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Cable backs Welby in Wonga row

Business Secretary Vince Cable backed the Archbishop of Canterbury after he spoke out about how he wants the Church of England to put payday loan firms out of business.

Mr Cable said the Government was looking at better regulation of the industry as well as a bar on advertising high interest loans to people who can ill afford to pay them back.

His comments came as it emerged that Channel 5 has struck a deal for a new show which has been financed by lender Wonga - a move which has been denounced by a campaigning MP.

The broadcaster chose not to respond to criticism from MP Stella Creasy and instead stuck with its view that it was "fantastic" to be working with the firm - which has come under fire for charging high interest rates - on its new "endurance" show called Go Hard Or Go Home.

The Archbishop, the Most Rev Justin Welby, has stirred up the row about payday loan firms by voicing his unease. He said in an interview that he wanted to "compete" them out of existence with the expansion of the church's own credit unions.

The Archbishop said he personally told Wonga chief executive Errol Damelin about his aspiration.

"I've met the head of Wonga and we had a very good conversation and I said to him quite bluntly 'We're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence'," Mr Welby told Total Politics magazine. "He's a businessman, he took that well."

The entire payday lending industry, worth £2 billion, was referred last month for a full-blown investigation by the Competition Commission after the trading watchdog uncovered ''deep-rooted'' problems with the industry. The Office of Fair Trading (OFT) said it decided to make the referral because it continues to suspect that features of the market ''prevent, restrict or distort competition''.

Mr Cable backed Mr Welby's standpoint, telling Channel 5 News: "I think the Archbishop of Canterbury has hit the nail on the head. But if we are going to deal with abuses in the payday loans sector, which is what we want to do, there has got to be a better alternative.

"Credit unions are a better way of providing credit for people on a lower income who are not credit-worthy and can't use banks. We've got to have an alternative and the Archbishop is right not just to condemn abuse but to offer alternatives which are more ethical."


From Belfast Telegraph