Thank heavens for Justin Welby!

For decades, interventions of the Archbishop of Canterbury in national debate were like a sporadic bombardment of small pebbles against the door of Downing Street. Justin Welby has changed all that. This week, payday loan companies are facing reform (or in some cases oblivion) as new caps on interest payments come into effect. That the industry finds itself in this position is thanks, in no small part, to it having been hooked around the neck by the Archbishop’s crosier.

Welby has inspired reform of the industry not by trying to set himself up as the leader of the opposition in a cassock, but by acting as an effective leader of the Church of England. His approach to the payday loan industry was not to demand that it be banned, he being aware that an even darker industry of doorstep loan sharks would replace it, but to compete with it head on. He took the church to the needy by supporting credit unions which will do the job of Wonga but without annualised interest rates of 5,853 per cent and threatening letters from fictitious firms of lawyers.

Welby’s intelligence on financial matters stands in direct contrast with that of his predecessor, Rowan Williams, whose pronouncements on current affairs so often came across as those of a lofty professor who had found himself in the wrong lecture hall. Straying from divinity to economics in a piece for this magazine in the middle of the 2008 banking crisis, Williams resorted to a generalised attack on markets and went on to demand a ban on short-selling. This rather missed the point that the traders who had been making money short-selling the shares of banks were only able to do so because they had spotted that the banks were in trouble before anyone else had. Their activities were a symptom, not a cause, of the banking crisis.