Mehdi's Morning Memo: Payday Loan Cap

LONDON, ENGLAND - FEBRUARY 05: MP MP Stella Creasy attends a photocall to promote One Billion Rising, a global movement aiming to end violence towards women at ICA on February 5, 2013 in London, England. (Photo by Ben Pruchnie/Getty Images)
LONDON, ENGLAND - FEBRUARY 05: MP MP Stella Creasy attends a photocall to promote One Billion Rising, a global movement aiming to end violence towards women at ICA on February 5, 2013 in London, England. (Photo by Ben Pruchnie/Getty Images)
Ben Pruchnie via Getty Images

The five things you need to know on Monday 25 November 2013...


The Government is to announce it will cap the cost of payday loans, after damning new statistics showed more than 60% are offered without proper checks on whether borrowers can afford to repay the loan.

The level of the new cap on the £2bn industry has not yet been fixed, and will determined by the new regulator, the Financial Conduct Authority (FCA). It will form part of the Banking Reform bill. The Treasury says it believes there is "growing evidence" to support the move, citing the fact that Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20%.

George Osborne told BBC Radio 4's Today programme this morning that he wanted there to be a "fair deal" from payday loans. "We've always believed in properly regulated free markets," he said. "We are on the side of hardworking people." The chancellor said it was "complete nonsense" to suggest he had been forced to act under pressure from Labour.

Today's big winner must be Labour MP Stella Creasy, who almost made payday loans her single issue campaign. "I am happy to pay tribute to individual MPs," Osborne conceded.


Royal Bank of Scotland is facing allegations of "unscrupulous" treatment of small businesses in a report claiming the lender drove firms to collapse to buy back their assets at rock-bottom prices.

Businessman Lawrence Tomlinson, who is entrepreneur in residence at the Department for Business, Innovation and Skills, said he had uncovered a dossier of evidence alleging that taxpayer-backed RBS has deliberately forced companies into default to seize their properties. The Daily Telegraph reports his report into small business lending practices across the sector contains explosive accusations against RBS, which have now been passed to the City watchdogs by Business Secretary Vince Cable.


President Barack Obama phoned Israeli Prime Minister Benjamin Netanyahu on Sunday, pledging future consultations with the U.S. ally regarding the nuclear deal made between Iran and six major powers that Israel opposes on Saturday.

The White House announced the call while Obama was aboard Air Force One en route to Seattle for a fundraising event. Netanyahu, who had warned of the deal's insufficiency in the weeks leading up to the agreement, told his cabinet the deal was a "historic mistake."

In a readout of the phone call, the White House said the president and prime minister reiterated their commitment to preventing Iran from obtaining nuclear weapons. "The President underscored that the United States will remain firm in our commitment to Israel, which has good reason to be skeptical about Iran’s intentions," the White House wrote.

Sanctions against Iran will continue to be "robustly" enforced, David Cameron has insisted, as the West seeks to assure Israel that it is serious about preventing the Islamic state getting a nuclear weapon.

A deal struck after lengthy negotiations in Geneva, Switzerland, commits Iran to curb its nuclear activities for six months in exchange for limited and gradual relief from some sanctions, including access to £2.5 billion (4.2 billion dollars) from oil sales.

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Alex Salmond's goal of setting up an independent Scotland in March 2016 could be hard to achieve because of the 2015 general election, UK cabinet sources have told The Guardian.

The paper reports: "Sources in the Westminster government and the anti-independence campaign said the UK government had no mandate to strike a deal with an independent Scotland, unless it won the general election in May 2015 after putting its proposals to voters in the rest of UK. The alternative would be for the main parties to agree a common position on key issues such as sterling, North Sea oil and debt before the general election, to avoid the uncertainty harming the British economy."


Opponents of the £50 billion HS2 scheme will have the chance to petition Parliament and have their case heard by a committee of MPs as part of a HS2 hybrid Bill being published today.

The Press Association reports the government has also published an "environmental statement" for the London-Birmingham phase one of the scheme. This document sets out in detail the likely significant environmental effects of the scheme. It will allow those on or near the line of route to see exactly how they will be affected and give details of the ways in which the railway has been designed to reduce, as far as practicable, impacts on the landscape.

The hybrid Bill is effectively the planning application for the scheme. It will give the Government the powers to construct and operate the railway. Opponents and supporters will both have the opportunity to put their case to Parliament.


@gabyhinsliff People who think politicians never do/change anything shd ask themselves if govt'd be acting on payday loans without @stellacreasy campaign.

‏@stellacreasy Sorry you had to wait three years did you George before doing anything? Only that millionaires tax cut seemed to go through quick..pfft!


Steve Richards in The Guardian: Politics is too valuable to be paid for by union barons, fat cats or Methodist ministers. It should be state funded

Kevin Maguire in the Daily Mirror: Ed Miliband's crucial role in Iran nuclear peace deal

Con Coughlin in The Daily Telegraph: Is Iran about to return to the fold?

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