Payday lending rates: Julio Martino and Stella Creasy

A payday lender who charges 296% on loans said the APR figure came from a "complicated formula" and "never kicks in" as customers repay their loans within days.

Julio Martino was debating rates, and a possible advert ban for the services, with Labour MP Stella Creasy who backs a cap on loan rates.

She said some firms offered poor affordability tests and aggressive marketing, practices which needed to be wiped out.

Former Home Secretary David Blunkett also said that the government "nearly cracked it" six years ago, but was stopped by the "global meltdown".

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