The Church Commissioners, the £5.5bn (€6.4bn) Church of England investment body, has become embroiled in an embarrassing row over its small shareholding in a so-called payday loan firm, illustrating what Archbishop Justin Welby calls the “complexity” of capitalism.
Welby, the Archbishop of Canterbury, said this week he wanted to put the firms out of business. But he has been tripped up by a £75,000 (€86,931) shareholding in Wonga, the most prominent high interest rate lender, which the Commissioners hold via a pooled fund of funds investment in Silicon Valley venture capital firm Accel Partners, which led fundraising for Wonga in 2009.
The story has been front-page news in the UK, with the Financial Times calling the affair the “Parable of Wonga”. Welby went on to the BBC to explain his position and said he was calling for a review.
Welby’s office said in a statement: “We will be asking the assets committee of the Church Commissioners to investigate how this has occurred and to review the holding.”
“We will also be requesting the Church Commissioners to investigate whether there are any otherinconsistencies as normally all investment policies are reviewed by the Ethical Investment Advisory Group.”
Welby pointed out to the BBC that the Commissioners are part of a consortium bidding for Royal Bank of Scotland branches to create a “good bank”.
“I don’t think capitalism is necessarily amoral,” he said, citing the altruistic founders of chocolate firm Cadbury and Barclays Bank.
The Church Investors’ Ethical Investment Advisory Group’s stance on payday lending is clear. The group stated in December 2011 – during the tenure of Welby’s predecessor Dr. Rowan Williams – that its revised policy on high interest rate lending excluded “specialised high interest rate lending, in particular payday and pawnbroker loans”.
James Featherby, the Chair of the EIAG, said at the time that the EIAG was “not prepared to sanction investment by the Church’s investing bodies in companies charging triple-digit interest rates to some of the most vulnerable customers of the financial services industry”.