Jonathan Reynolds MP

Campaigning for the communities of Stalybridge, Hyde, Mossley, Longdendale, and Dukinfield

Blog: Pressure mounting on legal loan sharks

Payday lenders have ended up in the news once again this week as a result of an intervention from the Archbishop of Canterbury, Justin Welby, in which he explained his desire for the church to tackle firms like Wonga, and “compete them out of business”.

The Church’s support will be a welcome addition to the vast coalition which has been campaigning against these companies for some time, and the Archbishop’s ideas about beating them with competition, as opposed to legislation, is certainly a valuable contribution to the debate surrounding the provision of credit for people on the lowest incomes.

Expanding credit unions, as the Archbishop is suggesting, is certainly part of the solution, but we still need to look at the legal and regulatory environment that these firms are operating in to ensure that people in difficult circumstances are not being preyed upon by lenders charging extortionate interest rates.

I recently joined fellow Labour MP’s as part of a campaign organised by the Unite trade union in support of Sheffield MP, Paul Blomfield, who has tabled a bill in Parliament to try and introduce stronger regulations for legal loan sharks.

The participation from Members of Parliament was a clear demonstration of the support there is for substantial action on this matter. I also took the opportunity just before recess last week to question the Minister for Business, Innovation, and Skills, Jo Swinson MP, on this issue in the House of Commons.

On the surface she was very much in agreement that something needed to be done, and was quick to inform us of the various discussions Ministers in her department have been having with the industry to see what can be done.

However, no matter how many discussions she or any other Government Minister point to, they can not hide the fact that, in terms of concrete action, there is nothing that they have done which has actually helped the countless number of people who have become trapped in debt by these lenders.

This inaction can only last for so long. This is a campaign that continues to grow, and will continue to do so until something meaningful is done. The sooner the Government acts the better.  

Published July 26th 2013.

 

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