Payday lenders? The Church should keep to matters spiritual

Justin Welby may be right about payday lenders, but he risks exceeding his remit

It is difficult not to share the Archbishop of Canterbury’s concerns over payday lending. Even if some use Wonga et al only when caught suddenly short by circumstances, interest rates that can spiral to 4,000 per cent per annum too easily become a trap for others. About one-third of borrowers end up in worse financial straits, surveys suggest, and the more unscrupulous firms do little to check that prospective customers can pay.

Justin Welby’s approach to the subject also has much to recommend it. Rather than simply moralising or calling for new laws, the Archbishop proposes that the Church do something itself by providing credit unions with space or even volunteers. Cue much talk of moneylenders in the temple and quotes from Luke (“If you lend to those from whom you expect repayment, what credit is that to you?”). Nonetheless, the central tenet is sound: borrowers can still make their own decisions but might benefit from other options.

Sad to say, within days, Archbishop Welby’s authority suffered a knock. The revelation that the Church of England’s pension fund has money indirectly invested in Wonga was, he conceded, “very embarrassing”, and the admission was followed by uncharacteristic paeans to “a very professionally managed company” run by “a very clever man”. The Archbishop is right that Wonga is by no means the worst of its kind; but his remarks were still something of a volte-face.

Judged by the old marketing saw that all publicity is good publicity, Errol Damelin has cause to thank the Archbishop for keeping his company so consistently in the news. If anyone was not aware of Wonga’s existence before, they most certainly are now. Archbishop Welby’s discomfiture is also a hint – as Matthew puts it – to worry about the beam in one’s own eye before pointing out the mote in another’s.

But the new Archbishop’s relative inexperience in the public realm is not the only worry here. There is also a broader principle to consider. In his latest foray into the national debate, Archbishop Welby has, at least, confined himself to a social issue upon which the organisation he leads – with its “16,000 branches in 9,000 communities” (and, of course, its vast investment fund) – might have some practical impact. Previously, he has shown no such restraint. When 40-plus bishops openly condemned coalition plans for below-inflation benefits increases, the Archbishop gave formal support from Lambeth Palace, stressing the deleterious effect on Britain’s poorest children.

While anxiety over child poverty is admirable, public pronouncements on purely political issues in which his organisation has no direct involvement are as unconstructive as they are inappropriate. The question is neither Archbishop Welby’s motivations nor his capabilities; as a former oil executive and a member of the mettlesome Commission on Banking Standards, he has both the background and the acuity to make an informed contribution. The question is whether he should do so.

For The Independent, even when we agree with him, the answer must be no. For all his fine qualities – many of which were on display in yesterday’s gracious, candid response to the Wonga embarrassment – Archbishop Welby is still the unelected leader of a minority institution which enjoys disproportionate influence on the basis of history alone. His efforts to reclaim the initiative and make the Church relevant again are understandable. But they are also erroneous.

This is no swipe at religion, but such matters are a private affair, and spiritual leaders – for all the authority they may have among their own – have no business in mainstream politics. That bishops still sit in the House of Lords is an anachronism that makes a mockery of British democracy. If Archbishop Welby wishes the Church of England to support credit unions, it is his prerogative to act accordingly, but there his legitimacy ends.