Labour says the Church of England should actively raise “ethical questions” with one of Wonga’s key financial backers after it emerged the Church is an investor through its pension fund.
Last week, Archbishop of Canterbury Justin Welby unveiled plans to roll out a credit union through his 16,000-strong church network to compete with payday lenders such as Wonga.
However, it emerged the CofE pension fund invested in Accel Partners, a US venture capital firm which handled Wonga’s 2009 fundraising.
Around £75,000 of the Church’s £3.5bn pension fund was invested in the US firm and Welby admitted he is “embarrassed” by the revelations.
The Church says it runs an ethical investment policy whereby it does not invest in payday lenders and pledges to investigate the “serious inconsistency”.
Shadow business minister Baroness Diane Hayter called on Wonga to “clean up its business model” and for the Church to exert its influence as a shareholder of one of its backers.
She says: “The Church’s investment in Wonga of course does not undermine its case but it would be nice if it exercised any rights it had by virtue of this holding to turn up at the AGM and raise ethical questions.”