Vince Cable backs Church plan to wipe out loan firms

Vince Cable said the government was looking at better regulation of the industry. Picture: Getty

Mr Cable said the government was looking at better regulation of the industry as well as a bar on advertising high-interest loans to people who can ill afford to pay them back.

His comments came as it emerged Channel 5 has struck a deal for a new show which has been financed by lender Wonga.

The broadcaster said it was “fantastic” to be working with the firm – which has come under fire for charging high interest rates – on its new “endurance” show called Go Hard Or Go Home.

The archbishop, the Most Rev Justin Welby, has revealed he wants the Church of England to “compete” with payday loan firms to put them out of business with the expansion of the Church’s own credit unions. The archbishop said he had told Wonga chief executive Errol Damelin about his aspiration.

“I’ve met the head of Wonga and we had a very good conversation and I said to him quite bluntly ‘We’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence’,” Mr Welby told Total Politics magazine.

The entire payday lending industry, worth £2 billion, was referred last month for investigation by the Competition Commission after the trading watchdog uncovered “deep-rooted’’ problems with the industry.

The Office of Fair Trading said it decided to make the referral because it continues to suspect that features of the market “prevent, restrict or distort competition’’.

Mr Cable said: “I think the Archbishop of Canterbury has hit the nail on the head.”