Welfare Reform Bill

I have some sympathy with the noble Baroness’s amendment—it would imply the creation of an appeals process for those applicants whose loan applications had been refused—not least because it will tease out the Government’s thinking on this issue. She has started from the premise that there ought to be an appeals process. It is slightly unusual to appeal because it is not about what the applicant has or has not done but is rather an omission to pay him a loan. Should that decision be opened up to question and challenge? Having posed the question, I cannot see any reason why it should not. It would increase openness and transparency, which we are all in favour of. The fact that a decision is open to challenge might act as an incentive to getting it right first time. As the noble Baroness has pointed out, the Peers’ information pack points to customer-care style complaints procedures and the FSA ombudsman as the likely regulator of the provider. However, if someone is not eligible for a loan or there are sound reasons for refusing one, then the applicant should not be able to bog the provider down in appeal after appeal. It ought to suffice that the reasons are made clear and the explanation for the refusal is made. Then there would need to be a limit on continuing to contest that decision, so openness on the refusal might be one way of making the procedures much clearer. I imagine that that is made all the more likely by the power allowed under new subsection (3), which allows for regional variations. Although I support the localism agenda and agree that it is right that in different circumstances areas will require different approaches, none the less, if it becomes apparent that one applicant is refused and learns that another applicant in a similar circumstance in a different area has had an application for a loan approved, there might well be feelings of unfairness. "The postcode lottery" is a phrase that often turns up in these matters as a counterbalancing to localism. If it is acceptable that there should be regional variations, it must be acceptable for different providers to apply their own criteria, as long as it can be explained and justified—perhaps through the medium of an appeal. Then perhaps we shall have the smoothing of some very ruffled feathers. I said that I was interested to hear what the Minister had to say about that because it must have occurred to the department that unsuccessful applicants would inevitably be very unhappy about being refused and might well cause a stir. The Bill is strangely quiet on what should happen next. Perhaps the Government were hoping that any problem would just go away. This is the Minister's opportunity to put the record straight.