Welfare Reform Bill

I thank the noble Lord, Lord Taylor, for this amendment, which gives me an opportunity, I hope, to give him the reassurance that he anticipated I would seek to do when moving the amendment. I appreciate that, by tabling Amendment 126, he is seeking to put beyond doubt the Government’s intention that we would not allow an external provider to charge interest on any social loan made by that external provider. My right honourable and honourable friends in another place have made the Government’s position clear on this matter on a number of occasions and I can add to that assurance that our position remains unchanged. We would not permit interest to be charged. Our intention is to make arrangements with external providers to make social loans. We will not allow them to charge interest, but we realise that there must be a financial incentive to undertake this work. This is why subsection (4) of the new section provides for the Secretary to State to make payments to lenders in respect of the sums required to make loans and payments in respect of the expenses of the lender, which in different circumstances would be covered by interest charges. Amendments 129 and 130 are about the provision for the repayment of external provider social loans. Specifically, the part of the Bill which these amendments seek to change is the provision to make regulations for the recovery of these loans. We have already said that we intend to have further discussions about some of the detail of how external provider social loans will work in practice. We also have to consider how what might go into the regulations will sit alongside the detail of the contract between the Secretary of State and an external provider. In particular, we will want to look at the provisions around recovery of external provider social loans, such as the priority given to an external provider loan in relation to other debts. We will also wish to consider in more detail the arrangements for recovery when a borrower moves off benefit into work and what specific recovery arrangements may apply in these circumstances. While I appreciate that the noble Lord, Lord Taylor, in particular has concerns around the number of regulation-making powers in the Bill—certainly his colleague, the noble Lord, Lord Skelmersdale, has expressed that point of view on a number of occasions—and that these amendments would reduce the number of new sets of regulations, I cannot be sure that we will not need new regulations. I can, however, reassure him that when we have finished considering the details around recovery and decided what regulations should say, we will amend existing regulations rather than introduce new ones, if that proves practical. I hope that that has covered each of the noble Lord’s points, but I would be happy to try to answer further, if it has not.