Welfare Reform Bill

The noble Baroness’s amendment at first blush appeared to be surprisingly right-wing for an amendment tabled by the Liberal Democrats. Although I do not say that pejoratively, I accept that it is a probing device to question the eligibility of individuals to apply for and receive a loan from an external provider. The proposed idea that such a person would need to derive their income wholly from benefits is too restrictive. The point of the Social Fund schemes is to step in as a kind of safety net to provide emergency funds to those who find themselves in a very precarious position—as a lender of last resort, one might say. Plainly, that facility cannot be available to everyone in the country, because it is not, nor should it be, the business of the state to legislate for providers to supply social loans without question. It is for that reason—because people who are in receipt of benefits are already being taken care of by the state, after a fashion, and are therefore owed a particular duty of care by the state—that the Bill allows for categories of persons eligible and the nature of the loan to be prescribed under new Section 140ZA. The question asked by the noble Baroness, which I echo, is for the Minister to give your Lordships more of a clue as to the kind of the person whom the Government consider ought to be eligible for a social loan. What proportion of income should be derived from benefits before a person becomes eligible for a loan? In other words, what benefits will be prescribed under new Section 140ZA(2)(a)? The point of social loans is to help people out of a precarious situation on a temporary basis, as the term "loan" suggests. The support and advice that they get along with it will be vital, almost regardless of who actually qualifies for a loan, as I said on the previous group of amendments. It is important that people receive financial advice so that they might climb out of the hole that they are in and, I hope, prevent themselves falling back into it. I expect that such advice and support might cost money. If the Government intend to provide that kind of service to the very needy, will it be paid for out of the existing Social Fund budget? If so, will that substantially reduce the amount of money available to Social Fund borrowers and will that in turn have an effect on the stringency of the eligibility criteria?