UK
26/07/2013 09:54 BST | Updated 27/09/2013 14:52 BST

Wonga Investment Is 'Embarrassing' But Church Has To Live In Real World, Says Justin Welby

The Archbishop of Canterbury Justin Welby has said he was "embarrassed and irritated" after it emerged that the Church of England helped to fund the payday lender he wanted to drive out of business - but said he realised the Church had to be part of the "real world".

"I was irritated for a few minutes but, you know, these things happen. I understand the business, it's an incredibly complex business," he said.

Welby said that, of all the payday lenders, he believed Wonga was a "professional" organisation. "Wonga is actually a very professionally managed company. Errol Damelin, the chief executive, is a very clever man, runs it extremely well.

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Justin Welby says he is 'embarrassed' about the Church's links to Wonga

"What Wonga says, and I agree with them, is that if we try and cap interest rates and drive them out of business, people in deprived ares will end up with the loan sharks who are much worse, a totally different kettle of fish," Welby told the BBC's Radio 4 Today programme.

Although the amount of Church money indirectly invested in Wonga was £75,000 out of investments totalling £5.2 billion, it has proved embarrassing for the Archbishop, who had spoken out against the payday lending industry.

He said: "Now, it shouldn't happen, it's very embarrassing, but these things do happen. We have to find out why and make sure it doesn't happen again."

The church has ethical investment guidelines, Welby explained, which meant it was "allowed to invest in a company where less than 25% of its business is in this area."

Other guidelines, with different, lower percentages, allow investment where companies might be connected with pornography or gambling.

"Is a little sin tolerable? No it isn't. I am not in favour of sin, for the record. All sin is bad," Welby said when probed over these guidelines.

"But the reality is the complexity of the markets means that a lot of companies get involved in things at a very small level, indirectly. You invest in a company who makes socks, who then might sell some socks to an army. It's hard to avoid.

"If you invest in a hotel chain, a lot of these hotels sell pornography in hotel rooms, so do you not invest in any hotel groups? It is very complicated.

"You are right, we can't say we tolerate bad things but we have to live in the real world and you can't escape the complexity. We have to be involved in day to day life, and say how do we live in the complexity of life today?

"It is a complex world, we spend our lives dealing with complexites as a vicar, dealing with people whose lives are very complex. We get it wrong pretty often, we don't stand on the sidelines or on a podium lecutring everyone else."

His frankness in the interview drew a lot of positive comments on social media:

Welby said he would be looking to overturn the investment in Wonga: "We should not be investing in this at all and I will put it to the church commissioners. We are not the Curia.

"What's clear is that... this is an embarrassment. We think that the payday lenders charge vastly excessive amounts for the loans they make, that there is a totally inadequate range of choice for consumers in deprived areas."

"I've seen it, I've lived in these areas and worked in them. I've had staff who have got caught up in it and have had to be helped and had their lives destroyed by it. This is something that really matters to me."

Asked if capitalism was amoral, he said: "I don't think capitalism is necessarily amoral, it can sometimes be immoral but it is not of itself immoral."