Wonga Tax Misses the Point

The Labour Party continues to propose ideas that won’t work and could have serious adverse consequences for hardworking people. Yesterday in Southwark the Labour Leader Ed Miliband announced that a Labour Government would introduce yet another tax - a 10% levy of payday lenders. Sadly, the Labour party just don’t get it. People turn to payday lenders because they offer instant loans for small amounts, so families whose incomes fall just short one month can get by.  If a borrower gets behind in their payments the situation can spin out of control. A tax would make the charges higher and make default more likely, not less. Families would be worse off under Labour’s plans.   Earlier this month the Government published two reports which showed that problems in the payday market persist, and that consumers continue to suffer. As a result, the Financial Conduct Authority has made a series of worthwhile proposals. They include proposals to use powers to ban loans and advertisements of which it disapproves, to ensure that lenders cannot roll over loans more than twice, and to limit the number of attempts that a payday lender can make to take money out of accounts. It is absolutely right to regulate this area properly.

 

Chairman of Dulwich & West Norwood Conservatives Andrew Gibson said, “In order to stop hard-working people having to turn to payday lenders the Government is taking real action to tackle the cause, such as taking the lowest earners out of tax, cutting taxes for 2.2 million people and forcing energy companies to put people on their lowest tariffs. Labour have to realise that attacking profits does not hurt the company its hurts those in need of help”.