Regulation needed

There are those, usually well-paid and well-connected, who condemn pay day loan firms with a vengeance bordering on total contempt.

These are often people, like the City regulator and some politicians, who jump on their moral pulpits and condemn the admittedly high interest rates some pay day loan firms charge, while ignoring the 25 per cent to 45 per cent rates charged by some credit card and store card providers.

The fact is that, even in a prosperous nation such as Britain, there are some families (and individuals) down on their luck.

One only has to look at the growing food bank queues to see that desperation has reached levels with some families that they cannot even accept handouts from the food banks because they are unable to afford the gas and electricity to cook the meals.

Some people may want to apportion blame, that the victims are lazy, that if Eastern Europeans can come over and get jobs those people can also.

Whatever the reason given, the harsh truth is that these people are still marginalised.

Those who have young children impose an even greater moral burden on us as a society: should the shortcomings of the parents be visited on the children?

We all know that a large number of pay day loan customers are young men and women who, in the main, are in work, but just want to live recklessly above their means. The price they pay is extortionate interest rates.

Of course, some of the rogue pay day loan firms need firmer controls, even outright banning, but these firms provide emergency funding for desperate people who have no institution or relatives to turn to.

However, we must be careful not to throw out the baby with the bathwater. Either the state provides emergency funding for the desperate, or commercial firms will.

The big question is, under what regulatory conditions?