Back in 2011, Ed Miliband made a conference speech that was less than well received. It was perceived as too wonkish and too vague. It spoke of businesses in terms of “predators” and “producers”, which inevitably led journalists of all different stripes to ask which companies fell into which bracket.
Today we’ve got an idea of what Miliband meant – and what he intends to do about it.
A policy of placing a levy on the profits of the vulture capitalist high-street lenders who prey on the misery of the poor and the struggling would be a good one if that was all that was being proposed. Anything to mitigate against a business model that is entirely built on driving the desperate into ever great depths of desperation is fine by me.
But what Miliband is proposing today goes further than that – he’s saying that a Labour government would place a permanent levy on the profits of payday lenders (AKA legal loan sharks) and hand that money to local credit unions.
This is taxing the predators to fund the producers. Taxing the 5000% interest mob to fund the (maximum) 26% interest gang. Taxing the financial speculators to fund the local savers trying to help out their local community.
Back in 2011 I asked a senior Milibandite what predators and producers looked like. “You’ll know when you see one”, I was told. In this case they were right. No-one needs to be told that Wonga are predators. No-one needs to be told that Credit Unions are producers.
The fightback against the misery industry has begun.
The Tories can’t – and won’t – match Labour on this. They are too bound up – personally and professionally – with the purveyors of vulture capitalism.. They see easy, high-cost credit as part of doing business. It forces people to work a little harder, for a little longer to pay off their debts – if they can ever be repaid. It creates a workforce who are truly desperate. It creates a workforce who will do what they’re told.
It creates a low cost workforce, winning the race to the bottom that is Cameron’s “global race”.
But the way in which Miliband is clamping down on payday lenders is also indicative of the way in which Ed intends to govern. He’s not going to be shy about intervening in the market to get more socially acceptable outcomes – whilst manipulating the market to the benefit of the consumer and the low paid. He’s going to be on the side of the “little guy” – standing up for the five million families who will be driven towards legal loan sharks this year and offering them an empowered alternative. He’s not going to get the state to do everything though – credit unions are run by local communities for local communities. There are elements of what a Milibandist localism might look like in this policy too…
It also happens to be a bloody good policy. One that will strengthen institutions, shows the greedy vulture capitalists that Labour will stand up to them and provides another strong message that Labour can take out onto the doorstep. It’s also one helluva dividing line with the Tories, if you’re still in to that sort of thing.
You wait three years for a tangible, sellable policy, then you get a flurry of them. One assault on the cost of living per month until the election? That’s the new bar that has been set – we’re going to expect nothing less now.
And it also gives heart to those within the party who have campaigned long and hard for such changes that they will be listened to by the Labour leadership. Stella Creasy deserves special recognition for her work here (and has been recognised as such, by being given a role as what we might call “Wonga Czar”) – but there are tens of thousands of Labour supporters, community groups and activists across Britain who have worked hard to see this issue reach the national spotlight.
Today is a great day for them, and those who may now have a chance to escape the vice-like clutches of the Wongas of this world. And it’s a dreadful day for payday lenders who blight our high streets and prey on those who need our help most. A chunk of their profits will now be directly diverted to destroying their business model and booting them into the dustbin of history.