeting emergency costs for white goods, such as a broken-down fridge, cooker or other essential household appliance. Over 70% of customers in the pilot were in the rented sector, either social housing or renting privately.

As the UK Government’s own materials acknowledge, credit unions offer basic savings and loan services, but increasingly they do much more. Large credit unions such as the Glasgow credit union, which grew out of the Glasgow city council credit union, offer mortgages. They offer financial inclusion, especially for people who may not feel served or welcome in the commercial banking sector. They are not for profit, member-owned and designed to be run with communities, not over them.

Despite all its strengths, the credit union sector faces significant headwinds. I will start with regulation. In recent conversations with the NHS credit union, a number of serious concerns were raised that are shared across the sector. Most notably, the Financial Ombudsman Service has begun applying the commercial lending standards known as the CONC—consumer credit sourcebook—rules to credit unions, despite the fact that they are exempt from those by law. The use of “good industry practice” by the ombudsman without transparency or a legislative basis has left credit unions exposed to a growing number of frivolous or opportunistic claims, often driven by predatory claims management companies.

When credit unions have challenged that with the Financial Conduct Authority, they have been referred back to the ombudsman, creating a regulatory echo chamber that shuts down scrutiny and ignores the fact that the CONC was never intended for mutuals. A superficial search of decisions of the ombudsman using “credit union” as a search term shows that it is the same credit union names that come up. For each case where a decision is listed, there are many more going through the process, with many cases being reopened, and it is an overwhelming burden for these small organisations to process them.

This matters, because it introduces risk and cost into organisations that exist to serve, not to profit. It creates uncertainty, stifles growth and undermines the Government’s ambition to support the co-operative and mutual sector. I urge the Minister to engage with those concerns and ensure regulatory clarity that supports, rather than stifles, credit unions.

Regulation is not the only challenge. Despite some growth, credit union penetration in Great Britain remains low. Just 4% of adults hold a credit union savings account, compared with 25% in Northern Ireland and 73% in the Republic of Ireland. While membership is rising, the number of credit unions continues to fall. To thrive, credit unions need to modernise. Many want to expand their digital offer, working with fintech providers to offer budgeting apps and even current accounts, but innovation costs money. Small unions—especially those still run by volunteers—lack the capacity to upgrade systems or train staff.

I welcome the Financial Services and Markets Act 2023, which gave unions more freedom to offer services such as hire purchase and insurance distribution, but more must follow. I support the proposals to allow investment in credit union service organisations, which could help unions to share IT, compliance and admin systems.

Universal Credit and Personal Independence Payment Bill

Zubir Ahmed Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[Jeremy Corbyn (Islington North) (Ind)]

This is a crucial moment for a lot of people in this country. This Bill did not come from the demands of the disabled community or from an understanding of the inequality and injustice in our society; the whole origin of this Bill was a demand to save £5 billion. That £5 billion was wanted by the Defence Secretary for more armaments—no doubt other Departments were making demands—so the whole thing has been driven from a bad source at the very beginning.

It would be much more honest and much better if the Government simply withdrew the Bill altogether and allowed the review of the Minister for Social Security and Disability to take place and look at the issues of poverty facing people with disabilities and the huge levels of stress that many others face. That includes children with special needs that are not met in schools and children with autism or other special needs not being housed in decent-sized homes. There is a whole area of discrimination against people with all forms of disabilities that could and should be addressed.

As the hon. Member for Lancaster and Wyre (Cat Smith) just pointed out, it was a previous Labour Government who introduced the disability discrimination legislation that made such an enormous difference. Going back further, it was the Labour MP Alf Morris who introduced the Chronically Sick and Disabled Persons Act 1970, which made a phenomenal difference to a lot of people’s lives. What has happened is that that whole tradition seems to have been stood on its head.

We are now presented with a piece of legislation that was going to take the personal independence payment away from a very large number of people, but instead, after the failed rebellion by some Labour MPs, it was changed to say that only future generations will be denied access to the payments they absolutely deserve. That means that in future, there are going to be very serious levels of poverty—much worse than there are now—among every family that includes someone with a level of disability.

[Dr Zubir Ahmed (Glasgow South West) (Lab)]

The right hon. Gentleman is, of course, entitled to his opinion regarding this proposed piece of legislation, but would he concede that voting against it also means voting against £725 extra in cash terms for those on universal credit, against denying those people the ability to try work, and against investing £1 billion in the health and skills of people who wish to try work?

[Jeremy Corbyn]

Voting against this Bill will be a clear message to the entire community that we believe in the equality of people’s needs, and that we will bring in new legislation that will meet those needs. The hon. Gentleman knows full well that he will have to face people in his own advice bureau who will be asking why they cannot get a personal independence payment, yet their brother, their sister or their neighbour still gets it because they got it before the cut-off date. He knows full well the anomaly that, presumably, he will be voting for this evening. Perhaps he would care to reflect on that, and how to represent the people who have sent us to this place.

At the present time, the levels of poverty among the disabled community are absolutely huge. According to Scope, the cost for any family with levels of disability is around £1,000 per month. That is what will be removed if this legislation goes through. I ask Labour MPs—because it is in their hands at the present time—to reflect on what was said in the Labour manifesto last time, what was said in previous Labour manifestos and the history of the Labour party with respect to disability, and not to turn that history on its head by deliberately impoverishing the next generation. Are we to be a society that is a welfare state, with universality of benefits and support for people whoever they are and whatever their needs are—that is the whole tradition of the welfare state—or in 10 or 15 years’ time are we all going to be supporting charities, trying to raise money for people who are in desperate poverty because they have a disability that is absolutely no fault of their own?

We are going to move into a two-tier benefits system, in which those who got PIP before 2026 will seem to be relatively all right, but the rest will not. This is a ridiculous situation for the Secretary of State and the Government to have put the House in, and the only sensible thing to do is to withdraw the Bill now, allow the review to take place, and recognise the needs of all people with disabilities. If that costs us more money, so be it. As a society, are we content not to have a wealth tax, to have massive levels of inequality, and to accept that those with disabilities live economically much poorer lives because of the system we have? Surely, our function as Members of Parliament is to recognise a problem and be prepared to grasp that nettle and, above all, change it.

Welfare Reform

Zubir Ahmed Excerpts

Tuesday 18th March 2025 Commons Chamber

[Liz Kendall]

It does not mean that. Every single case is assessed on individual need. It is really important that the hon. Lady and her constituents understand that we will protect those with severe disabilities who can never work. Anyone who goes through a reassessment will have it done based on their personal needs.

[Dr Zubir Ahmed (Glasgow South West) (Lab)]

My right hon. Friend will agree that under the managed decline of the SNP, people in Scotland are more likely to be economically inactive than those in the rest of the UK. She will further agree that we have greater ambitions for the people of Scotland, particularly young people, than the Conservative party. Does she agree that these reforms are absolutely necessary to put more Scots back to work, and back on the road to prosperity?

[Liz Kendall]

Yes, I would. People in Scotland deserve the same chances and choices to work. They deserve to get skills and training, to not have young people leaving school without the qualifications they need, to have an NHS that is reducing waiting times, and to have overhauled jobcentres—absolutely. We will continue to work with the Scottish Government to put all those problems right, because we want people in every part of this country to benefit.