1.7million people in this country don’t have access to banking of any kind, and 40% of households have less than £100 in savings, according to a recent Report by the House of Lords on Financial Exclusion.

But while the majority of the UK’s financial services industry- which is dominated by profit-driven PLC banks – seem to be fine ignoring the problem, financial exclusion is a ticking timebomb under our economy. And it’s up to us to figure out what to do about it.

The Select Committee which authored the Report took evidence from a huge range of organisations and individuals. This included everyone from big banks like Barclays to nonprofits like the Birmingham Financial Inclusion Partnership the Centre for Responsible Credit, through to notorious rent-to-own firms like Brighthouse.

This detailed piece of work centered on the committee’s take on the Government’s stated want to have a system that ‘works for everyone’.

Whilst this article will not cover all aspects of the work, it is clear that the Government would do well to listen and action its thoughtful recommendations:

The Report calls for a new Minister for Financial Exclusion, which along with a Government-wide strategy, would send a signal to others that those in the corridors of power take the problem seriously.

New duties on the FCA (The Financial Conduct Authority, which regulates the financial services sector) to give it a specific role in promote financial inclusion and put in place a ‘reasonable duty of care for customers on financial services providers’ would be a fantastic steps in remolding the system. Indeed the Co-operative Party called for these duties at the time of the FCA’s creation in 2012 but its amendments were ignored at the time by the Coalition government.

Taking one step back towards education, it is clear that financial education and know-how can significantly improve the chances of people to avoid exclusion. Jonathan Reynolds MP (Shadow City Minister) recently called for financial education to be part of the national curriculum for primary schools and this measure is echoed within the Committee’s work. They go further and call for the Ofsted commons Inspection framework to be updated so as progress in delivering financial education can be measured.

Over the years the co-operative movement and its politicians have become synonymous with tackling the high cost of credit, campaigns, policy and indeed local and national government action have been spearheaded by co-operators, the Select Committee identifies the problem as well, they rightly call for a the Government to provide ‘all necessary assistance to further combat financial exclusion exacerbated by high cost credit’ and believe the FCA should conducted a full review to uncover the need for more regulatory intervention. Outside of regulation and legislation the co-operative movement has some of the answers, for example organisations like ‘Fair For You’ should be the norm rather than Brighthouse.

The expansion and development of the country’s growing Credit Unions are an important part of this jigsaw puzzle. In recent months, Co-operative Party Parliamentarians have forced votes on the floor of the House to seek to ensure Credit Unions could provide new financial products such as ‘help to save’. Whilst unsuccessful in this endeavour, it is clear that, Credit Unions are making great strides to provide the services and customer experience that the market demands.

The Committee recommends that that there is new work between Government, representatives of banking and credit unions to explore new ways of increasing the lending, at reasonable rates, of investment capital to credit uinions. This would, along with the other measures discussed, would be hugely popular with all those vested in the success of this vital movement and a great start toward ensuring that we have a financial system which ‘works for everyone’.