Ed Miliband vs Payday Loan Lenders: They Should Be Taxed

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Since winning the leadership role in the UK Labour Party in a vicious battle against his brother David less than 3 years ago, Ed Miliband has made some serious blunders in the eyes of many working class long term supporters. Although he has occasionally made appearances at various union-lead strike events over the last couple of years, his failure to offer full support to their cause, and his inclination to reduce contributions made by trade unionists to his party has evidently made many residents of this country slightly nervous about the outcome of the next general election.

Thankfully, the tides seem to be turning of late and Blair’s successor appears to have acknowledged that the promise of significant change is all that will secure their eventual victory over David Cameron and Nick Clegg’s ConDem Government. First he announced that Labour will all but completely reverse the changes currently being made to the NHS, then his second-in-command,Ed Balls,declared that a new £800,000,000 bank levy would be applied and used to increase free child care allowances to 25 hours per week, and now it’s been reported that Miliband plans to place a new heavy tax on payday loan companies to fund credit unions.

Currently, the Government spends around £13,000,000 per year on supporting non-profit credit unions who help those with financial problems. Although keeping specific figures about the level of taxation payday loan companies will face very close to their chests, the Labour Party expect to raise at least double the amount they currently allocate to the unions, meaning that poor people suffering with monetary woes will be helped even further.

Ed Miliband has proposed that their be a cap placed on credit, so that companies in the payday loan marketplace weren’t able to charge the 5,000% we see on a regular basis. David Cameron told the house of commons last week that he wouldn’t completely rule out a cap whilst he’s still in Government, he said:

“we have to bear in mind the results from our own research about whether a cap would prove efficient, and I think It is completely right for us to regulate the payday loan market properly”

Though some feel this was a last ditch effort by the Tory leader to show Britain he “cared”, others are just glad to see that a change is coming. A party spokesman said that:

“in truth, opting for lending backed by assets is a much better option for people experiencing difficulties. If their banks refuse to ease the strain, logbook loan companies could be the answer they’re looking for”

So what will come of the payday firms and their profits? This is a question on the lips of most politicians in the UK today, and sadly, one that very few know the answer to. As the Government works out their plan of action, and Ed Miliband’s Labour Party iron out the creases in their taxation plan, we could be set to see a major departure from the old way of operating.