25 September 2018

A Scottish Labour government would expand support for credit unions and give every first year high school pupil a £20 deposit savings account with a local credit union in a bid to reduce the influence of pay day lenders in Scotland, within a generation.

Richard Leonard announced our new policy on a visit to a credit union in Liverpool as part of 2018 UK Labour conference.

Today in Scotland too many families are turning to high cost pay day lenders to cover essential bills

Figures from the debt advice charity StepChange suggests that nearly 1 in 5 people seeking help with their debt owe money to a pay day loan company with an average debt of £980.

Radical Labour governments in Scotland and across the UK will will help people tackle their personal debt with policies that help the cost of living crisis like:

In addition to expanding support for credit unions in Scotland, Scottish Labour would take action on the personal debt crisis by:

• Fixing our housing markets with rent reforms and building more homes for social rent
• Putting more money in working class families’ pockets by increasing child benefit by £260 per year
• Driving up wages with an industrial strategy to deliver better paid jobs, using government grants to help Scottish based companies upskill their workforce and diversify
• Taking back control of public transport to ensure fairer ticket prices

A UK Labour government would:

• Ensure a cap on credit card interest payments.
• Deliver fairer energy prices.
• Introduce a £10 per hour real living wage.
• Ban on exploitative zero hours contracts.

Richard Leonard said:

“Scotland’s broken economy doesn’t work for working people, with too many families having to turn to high cost credit to pay essential bills. That cannot go on.

“Under Labour, the days of predatory companies profiting from the squeezed wages of working people will end. Labour will take real action on the cost of living to ensure more money in the pockets of working people.

“But I also want to see generational change in attitudes towards how people access credit if they need it. That’s why a Scottish Labour government would expand support for credit unions and establish a credit union account for every first year pupil in Scotland – we’ll put £20 in it too.

“Credit unions can play a vital role in personal financial education and on the importance of an ethical economy”

“This will increase awareness of credit unions among working class families and ensure that generations of young people to come have access to low cost credit.”