MPs on the business and trade select committee have asked Asda for details of loans of up to £25,000 being offered to staff by Wagestream, in which the supermarket chain has a stake.
A holding company controlled by Asda’s private equity owner, TDR Capital, holds shares in Wagestream, which has been offering Asda workers services including savings pots and wage advances since 2023, according to a report in The Guardian. It started offering workplace loans to staff earlier this year.
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The default arrangements for Wagestream’s workplace loans involve debt repayments being directly deducted from employee pay packets.
The Guardian report stated that Asda did not inform staff about its financial link to Wagestream when it launched the service.
Chair of the business and trade committee Liam Byrne said he had written to Asda to “ask them to reassure us that frontline workers aren’t left facing sky-high interest rates and that its workplace lending is compliant with Asda’s legal requirements under employment law”.
He added that there was concern that Asda’s parent company was “piling pressure” on supermarket staff to drive profit to its financial investments.
In 2023, Asda financial director Michael Gleeson, told the committee that a £100m investment in Wagestream and two other financial businesses, had been funded from a £1.7bn sale of Asda warehouses, which the company now had to pay rent on.
Asda said it did not pay Wagestream for any services or receive any financial benefit if a member of staff uses the “financial wellbeing app”. The retailer added that all application for loans were subject to rigorous affordability checks and that fewer than 2% of employees had taken out a loan at a typical APR of 13.9%.
For the GMB union, however, the financial link between Asda and Wagestream was a matter of concern. National officer at the GMB Nadine Houghton said: “It leaves a sour taste in the mouth that TDR has a financial interest in the app that facilitates Asda workers taking these financial risks while also being the overall decision maker for how much these workers are paid and the hours they are able to work.”
Wagestream said in a statement that “as a regulated financial services provider, Wagestream has a conflicts of interest policy and has implemented processes to review and monitor conflicts of interest to comply with FCA [Financial Conduct Authority] rules.”
“TDR Capital’s holding in Wagestream does not create a conflict as it falls well below the thresholds set out by the FCA. As a minority shareholder, TDR Capital does not have operational or day-to-day control of any of Wagestream’s undertakings,” the statement added.
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