Socialist Worker

Osborne makes a U-turn on payday loan sharks

Issue No. 2381

A payday loan shop in London after the August 2011 riots

A payday loan shop in London after the August 2011 riots (Pic: sarflondondunc on Flickr)

Tory Chancellor George Osborne did a U-turn on payday loans companies last Monday.

He announced that they needed to be controlled and would have their loan costs capped.

He will add new rules to the Banking Reform Bill currently in parliament.

The loan companies protested that this would limit people’s access to credit and open the way for “illegal lenders”. 

The controls will include a cap on interest rates and limiting penalties for late payment, which can sometimes be as much as twice the original loan amount.  

One firm, Wonga, charges the equivalent of 5,853 percent interest a year on some loans.

If you enjoy Socialist Worker, please consider giving to our annual appeal to make sure we can maintain and develop our online and print versions of Socialist Worker. Go here for details and to donate.

Article information

Tue 26 Nov 2013, 17:39 GMT
Issue No. 2381
Share this article


Mobile users! Don't forget to add Socialist Worker to your home screen.