Osborne considers levy on payday lenders

Osborne considers levy on payday lenders

Payday lenders could be hit with a levy to pay for the battle against illegal loan sharks and money laundering, chancellor George Osborne has said.

Osborne said he was "looking at" a levy on the payday lending industry after Labour's Richard Burden (Birmingham, Northfield) questioned why the budget of the Illegal Money Lending Team had been cut by a third.

The chancellor indicated that the Birmingham-based unit and other similar teams could in future be funded by a levy.

Standing in for David Cameron at Prime Minister's questions, Osborne said: "Of course we take very seriously illegal loan sharks and indeed excessive interest charges on payday lending, which is why it was Conservatives who introduced the first ever cap on payday lending.

"And on the specific question you raise about the funding for illegal money laundering and loan shark teams, we are looking actually now at a levy on the industry to meet the funding requirements that you identify."

Burden had asked: "As Christmas draws closer you will know that people having difficulty making ends meet won't experience a lot of goodwill in the season of goodwill if they fall into the clutches of loan sharks as they try to buy presents for their families.

"So why are you choosing now to cut the budget of the Birmingham-based England Illegal Money Team by a third when they've helped 24,000 loan shark victims to get £63m of illegal debts written off.

"Will you have a word with your friend the Business Secretary who seems to be refusing to answer questions from the Daily Mirror on this subject?"