New Co-op MP calls for support for credit unions
Looking at the maiden speeches of the new intake of Labour & Co-operative Members of Parliament, a fine place to start is with Chris Evans MP (Islwyn), who last week drew attention to our calls for support for credit unions, financial inclusion obligations for banks and the Post Office working with credit unions as a new People’s Bank:
I congratulate Dr Coffey on her excellent maiden speech. Her love for her constituency really shone through.
As I rise to make my own maiden speech, I am conscious of, and deeply humbled by, the great privilege that the people of Islwyn have given me by electing me as their Member of Parliament. It is also a great honour to follow in the footsteps of two great champions of the Labour cause. The first MP for Islwyn was Neil Kinnock, and I do not think that I am exaggerating when I say that his vision and foresight as the leader of my party contributed greatly to our victory in 1997.
I am also extremely honoured that my immediate predecessor was Don Touhig. I was fortunate to work for Don during the last four years of his 15 years as a Member of Parliament, and I witnessed at first hand the determination and commitment with which he fought for his constituents. The lives of countless constituents have been improved through his efforts, and, as a result, he is held in the highest regard by the people of Islwyn.
Don Touhig was also a great servant of this House, serving as a Minister at both the Wales Office and the Ministry of Defence. He was held in high esteem by all who worked with him. On a personal note, I am proud to call him my friend, and his words of advice and guidance in my first days in the House have been invaluable. I, too, have some very big shoes to fill, and I can promise the people of Islwyn that I will do all that I can to live up to the high standards set by my predecessors.
Islwyn comprises a series of small towns and villages scattered along the mountains and valleys of west Gwent, nestling comfortably in what could be termed the bible belt of Welsh rugby union. My constituency, like many parts of south Wales, suffered terribly at the hands of the last Tory Government. As a former mining district, Islwyn lost many jobs with the closure of the pits. Whereas the Tory Government abandoned the people of the valleys, I am proud to say that the last Labour Government stepped in to encourage companies to invest in south Wales.
One example of that is the support that the Government gave to General Dynamics, which was encouraged to come to my constituency, and which is still creating jobs for us. One of the last acts of the Labour Government was to award the contract for the new specialist vehicle to General Dynamics. In my constituency alone, that decision will create 200 new jobs and secure a further 250. That is the sort of support for industry and jobs that is so vital to delivering economic recovery, and I urge the new Government to follow the example set by the previous one in that regard.
Those of us fortunate enough to be born in the south Wales valleys grow up with a deep sense of community and belonging. Above all, valleys people are known for their generosity, kind hearts and resilience. Nowhere is that more apparent than in the campaign to restore the Newbridge Memo, the memorial hall in the centre of the town. The Memo was built in 1924 by the contributions of local miners, as a lasting memorial to local servicemen who lost their lives during world war one. The name of every serviceman from the town who answered the call to serve our country is listed on the walls of the Memo. The names are not just of those who gave their lives, but of everyone from Newbridge who was ever called to the colours.
The House should be aware of how important coal mining was for the Welsh valleys. Sadly, however, many people have forgotten how significant coal mining was to our communities in south Wales. It is, therefore, extremely important that the restoration of the Memo goes ahead, because, for some of us, it is our last link to the historic past of the valleys in which we were born. The Memo is not a celebration of the great and the good; rather, it serves as a tribute to the role that working-class people played in making this country of ours great. Thanks to the efforts of the Friends of the Newbridge Memo, it is much more than just a memorial to a bygone age. It is the living, beating heart of the town of Newbridge. It is a palace for the valleys-a palace for working people to enjoy and celebrate. It deserves a great future. Like my predecessor, who threw his weight behind the campaign, I will do everything that I can to see it restored to its former glory.
For me, that campaign demonstrates the strong and vibrant sense of community that is prevalent in Islwyn. However, that is not to say that we do not have our problems. The credit crunch has come to our attention on a national scale in the recent past, but many people in Islwyn have been experiencing a crisis of credit for many years. Unlike many other EU countries, the UK does not guarantee people legal access to affordable credit. Lenders can refuse to lend to anyone, for any reason, and they can charge any price for their lending. They can, and do, impose interest rates at percentage rates in the thousands.
When I did some research into this, I found that Safe Loans, for example, charges a typical annual percentage rate of 2,120.1% on 30-day loans, and that Wonga charges a typical APR of a huge 2,689%. I can well remember that, when I was a child, doorstep lenders such as Provident would charge high interest rates and hammer on doors while people cowered inside because they did not have the money to pay them. These extortionate rates of interest are simply disgraceful, and we should not allow companies such as those to take advantage of the vulnerability of some of the poorest in our society. The fact that we tolerate such practices means that many people are unable to obtain credit without extortionate cost.
One answer is for the Government to provide support for the credit unions, which provide credit at reasonable rates to people who would otherwise not have access to it. The Islwyn Community credit union, like all credit unions, is committed to building its members’ wealth. By contrast, our banks seem to have been committed for too long to building wealth only for themselves. Banks really should take a leaf out of the credit unions’ book, and see their role as being a part of the community, rather than trying to profit from it.
The last Government provided £98.75 million-worth of support to credit unions and community development finance institutions, which provide support for small businesses. They also legislated to ensure that credit unions can fairly compete with mainstream providers of financial services. As a result of these measures, credit union membership has more than doubled since the year 2000, yet strengthening the credit union movement is only a small step in tackling financial exclusion. In their last Budget, and in subsequent announcements, the last Government pledged to introduce a range of measures to tackle financial exclusion, including requiring banks to provide bank accounts to all consumers with a valid address, transforming the Post Office into a people’s bank, and consulting on requiring banks to disclose the extent to which they are under-serving their communities. If seen through, these measures would ensure that bank operations serve all parts of the community, so they can really make a difference to tackling financial exclusion. I urge the new Government to adopt and pursue these measures with all the vigour they can muster.
In addition to the problem of financial exclusion, we find ourselves in a unique economic situation that will require us to make large cuts to public spending, which will affect all parts of the United Kingdom. In making these cuts, we must ensure that we do not hurt the poorest and most vulnerable in our society.
Under the last Government, hundreds of thousands of people were lifted out of poverty, and we must ensure we do not send those people back into it. There are some in this House who propose cutting tax credits. To do so would pass the burden for reducing the deficit on to families that are struggling to make ends meet. To cut tax credits would punish the poor for the greed of the very rich. This would be morally reprehensible, and I urge the new Government to protect tax credits, as doing so would shield the poorest and most vulnerable in our society from the impact of the crisis.
I am also deeply concerned about the Government’s plan to abolish the child trust fund, which will jeopardise the future of our children by cutting down on their options as they enter adulthood. For well-off parents, it might-just might-be possible to fund trust funds to support their children, but for those who are already struggling to get by, the state-supported child trust fund is the only chance they have of producing a nest egg for their children. I therefore urge the new Government to reconsider and ask them to reinstate the child trust fund and protect the future of our children.
We face great challenges ahead, but in facing them we must strive always to make choices that are fair and equitable. As we tackle the deficit, we must strive to protect the vulnerable and the young. We must also seize the opportunities this crisis presents to build a fairer financial system in this country. If we do, we will build a fairer and more just country, which will mean a greater Britain-not just for some, but for all.