Asked by: Jim McMahon (Labour (Co-op) - Oldham West, Chadderton and Royton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions she has had with regulators on reviewing rules on credit unions offering insurance products such as income protection.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
Credit unions are regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to ensure the stability and soundness of the sector. The regulators are independent and make decisions on the regulation of credit unions in line with their statutory objectives.
Credit unions themselves are not insurance providers. Following the Financial Services and Markets Act 2023, credit unions were given clearer permissions to act as distributors, enabling their members to access insurance products through partner firms. This does not allow credit unions to underwrite insurance themselves, and any arrangements made under these rules would be subject to the regulators' consumer protection rules.
In response to a request from HM Treasury, the PRA and FCA published reports on the mutuals sector on 5 December. As part of this, the regulators have committed to reviewing the regulatory framework governing credit unions.
Asked by: Gareth Thomas (Labour (Co-op) - Harrow West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she will discuss support for new mutual banks with Ministerial colleagues in the Department for Business and Trade.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is committed to supporting the growth of mutual financial services in line with the manifesto commitment to double the size of the mutual and co-operative sector.
HM Treasury works closely with departments across government, including the Department for Business and Trade, to deliver this commitment. We also engage regularly with the mutuals sector to understand the challenges they face and explore opportunities to help the sector grow.
Asked by: Marsha De Cordova (Labour - Battersea)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, what assessment he has made of the potential merits of encouraging more businesses to become certified B corporations.
Answered by Blair McDougall - Parliamentary Under Secretary of State (Department for Business and Trade)
Purpose-driven businesses, including B Corporations, have a unique and powerful ability to innovate and scale solutions to the big social and environmental challenges that we face as a country. The Government recently launched the Office for Impact Economy, which will look at the vital role of policy levers in helping the UK Government to harness and grow the impact economy, including B Corporations and other purpose-driven businesses. This builds on our manifesto commitment to support diverse business models which bring innovation and new products to the market, and to double the UK’s co-operative and mutuals sector. As part of the Autumn Budget, DBT launched a Call for Evidence on business support for Co-operatives and Non-Financial Mutuals which will be open across Great Britian for 12 weeks.
Asked by: Lillian Jones (Labour - Kilmarnock and Loudoun)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, steps he is taking to support community-owned and co-operative businesses to have a leading role in high-street renewal.
Answered by Blair McDougall - Parliamentary Under Secretary of State (Department for Business and Trade)
Our Plan for Small Business, published in July, places high streets at the centre of economic renewal, recognising them as vital centres of growth, employment and local identity. This plan, alongside MHCLG’s Pride in Place Strategy, reflects the role of communities and local leaders in shaping their high street environments.
Co-operatives, Mutuals and the wider social economy combine entrepreneurial drive with a commitment to supporting workers and communities. That is why we are committed to doubling the size of the Co-operative and Mutuals sector; benefitting both high streets and other business environments.
At Budget 2025, DBT launched a Call for Evidence on business support for Co-operative and Non-Financial Mutuals that runs until 18 February: Business support for co-operatives and non-financial mutuals - GOV.UK.
Asked by: Patrick Hurley (Labour - Southport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what support she is offering for the building societies, in the context of the government's ambition to double the size of the mutuals sector.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is committed to supporting the growth of building societies in line with the manifesto commitment to double the size of the mutual and co-operative sector. HM Treasury has already announced measures to support the sector and is currently progressing these.
For building societies specifically, HM Treasury has committed to progressing further amendments to the Building Societies Act 1986. This follows two statutory instruments being laid in October 2024, which raise the turnover limit for the definition of a small business for the purpose of wholesale funding limit exclusions, remove outdated director retirement requirements, and simplify how balance sheets are signed. These will create a more supportive legislative environment for building societies.
To support all financial mutuals, HM Treasury has also asked the Prudential Regulation Authority and Financial Conduct Authority to produce a report on the current landscape of the sector. This is expected to be published before the end of 2025. The government also welcomed the establishment of the Mutual and Co-operative Sector Business Council to consider mutual and co-operative solutions. The government also published the Financial Services Growth and Competitiveness Strategy, which will support all organisations in the financial services sector and encourages the sector to continue to work in partnership with government to deliver growth.
