A minister has played down calls to use taxpayers’ cash to help compensate people owed mis-sold loans by defunct payday lender Wonga.
Commons Leader Jacob Rees-Mogg was urged to ensure the Government establishes a scheme to help those expected to be left out of pocket after the administrators confirmed they will receive less than 5% of the compensation they are owed.
He told MPs that any such scheme would be a “question of priorities” given the Government does not have unlimited money available.
Nearly 400,000 eligible claims were lodged against the lender, which collapsed in 2018.
Wonga’s administrators, Grant Thornton, said they would be paying all unsecured creditors 4.3% of their agreed claim over the next four weeks.
Speaking the Commons, Labour former minister Chris Byrant said: “Surely that is unfair. Shouldn’t the Government set up a compensation scheme to meet those figures now?”
Mr Rees-Mogg replied: “With all these issues on matters arising from Government expenditure, there is limited taxpayers’ money.
“The Government cannot pay for everything and it will be a question of priorities as to whether this compensation issue is paid or whether money goes to other very deserving and important causes.
“There’s not unlimited money available.”
Wonga had faced a barrage of criticism over the high interest it charged on loans, and was accused of targeting those who were most vulnerable.
In 2014, the firm introduced a new management team and wrote off £220 million worth of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.
Administrators had received 389,621 eligible claims from those said to have been sold unaffordable loans as of August 2019, according to documents filed with Companies House.
In the month before its collapse in August 2018, the company said its struggles were due to a “significant” increase industry-wide in people making claims in relation to historic loans.