Frank Field urges Church of England to protect Wonga borrowers
The Church of England is considering an appeal from a former Labour minister to buy the loan book of the collapsed payday lender Wonga to prevent its customers from being exploited by debt recovery companies.
Frank Field, the independent MP and chairman of the Commons work and pensions committee, has written to the Archbishop of Canterbury asking him to use the church’s £7.8 billion investment fund to buy Wonga’s debt portfolio. On Twitter, Mr Field, who served as minister for welfare reform in Tony Blair’s government, said he was concerned that Wonga’s administrators would sell its loans on to debt recovery businesses at “knockdown rates”.
“Money recovery agencies will no doubt attempt to buy these very cheaply and make a lot of money from them,” he wrote. “I’ve asked the administrators to remain open to a consortium of people of good will to buy the debts and deal properly with them in a way that protects poorer people.”
Wonga, once the UK’s largest payday lender, was put into administration last week after a spike in mis-selling claims against the company forced it to close.
In a letter to the Most Rev Justin Welby, Mr Field wrote: “Would there be any chance soon of being able to talk to you on the phone to see if this idea is a runner and that extraordinary events could be allowed to rise from the Wonga crush?” Mr Field has also written to Sacha Romanovitch, chief executive of Grant Thornton, the accountancy firm leading Wonga’s administration, to ask it to consider a bid from a church-led consortium
The Church of England was one of Wonga’s biggest critics and the archbishop admitted that he was “embarrassed” after it emerged five years ago that the church’s investment funds had indirectly invested in it.
Despite this history Mr Field said he was asking the archbishop to consider leading a consortium of investors to buy Wonga’s loans, which could be worth tens of millions of pounds.
A spokesman for Lambeth Palace said the church was considering the appeal. “We are reflecting on the letter from Frank Field to help determine what may or may not be possible in the months ahead regarding the repercussions following Wonga’s collapse,” the spokesman said.
The church’s investment fund is prohibited from investing in businesses that derive more than a quarter of their income from high-cost loans, although it is unclear whether this would stop it buying the loans themselves.
At the height of Wonga’s notoriety in 2013, the archbishop said he wanted to “compete” Wonga out of business by setting up more credit unions.
A spokeswoman for Grant Thornton said: “The administrators are more than willing to consider all such interest in accordance with their statutory obligations.”Harry Wilson, The Times