The incoming Archbishop of Canterbury has joined forces with the Lab
The highly political intervention by Justin Welby, the Bishop of Durham, is his first since being announced as the successor to Dr Rowan Williams as leader of the Church of England.
Bishop Welby has denounced payday loan firms and the levels of interest they charge as "morally wrong" and even a "sin".
But he is stepping up his campaign with a House of Lords amendment – jointly with a Labour peer – to a Coalition finance bill which would give regulators the power to cap the total cost of loans.
The Coalition has so far resisted any changes and has already defeated a similar amendment in the House of Commons, lodged by the Labour MP Stella Creasy.
It is understood that Bishop Welby was then contacted by Labour Party officials asking him to put his name to the new amendment going before the Lords on Wednesday.
The amendment – with the backing of Bishop Welby and other senior bishops who sit in the Lords – has every chance of succeeding.
Bishop Welby refused to comment on his political intervention but has in recent months made outspoken attacks on payday loan companies. He said earlier this year: "The rates of interest are absolutely terrifyingly high.
"The payday lenders talk of an amount of money in cash terms that you pay extra at the end of the month, and then it does not sound too bad, but the reality is interest rates in the thousands of per cent, which at any time in history would have been called usury, and which the church has always considered a sin, and I think that even now it is a sin to charge that level of interest.
"It is just morally wrong. And you can trace that back to Old Testament times."
The Treasury's Finance Services Bill will create a new regulator – the Financial Conduct Authority – but critics argue that without the power to limit costs it will allow payday loan companies, such as Wonga, to continue to charge exorbitant interest rates, which can be equivalent to 4,500 per cent annually.
A Church of England spokesman said: "It is not surprising to find Bishop Welby's name on this amendment. He has spoken about this before and expressed strong views.
"Speaking up for the marginalised poor and – in this case those exploited by payday loan companies – has been the business of the Church for a couple of millennia."
The spokesman insisted Bishop Welby, who takes up his new post as Archbishop of Canterbury in March, was only intervening in politics with a "lower case 'p'".
The Treasury may not see it that way, having seen off Miss Creasy's attempted amendment in the Commons.
A spokeswoman for Wonga said yesterday: "We offer a service to consumers that is transparent on price. The reality is our loans cost one per cent per day. It would be brilliant to sit down with our critics and explain how it works."
This article originally appeared in The Telegraph on the 25th November 2012. View the original article here