We were delighted to welcome Labour Party Leader Ed Miliband to our Peckham office, where he announced significant new support for credit unions across the UK and highlighted the crucial role we play in providing fair, affordable financial services to our communities.
Major policy announcement
During his visit to LMCU, Ed Miliband unveiled Labour’s plans to double government funding for credit unions from £13 million to £26 million annually through a new levy on payday lenders.
“The cost of living crisis afflicting millions of Britain’s families is so bad that it is creating a personal debt crisis too,” said Mr. Miliband. “We must protect the most vulnerable people in our society from the worst of exploitation by payday lenders. And it is right that the companies that benefit from people’s financial plight accept their responsibilities to help ensure affordable credit is available.”
Meeting our team
The Labour leader was joined by Deputy Leader Harriet Harman MP and met with our staff including Manager Joan Driscoll and Chief Executive Lucky Chandrasekera, along with President Heather Crawford and Treasurer Louis McLeod. Also present were Stella Creasy MP, Labour’s Shadow Minister for Competition and Consumer Affairs, and Catherine McKinnell MP, Shadow Treasury Minister.
Ms. Harman noted it was a pleasure to visit and talk with our staff and members who had been affected by high-cost lending.
The ‘personal credit crunch’
Mr. Miliband highlighted that the payday lending market had doubled in just four years and was now worth £2.2 billion, with up to five million families expected to borrow from payday lenders in the following six months. More than 1.5 million households were spending over 30% of their income on unsecured credit repayments.
“The prices families have to pay keep on rising faster and faster than the wages they are paid,” he explained. “Almost a third of the payday loans taken out in Britain at the moment are to cover the cost of people’s gas and electricity bills. For too many families the end of the month is now their own personal credit crunch.”
While payday lenders were charging interest rates exceeding 4,000% annually, we and other credit unions offer loans at significantly lower rates alongside financial education and support.
Supporting credit union growth
The proposed levy would build on existing regulatory fees, specifically directing additional funds toward expanding credit union services. We welcome both the visit and Labour’s recognition of our work in providing ethical financial services. The announcement reinforced the important role we play in offering fair alternatives to high-cost credit for communities across London and the UK.
