Cllr Claire Hickson: Stopping the spread of payday loan shops on Southwark’s high streets
London councillor and Co-Chair of the Southwark Co-operative Party Claire Hickson describes the work she has been doing to halt the spread of payday loan shops in her community and promote credit unions as an affordable co-operative alternative.
Last week, I went to Southwark’s planning committee for a second time to ask my fellow councillors to reject an application for a payday loan shop on Tower Bridge Road, a high street in my ward. I am delighted to say that, for a second time, they agreed.
The company had applied for a change of use so that they could turn an empty shops into the first payday loan shop on this street. As the only Labour councillor in the area, I worked with members and residents to lodge enough objections to get the application discussed by planning committee.
Our case was based, in part, on our fears about the impact on local residents. As stated in the application by the payday loan company, social housing residents on the estates either side of the high street were going to be the main customers for this shop. Southwark suffers from high levels of deprivation and many of these residents have been and will be hit by the massive changes to welfare reform that are about to take place. They can’t afford the interest rates charged by these companies.
Our argument was broader than that, however, arguing that the shop would send negative messages about the future of this high street. Southwark has just awarded just under £500,000 from our Community Restoration Fund to business networks across the borough to help our high streets and town centres that are struggling in the recession and were further damaged by the disturbances last summer. As Southwark’s Cabinet Member for Communities and Economic Development, I am responsible for our support to high streets and town centres. As a ward councillor, I worked with local businesses on Tower Bridge Road to develop their business association and bid for the fund.
As one local objector said, it would be ‘disastrous’ if this high street ended up being ‘blighted’ like others by a ‘plethora’ of such shops as they have been elsewhere.
Other councillors expressed a broader concern that Southwark’s town centres are becoming dominated by betting, payday loan and other financial service outlets at the expense of other forms of retail.
We therefore argued that this application did not represent ‘sustainable economic development’ which the new National Planning Policy Framework (NPPF) demands is at the core of all planning decisions. We used the fact that the NPPF states that its contents are a “material consideration in planning decisions” at all levels, allowing us to use it rather than local plans to object to the decision. The NPPF also says that “where town centres are in decline, local planning authorities should plan positively for their future to encourage economic activity”. The payday loan company cited examples from elsewhere in the country where inspectors had overturned decisions similar to ours but the discussion of this in inspectors’ reports was lacking in detail and didn’t provide convincing evidence of why they considered these shops to contribute positively to local economic development.
We can’t ignore the fact, however, that such shops meet a demand for credit from people who are unable to get it elsewhere. As one fellow councillor highlighted in the meeting, we do not want to drive people into the hands of other, even less scrupulous lenders.
This is why it is vital that we support other sources of credit that are accessible by those who might otherwise rely on payday loans.
My family’s relationship with the Labour movement began with the Co-operative movement and party. My grandfather worked for the Co-operative Society and was an active member of the Co-operative Party. My father remembered delivering election leaflets for the party as a boy.
As a member myself and co-chair of the Southwark branch of the Co-operative Party, I am pleased to see our local credit union, the London Mutual Credit Union, offering its own form of payday loan at much lower rates.
The challenge, locally, is to ensure people are aware of the fact that these healthier forms of credit exist and are available. It is very difficult for a small co-operative to compete with the profile of the likes of Wonga and the Money Shop but we have to do what we can. That is why Southwark Council and London Mutual are working together on how best to promote alternative products in the future.
Cllr Claire Hickson is Southwark Labour councillor for Chaucer ward and Cabinet Member for Communities and Economic Development. She co-chairs the Southwark branch of the Co-operative Party. Find her on Twitter at @ChaucerClaire