Labour needs to back Archbishop Welby against Wonga

My part of England has a shrinking number of local financial institutions. The Nationwide Building Society closed its branches in Greenwich, Woolwich and Blackheath. Our neighbours used to borrow and save with the Woolwich. The Woolwich Building Society headquarters is now empty. And the big banks don’t lend.

This is London, the part of Britain that is growing the quickest. But we’re a financial black hole. Even in the boomtowns of Osborne’s Britain “growth” is uneven. House prices are rising, but life for people without assets or good jobs is an ever-harder struggle. Legal loan sharks likes Wonga charging 1000s% in interest are the only way for too many of my neighbours to survive.

What is the political answer? We need a cap on the interest lenders can charge, as Stella Creasy and the End Legal Loan Sharking Campaign have argued. Regulation will stop the evil of high interest rates, but it won’t create a better alternative on it’s own.

Greenwich has a small credit union, created to start with to serve council staff. It has tens, if not hundreds of churches and other religious institutions. If it isn’t on every street corner, the credit union can’t challenge Wonga.

Our new Archbishop of Canterbury’s plan is to connect the two, so local, mutual banking institutions have a branch everywhere there is an Anglican Church. Church members are going to become credit union volunteers. Anglicans with a bit of cash might then shift their savings to give their credit union the asset base to lend more.

Labour needs now to strongly back Welby’s plan, nationally and locally. We need to repeat the case for a network of local cooperative, community banks, which exclusively lend to people and businesses in one place. They should take over the capital and branch networks of one of our nationalized banks, but be accountable to local business, savers and councilors, not the treasury. That argument needs to be coupled with a strong commitment to an interest rate cap.

But it’s what we can practically do now – not just post-election policy – which matters now.

The Labour movement needs to join the Archbishop’s organising plan. Town by town, constituency by constituency, Labour activists should be linking up with the Church of England, connecting with other institutions – other churches and religious groups, but also schools, Trade Unions – and creating a local campaigning coalition that builds alternative forms of finance. The relationships and institutions we create in opposition would form the basis of the network of

Our danger as a party is always to assume answers to the crises which face families only happen when levers are pulled in Whitehall. They don’t. Central government can block, capping interest rates. It can enable, with funding with training for local financial coops, and guarantees. But it cannot act, or organize to create the institutions that will make a difference to peoples’ lives itself.

Archbishop Welby will only beat Wonga if Labour members get together with others who want to act, in the place where we live, now.