Fresh rules bid to curb payday loan shops

Kezia Dugdale. Picture: Greg Macvean
Kezia Dugdale. Picture: Greg Macvean
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NEW rules to help crack down on the spread of payday loan shops are to be discussed at a special summit on the issue.

Among the ideas expected to be considered are excluding the controversial firms from receiving business rates relief and changing planning rules to make it easier for councils to refuse them permission.

Lothian Labour MSP Kezia Dugdale, who has campaigned against exorbitant interest rates charged by payday lenders, welcomed the summit.

Current rules allow the “legal loan sharks” to move into high streets without having to get permission for change of use on the premises.

Ms Dugdale said payday firms often targeted areas where people were struggling to make ends meet and pointed out there were nine loan shops within 20 minutes of each other at the bottom of Leith Walk.

Giving planning committees the power to block new payday loan shops in areas where there was “over-provision” would probably be the easiest approach, she said.

However, another option could be to put payday lenders into a special category along with amusement arcades, hot-food shops and taxi offices, involving a separate planning process.

She said: “It would mean every time they wanted to open a new one they would have to go through a full consultation.

“Introducing a rule on over-provision would help places like Leith, where there are already a lot of these shops, but I would also like to stop payday loan shops setting up and the best way to do that is to give communities the power to decide whether they want payday loan shops in their high street.

“If it’s a choice between a that and an empty retail unit, I think many people would choose an empty retail unit.”

Ms Dugdale said recent announcements from Westminster about a cap on the cost of payday loans had yet to be fleshed out.

“They haven’t told us what the cap is going to be,” she said. “A cap is not going to shut these companies down or solve people’s debts overnight.

“We need action at all levels on this – from the Westminster cap right down to action by local councils to protect 

The summit, which will also consider tighter controls on betting shops, was announced by Local Government Minister Derek Mackay during a debate in the Scottish Parliament about an action plan to revitalise town centres.

Mr Mackay said: “Town centres are important. They offer us a base for small businesses and jobs, support local economies and offer space for community and civic functions. Town centres give a town their identity.

“I am concerned by the increase in payday lending and gambling businesses on our high streets. Solving this requires working with partners in local government and elsewhere. A great many people are involved in maintaining the health of Scottish towns. That is why I want to bring key organisations together to
discuss how we tackle this problem.”