Asked by: Jim McMahon (Labour (Co-op) - Oldham West, Chadderton and Royton)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to help support the growth of the mutual banking and building society sector.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The government is committed to supporting the growth of building societies and all mutual financial services in line with the manifesto commitment to double the size of the mutual and co-operative sector. HM Treasury has already announced measures to support financial mutuals and is currently progressing these.
For building societies, HM Treasury has committed to progressing further amendments to the Building Societies Act 1986. This follows two statutory instruments being laid in October 2024, which allow building societies to accept deposits from a wider range of SMEs, remove outdated director retirement requirements, and simplify how balance sheets are signed. These will create a more supportive legislative environment for building societies.
To support all financial mutuals, HM Treasury has also asked the Prudential Regulation Authority and Financial Conduct Authority to produce a report on the current landscape of the sector. This is expected to be published before the end of 2025. The government also welcomed the establishment of the Mutual and Co-operative Sector Business Council to consider mutual and co-operative solutions. The government also published the Financial Services Growth and Competitiveness Strategy, which will support all organisations in the financial services sector and encourages the sector to continue to work in partnership with government to deliver growth. Finally, the government is also supporting the credit union sector by committing to bringing forward a package of growth-focused reforms to the credit union common bond.
The government continues to engage regularly with mutuals to understand the current barriers they face and consider further opportunities to help the sector grow.
Asked by: Patrick Hurley (Labour - Southport)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, what recent progress he has made on doubling the size of the mutuals sector.
Answered by Blair McDougall - Parliamentary Under Secretary of State (Department for Business and Trade)
As part of the Autumn Budget announcements, the Department for Business and Trade (DBT) launched a Call for Evidence on Business Support for Co-operatives and Mutuals. This will be open across Great Britain for 12 weeks.
DBT ensured that for Financial Year 25/26 Growth Hubs in England offer support to businesses with alternative business models – including Co-operatives and Mutuals, as a condition of funding, and included more information on Co-operatives and Mutuals through the highly successful Help to Grow Management programme.
DBT is looking at how to integrate support for Co-operatives and Non-Financial Mutuals within the government’s overall approach for supporting SMEs, including via the Business Growth Service.
DBT continues to work closely with the sector, including the new Mutual and Co-operative Business Sector Council.
Asked by: Gregory Campbell (Democratic Unionist Party - East Londonderry)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when she expects to receive the report on Mutuals from the Financial Conduct Authority and Prudential Regulation Authority.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
In line with the government’s manifesto commitment to double the size of the co-operative and mutuals sector, the Chancellor announced measures to support the sector at Mansion House 2024. This included asking the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) to prepare a report on the mutuals landscape, to ensure that regulation for all mutuals remains proportionate and enables growth.
The report is expected to be published by the regulators before the end of 2025.
Asked by: Andrew George (Liberal Democrat - St Ives)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans the Government has to promote (a) community banking models and (b) cooperative financial institutions to improve access to banking services in underserved areas.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government recognises the importance of diversity in the UK financial services sector, including community banking and co-operative models such as credit unions. These institutions provide valuable options for local communities, including underserved areas, by offering savings products and affordable credit.
To support this, the Government is pursuing plans to reform the credit union common bond, making it easier for credit unions to grow and serve more members. We have also asked the FCA and PRA to publish a report on the mutuals landscape by the end of 2025 to inform future policy development.
In addition, some building societies are exploring innovative ways to deliver banking services alongside their branch networks, such as through multi-bank kiosks with deposit ATMs. The Government welcomes these industry-led initiatives that improve access to banking services for customers.
Asked by: Jim McMahon (Labour (Co-op) - Oldham West, Chadderton and Royton)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment her Department has made of the potential contribution of co-operatives in agriculture to food security.
Answered by Angela Eagle - Minister of State (Department for Environment, Food and Rural Affairs)
The Government strongly supports the benefits co-operatives can bring and recognises the important role they play in food security, the resilience of the food sector and as a lifeline for community access to food.
Through the food strategy, Defra is considering how to better support local and place-based initiatives to deliver the changes needed for resilience, including food and farming co-operatives and mutuals.