COUNCILS should be given the power to restrict the number of town centre shops offering high-interest short-term loans, according to MPs.

The past 18 months has seen a steep rise in the number of stores, which supply cash advances and ‘payday’ loans to people on low incomes, and those on benefits.

There are around 15 outlets in Blackburn, Burnley and Accrington, which supply short-term loans repayable at high interest rates.

Councils have little or no control over how many of these types of businesses launch in towns because they are classed as retail outlets, so if they move into premises previously filled by shops, they do not need permission from the local authority before setting up shop.

Hyndburn and Haslingden MP Graham Jones said councils should be able to make decisions without Whitehall interference.

“As far as I’m concerned there is not enough localism,” he said.

“It isn’t just payday loan companies - it’s off licences and a number of other establishments such as amusement arcades.

“Councils should be totally free to decide who does and does not set up a business.”

Pendle MP Andrew Stephenson said: “In East Lancashire we have a number of areas of deprivation where certain types of shops could be deemed inappropriate by councils.

“But I think that through the Government’s Localism Bill we are empowering local communities to make decisions on issues like this.”

A number of the outlets offer unsecured loans with interest rates in excess of 2,000 per cent.

Tony Duckworth, chairman of Blackburn Chamber of Trade, said they targeted ‘vulnerable people’.

He said: “Some of the terms and conditions in the small print make very unattractive reading to any right-thinking person, even those in desperate need.

“It is a cause for concern but evidently there is a call for their services.

“I would encourage people to be wary and to look at alternatives rather than jumping in and taking the carrots being dangled by these companies.”

Phil Ainsworth, of Blackburn’s Town Centre Partnership, urged people to shop around for the best rate if they had to use the services.