Council prepares to block ‘payday lenders’

By Kaye Wiggins

Lambeth council has launched an investigation into the impact of “payday lenders” on the Brixton economy, in a bid to block them from opening new branches in the area.

Officers are compiling evidence about the ways in which the shops can harm other local business. The council intends to use this evidence in court if it is challenged for stopping the shops from opening.

Ed Davie
Ed Davie

Labour councillor Ed Davie (left) told the Brixton Blog: “There are now more than 10 payday loan shops within five minutes of Brixton tube station.

“The only way I can see of stopping these firms from opening more branches is by classing them as ‘unsustainable development’ when they apply for planning permission. But you need the evidence to do that.”

Cllr Davie said neighbouring Southwark council had attempted to take the same step with a payday loan shop near London Bridge, but had lost its case on appeal because it could not prove the firms were “economically unsustainable”.

He said the council was carrying out an payday loans investigation similar to one done recently by leading economists who looked into the impact of betting shops. The economists’ work showed every betting shop in Lambeth with a fixed-odds betting terminal caused a net loss to the economy equivalent to two local jobs.

“That’s because of the money that is being sucked out of the economy,” he said. “If people are spending all of their disposable income on betting, it cannot be spent in other local businesses such as cafes, shops, pubs and supermarkets.

“We want to do a similar piece of research showing the impact of payday loan shops. Their argument is that they create jobs but if we can show their actual impact is damaging to local jobs overall, we will have a strong case to block future planning applications from them.”

He said he hoped the evidence would be ready in a few months’ time.

Brixton Blog has approached some of the larger payday loan firms for a comment but has not yet received a response. However, we would be happy to publish responses from the firms – these should be sent by email to 


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