New politics should be based on giving communities the ability to help themselves

The latest Office of National Statistics figures showing the growing number of Britons earning less than the living wage, reveals the growing inequality at the heart of the so-called economic recovery. Despite promises from Government, many families are still struggling to make ends meet – and in-work poverty is on the rise. If the 2007 crash showed how fragile our prosperity was, the economic figures underline the fragile nature of the recovery.

Families are increasingly turning to personal debt to get by. Access to good quality financial information and affordable financial services are part of the answer. Rebuilding our economy and creating a new savings and banking culture should be core to a sustainable recovery. At a community level, this means supporting Credit Unions; at a national level a government supporting building societies and mutual banks.

The growth in Credit Unions is a sign that an alternative is emerging: over 1 million people are now members and they hold over £1 billion in assets.  In my own patch, the Milton Keynes Credit Union, set up in 2006, has grown to become part of Swan Credit Union; today it serves MK, Aylesbury and parts of Oxfordshire with a local community bank presence. Swan is now one of over 350 Credit Unions in the UK – all of them member-owned and democratically controlled.

International Credit Union Day, today, is about promoting the values and practices behind community banking. The World Council of Credit Unions says that there are more than 57,000 Credit Unions around the world serving 217 million people in more than 100 countries. This year’s theme, “People Helping People”, speaks to the longstanding co-operative principles that people can improve their well-being by working together.

Just as the original co-operative pioneers organised together to take on unscrupulous market behaviour, today’s Credit Unions are providing a practical alternative to the hardship facing working people. As a Labour & Co-operative Councillor in south London during the early part of the crash, I saw the difference that access to safe and secure savings and financial services could make to families living on or near the edge.  As a campaigning Parliamentary Candidate at the last election, I saw inequality, insecurity and poor access to services go hand in hand.

The economy is changing. Figures from Co-operatives UK this summer found 15 per cent of people are now self-employed, up from 11.6 per cent 30 years ago. Households in private rented accommodation have grown from 9 per cent to 22 per cent during the same period.  The mainstream banks are risk averse, locking out many people existing in a precarious world of uncertain income and insecure employment. In many areas, traditional branches have closed, as banks have cut their high street presence. Despite the victories of payday loan campaigners, doorstep lenders and other forms of high-cost credit are still raking in business.

We have some amazing campaigners championing a different kind of financial provision:  Stella Creasy MP and Paul Blomfield MP who gave a voice to the fight against payday moneylenders; John Woodcock MP who backed volunteers in his own constituency to establish the local Barrow Credit Union; national campaigners like Gareth Thomas MP who successfully lobbied the government to establish the Military Credit Union; and former shadow City Minister Alison McGovern MP who has been leading the charge against Government plans to undermine building societies and other challengers to the big banks.

The members who keep Credit Unions growing and extending their coverage, however, are the ones in who deserve recognition. Democratic control, self-help, responsibility, solidarity and concern for others – all deep values embedded in the co-operative and mutual movement. They are also values that find a home amongst a wider public distrustful of major corporations and much of what they hear from Westminster – a message the Labour Party should listen to. If we want to create a new politics, it should be based on giving communities the ability to help themselves, putting values into practice and building strong links at a local level.

Andrew Pakes was the Labour & Co-operative Parliamentary Candidate for Milton Keynes South at the 2015 election. He tweets at @andrew4mk