Jeff Salway: Loan firms are flourishing for a reason

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WE ALL know what “Clone Town Britain” looks like. At its heart is the depressingly homogenous high street of the same retail brands, charity shops, bookies and chain pubs and eateries.

The recent demise of many of those retailers has created new space on the high street, only for it to be occupied by payday loan outlets. They will be sent packing, if Ed Miliband has his way. The Labour leader has proposed a change in planning laws to allow councils to refuse permission to certain businesses, the main target being payday lenders and bookies.

Effectively banning payday lenders from the high street is an appealing and popular idea. There’s one big problem though: it would do nothing to prevent payday lenders from continuing to flourish.

Their rapid growth is taking place away from the high street. The biggest providers are online, including perhaps the best known, Wonga. Steps are being taken to curtail their impact online. Access to the loan websites is now banned by some employers, including some councils that have blocked them in their workplaces, community centres and libraries. That’s a more effective measure than closing high street stores, as is the Office of Fair Trading’s belated crackdown targeting the more unscrupulous lenders.

Until there’s more focus on the factors driving demand for payday loans, however, it’s all quite futile. But political appetite for the hard questions remains sadly lacking.

Unify against cuts

Political appetite is also lacking when it comes to opposing the government’s welfare reforms.

That caution is informed partly by the apparently strong public support for the spending cuts, which are taking more than £1.6 billion out of the Scottish economy, according to new research by Sheffield Hallam University.

Unfortunately that support is built largely on myths. If you believe that the welfare bill is unsustainable because of the shirkers that George Osborne is so obsessed with, for example, you’re barking up the wrong tree.

The unemployed do not account for 41 per cent of the welfare bill, as the average Briton believes, according to YouGov research. It is in fact 3 per cent, the government’s own figures show. As it happens, 41 per cent is roughly the proportion of the welfare bill that goes on pensions.

The average Briton also thinks more than a quarter of the welfare budget is claimed fraudulently. The government’s figures show benefit fraud is just 0.7 per cent (and falling). The estimated cost of welfare fraud is dwarfed by the cost of the benefits that go unclaimed each year, not that we’ll hear of any campaigns aimed at helping people claim that to which they’re entitled.

Scots looking to Holyrood to protect them from the effects of austerity have been left disappointed. Perhaps the Scottish Government could take a leaf out of Edinburgh council’s book by fostering cross-party co-operation, the leader of the city’s Labour-SNP coalition has suggested.

In the wake of moves to prevent the capital’s social housing tenants from being evicted because of bedroom tax-related arrears, Andrew Burns called on the two parties to put their differences aside on a national level.

Burns is right. Now is a time for tribal differences – and for the referendum campaign – to take a backseat to the needs of those hit hardest by Westminster policies. It would be politically smart too, because anger over the UK government’s policies will only grow as it becomes obvious that austerity lacks utterly in economic merit.