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Credit where credit’s due for Unite’s payday lender challenge

17 October 2012

5:39 PM

17 October 2012

5:39 PM

Coffee House isn’t always the greatest friend of the trade unions, but one union made a striking announcement today which demonstrated the good that these bodies can do in society. Unite plans to set up a nationwide network of credit unions to try to divert struggling families away from legal loan sharks.

Credit unions make small loans to members using deposits, and are a safe alternative to payday lenders such as Wonga, which charges a staggering 4,214 per cent APR on its loans. The Guardian quotes Unite’s director of executive policy Steve Turner:

‘We are in discussions to try to establish a UK-wide credit union that will give access to cheap finance and cheap credit to millions of people. We are trying to get to the point where you can get emergency loans through credit unions, to stop that third week being Wonga week. And that is for the working poor, let alone those people who are not in work.’

Last week at the Tory conference, Robert Halfon urged fellow Conservatives not to bash the unions as much as they did, reminding a fringe event that 30 per cent of their members vote Conservative. He also praised the services that they offer to help their members. Another Tory MP I chatted to in Birmingham told me they thought the trade unions were ‘great’ for the same reason, pointing to the fact that there wasn’t a single death during the construction of the Olympic park.

There are plenty of reasons why trade unions need reforming: their love of strikes called on very low turnouts being just one. They are currently clashing with Ed Balls and Ed Miliband over the Labour leadership’s sensible decision to back jobs above pay. But Unite’s attempt to drive away loan sharks from the doorsteps of some of the most vulnerable people in society shows that sometimes they deserve a round of praising, not bashing.

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