Join The War On Wonga

Maurice Glasman writes: 

The archbishop of Canterbury, Justin Welby, is a brave man. Not only has he told payday lender Wonga he wants to "compete" it out of existence, but he was also the first prelate since Archbishop Laud in the 1630s to stand in the Lords and denounce usury.

The Puritans cut Laud's head off. I was there when Welby spoke out against payday loans in the House of Lords last month, and judging by the look on the face of business minister Lord Younger, the peers regretted the loss of power to repeat the execution.

Despite his plea, parliament continued in its 400-year refusal to cap interest rates. The arguments against the cap are familiar: the government should not interfere in the workings of free markets; taking out a loan is a matter of choice; capping rates would lead to the growth of illegal loan sharks.

However, companies such as Wonga, Ramsdens and the Money Shop are not operating in a competitive market in any real sense (they can charge whatever they like to people in desperate need of cash), and choice is not the correct way of understanding the captive nature of the relationship. In places with an interest rate cap of 20%, such as Germany, there is no evidence of a rise in illegal lending.

First Thatcherism, then New Labour and now the coalition have failed to challenge the domination of finance capital, the stagnation of real wages and the increasing personal debt that looms over families like the shadow of death.

In his speech Earning and Belonging, Labour MP Jon Cruddas told the story of the Northern Counties Permanent Building Society, founded by workers in 1850. The mutual became a trusted local financial institution, merged with the Rock Building Society in 1965 and continued to flourish.

It demutualised in 1997 to increase the return on its assets in the form of Northern Rock, and lost the lot in 11 years. In 2004, Northern Rock was the fourth-largest mortgage lender in Britain and sponsored Newcastle United. Now Newcastle are sponsored by Wonga. That is the symbol of the failure of successive governments.

After the Lords debate, the archbishop turned to me and said: "If they want war they'll get war." He has been true to his word. But the war against Wonga cannot be won by the church alone. A new alliance needs to be built.

Other faiths can be bought in. Footballer Papiss Cissé's initial refusal to wear the Wonga-sponsored Newcastle shirt is a reminder that Islam has a noble tradition in opposing usury. Before the last election a cross-faith alliance was manifest in the London Citizens campaign for a living wage, an interest rate cap and the endowment of regional banks using 5% of the bailout. It remains a robust and relevant proposal.

When I met Pope Francis, he was straightforward on this point. He asked: "What's the idea? That the banks fail and it's the end of the world, but the workers starve and that's the price we have to pay?" The leadership is already there for an economics of the common good between the great faith traditions.

But the faith groups need other partners, from ethical traditions rooted in the lives of working people that still have assets and membership. It is the historic responsibility of the Labour movement to partner the faiths in upholding the dignity of the person and resisting the dominance of capital.

Such an alliance would be in the tradition of a movement that used to build associations that improved the conditions of our members, such as building societies, banks and burial societies. It did this in partnership with the Catholic and Protestant congregations.

The Unite Union's efforts to establish a "Bank of Salford" are excellent; this work needs to be intensified and spread throughout the country in partnership with churches, mosques, credit unions and campaigning groups that grew out of the St Paul's occupation and the discovery of the power of the City of London Corporation. There is no sector where the few dominate the many like that of payday loans.

The Labour party already supports a living wage, an interest rate cap and the setting up of regional banks. Ed Miliband should build on the momentum of the new politics forming before our eyes, and make the next election the interest-rate election.

The conservative and liberal traditions have always had trouble understanding the power of money and how to resist it; the Labour tradition, like the church, knows it in its guts.

It is time for faith, labour and civil society to come together and present an economics of the common good. It is time to join the archbishop in his war on usury.