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Financial Services Bill

I had a credit union in my constituency, which got into trouble some years ago and, sadly, went into liquidation about a year ago. During the time of its difficulties, my constituents could refer to the ombudsman to take up any concerns that they had and when the credit union went into liquidation, there was a compensation scheme. Indeed, I was a small shareholder in that credit union and received prompt compensation. It is those features of regulation by the Financial Services Authority that it is critical for us to extend to members in Northern Ireland. As was mentioned earlier, the Treasury Committee, of which I am a member, visited Northern Ireland a week ago today. We were there primarily to look at the Presbyterian Mutual Society, but we touched on regulatory and other issues related to credit unions. The debate so far has summed up some of the ambiguities between registration and regulation. That is a feature in Northern Ireland where the local Department, DETI, is responsible for registration. In our discussions in Northern Ireland, people were at pains to point out that the law does not state as clearly as I suspect everyone would like the connection between registration and regulation. We were there to address those issues and our report will come out in the next few weeks. On credit unions, it is important that we recognise the wider issues involved. Of course, we have to solve the problem of registration and regulation. It has been answered in the context of Great Britain because it comes within the ambit, overall, of the FSA to carry out both functions. As someone who takes an interest in this, I have to say that the FSA has been effective at regulating the diverse credit union movement in England and Wales and has, indeed, been able to ensure that depositors are protected and that the problems that have arisen are taken up. Indeed, it has sponsored bringing credit unions together when that is a more acceptable solution to the difficulties that they might otherwise get into. There are major advantages to extending such regulation of credit unions to the Northern Ireland membership. It is particularly important, too, to remember that although credit union membership in Great Britain is very low—less than 1 per cent.—in Northern Ireland it is very significant indeed. There is a much longer history of credit union involvement in Northern Ireland and the number of members is significantly greater, yet they do not have as many protections as members in Great Britain. That needs to be remedied. As has been mentioned, the extension of the services that credit unions can provide into some of the more basic financial services—credit cards and various other things that have been mentioned—is critical if credit unions are to provide a 21st-century service and are to be allowed to compete with other financial service organisations. I think that I can be confident that, if that were to happen in Northern Ireland, they would be able to compete in a way that the credit union movement in Britain is not, as yet, ready to. For all those reasons—to ensure that the credit unions have those protections, that we clear up this confusion, that everybody is certain that regulation is extended to credit unions, and that we extend the services that they provide so that they can build on their membership and on providing a proper service to many disadvantaged communities across Northern Ireland—I commend the new clause to the House.