This week I had the opportunity to take part in an event held by Swoboda Research Centre and the New Economics Foundation (NEF), entitled Credit Unions in 2035: shaping the future of inclusive finance. The event provided the opportunity for the Co-operative Party to discuss our ambitions for the credit union movement and the important role it will need to play in building a more inclusive, equitable and secure economy.

Beginning in the 1960s, the British credit union movement has expanded to approximately two million members and provides £2 billion in loans. These loans provide vital financial support to people and families, enabling them to meet household needs, invest for the future and support loved ones.

Despite this growth over the decades, the British credit union sector is considerably smaller than its American equivalent. The US credit union sector has 143 million members, almost half of the population, with the country’s 4,400 credit unions providing approximately $1.7 trillion in loans to customers. This scale and impact demonstrate that the British credit union movement can expand significantly to deliver for members.

The Government has begun to take action to support credit union growth – with the first recognition of credit unions in decades in the Chancellor’s Mansion House speech. The Government announced a Call for Evidence on the credit union common bond and a new duty on regulators to report annually to parliament on what they are doing to support mutual financial growth and the creation of an effective regulatory framework.

While these first steps in unlocking credit union growth are welcome, there is more that needs to be done to achieve transformative growth which delivers for members and the wider economy. Establishing an auto enrolment for all public sector workers in local credit unions would be transformative in boosting membership numbers, while supporting individual financial resilience. Credit unions could be encouraged to provide new products for members and to establish Credit Union Service Organisations (CUSOs) which would reduce administrative costs and enable them to collaborate on growth.

The credit union movement has helped to change lives for the better. This was recognised by Nobel Peace Prize winner and founder of Derry Credit Union, John Hume, who stated “no movement has done more good for the people of Ireland, north and south, than the Credit Union movement”.  Now is the time for the Government to ensure credit union growth delivers for far more people and communities across the country.