Labour finance chief Richard Watts: 'We are determined to do what we can to protect our residents from these legal loan sharks.'
Published: 2 August, 2013
by ANDREW JOHNSON
LABOUR chiefs were left with egg on their faces after it was revealed the Town Hall has invested money in controversial pay-day loan companies such as Wonga – despite waging a high-profile campaign against the high-interest "legal loan sharks".
The revelations have sparked a political row, with Lib Dems claiming their inquiries to officers – who are meant to be neutral – about the investment were leaked to Labour, allowing the ruling party to make a pre-emptive announcement that it would withdraw from the investments.
Labour denies this claim. But it is understood Town Hall chief executive Lesley Seary has ordered an inquiry into the allegation.
Ever since its Fairness Commission initiative three years ago Labour has strongly condemned pay-day loan companies, which they say charge extortionate rates of interest for small loans and trap people in a cycle of debt.
Just last week the Town Hall blocked council computers – including those in libraries – from accessing the companies' websites and banned them from advertising on council billboards.
Town Hall leader Catherine West has written to Mayor of London Boris Johnson asking him to ban the loan "sharks" from advertising on Transport for London buses and at bus stops.
Last week, Labour finance chief Richard Watts said: "Pay-day loan companies rip off residents with sky-high interest rates that exploit some of our most vulnerable neighbours. We are determined to do what we can to protect our residents from these legal loan sharks."
But following the revelations that the Church of England had investments in the companies – discovered after Archbishop of Canterbury Justin Welby spoke out against the lenders – Lib Dems asked Town Hall officers to look into Islington's pension investments.
This revealed that the council has a total of £85,785 invested in four pay-day loan companies – Wonga, Brighthouse, Kestrel Holdings and Zestcash.
Before they released the information, however, the Tribune received a phone call from Town Hall finance chief Councillor Richard Watts to say that he had discovered the investments and had asked for them to be withdrawn.
Lib Dem leader Terry Stacy said: "In my view either Labour knew about these investments, in which case they have been deceitful, or they didn't, in which case they have been incompetent."
Cllr Watts said there had been no political shenanigans, however, arguing that he had made his own inquiries – "completely independently" of the Lib Dems – following the Church of England's embarrassment.
"This is just a small part of our pension investment, which totals £950m, a fraction of one per cent," he said. "We have fund managers who invest in a whole range of companies on our behalf.
"These investment managers who made this decision were chosen by the Liberal Democrats in 2004.
"We have now instructed them to get rid of these investments."
