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Lord Rooker: My Lords, perhaps I may start first on a winner—Amendment No. 12—because I moved my pages around as noble Lords spoke. It seeks to ensure that a loan can be made by instalments. We are intrigued by the amendment and at first glance what we understood to be the motivation behind it would appear to have considerable merit. There is no question about that. However, although we have included a provision on the face of the Bill to prevent a refugee receiving more than one loan, in the case of a larger loan there may be much sense in staging payments to the applicant.

It is the impression that the spirit of the noble Baroness's amendment could be achieved by the clause as drafted: by conferring a discretion on the Secretary of State to make a loan by instalments. This might go
 
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some way to providing a reassurance, but we are going to take that amendment away and look at it. I hope to come back with further clarification at Third Reading.

The rest is not all negative, but I thought I would start with that amendment because it was my best shot. I hope that I can satisfy noble Lords with a little more detail than I was able to give on the first two or three amendments.

Amendment No. 10 seeks to amend those matters that the Secretary of State may take into account in determining whether or not to make a loan from those that appear to him to be relevant to those that he has reason to believe are relevant. We discussed the matter in Committee and we discussed a similar amendment in relation to Clause 10. I hope to provide further reassurance that we believe the amendment is not necessary.

I have explained that in relation to Clause 10 we continue to believe that in practice there is no difference between the wording that appears in the Bill at present and that proposed in the amendment. Where it appears to the Secretary of State that a matter is relevant, I think we can also say that he has reason to believe that that is the case.

From our previous discussion of the amendment, I understand that the noble Baroness seeks reassurance that the decision to make a loan will be based on objective grounds. As I will explain in more depth in response to the next amendment to the clause, the Government are keen to ensure that matters to be taken into account by the Secretary of State are sensitive to the particular features of refugees. Of course, the Secretary of State will have to act reasonably in determining matters that shall be taken into account when considering the loan application.

Amendment No. 11 seeks to add two further matters to those that the Secretary of State may specify in regulations that he shall take into account in determining whether or not to make a loan. These are,

and,

The Government are aware that refugees are newcomers to the country and in many cases have not had either the time or the means to establish the necessary credit-worthiness to access low-cost loans through the commercial sector. It is self-evident that before they become refugees they cannot work. That is not to say that they are completely asset-free. Although the Home Office has no desire to enter the banking industry, we do wish to ensure that refugees can access a fund to help them establish themselves in the UK. It is important therefore that the criteria used to assess whether or not a loan should be made recognises that refugees cannot be considered against the same criteria applicable to the rest of the population. It is important we give this careful consideration if we are to identify criteria which do not militate against refugees receiving a loan.
 
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Furthermore, the Government wish to make loans according to need and may wish to take into account a person's income and assets. I believe that in doing so it would make sense to consider the demands placed on the income and assets, such as the obligation to care for a child or dependent relative.

The Government wish to move towards a system that allocates funds on the criterion of need, but it is important to balance that with administrative costs. I have no doubt I shall be reminded of that sentence when we come back to the subject we debated in the first group of amendments today. Noble Lords are aware that the loan scheme will be funded solely from savings made from the abolition of back payments. We are committed to identifying a system to disburse loans which costs as little as possible in terms of administration, thereby leaving as large a proportion as possible for refugees. I emphasise that the loans will come from the savings. Therefore, so as not to undermine what I said about the first couple of groups of amendments and so as not to have my words thrown back at me, a financial "curtain" will apply.

The list in subsection (3) is not intended to be exhaustive; rather, it is an illustration of matters which the Secretary of State may include in regulations as matters that he shall take into account when determining whether or not to make a loan. It will be for regulations, subject to the affirmative resolution procedure, to reflect the detailed consideration being undertaken at present by the Home Office, the Treasury and the Department for Work and Pensions.

Amendment No. 13 seeks to remove the word "interest" from Clause 13(3)(d) and replace it with the words,

As I explained in Committee, the Government do not, at this stage, have any intention of charging interest on refugee integration loans. However, we think it is important that the Secretary of State has the flexibility to make provision about interest in the event that it is needed in the future. Should a decision be taken to charge interest on any loan in the future, I would expect comparisons to be drawn with other loan schemes in operation across government, such as the student loan system. Certainly, in the event that it was decided in the future to charge interest, I believe that it would be a "low-cost" loan under the terms of the Consumer Credit Act. Any future interest rate attached to the loan scheme would be in regulations, subject to the affirmative resolution procedure.

As drafted, Clause 13 enables the Secretary of State to make provision in regulations about interest, should that be necessary in the future. We do not consider the elaboration of the amendment to be necessary on the face of the Bill, and we ask that it is not proceeded with. I hope that what I have said will be sufficient in that respect.

Amendment No. 14 seeks to make it mandatory for the Secretary of State to attach conditions to the use of a loan. It is intended that the refugee integration loan will be used on items and activities that facilitate
 
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integration. Those could include a deposit for rented accommodation, vocational training, work tools or clothes, and furniture and so on. That is by no means an exhaustive list; it is simply an illustration and a flavour of the Government's intention regarding the use of the loan.

It is important that we retain sufficient flexibility to make a loan for a purpose which facilitates integration but which has not been thought of before. People can be very innovative. They get on their bikes, as it were, and reach this country through all the barriers. Many innovative, entrepreneurial people are out there and they will think up reasons for wanting to integrate activities which we would never think of putting in legislation but which we would want to support. Therefore, we need flexibility, and we do not think that it is right to place a mandatory duty on the Secretary of State to make regulations specifying the conditions which will be attached to the use of the loan.

Amendment No. 15 seeks to remove the regulation-making power which enables a discretion to be conferred on the Secretary of State. I reassure noble Lords that the intent behind subsection (3)(i) is to confer a discretion on the Secretary of State for the purposes of a refugee integration loan. That, and only that, is what the discretion is about. The inclusion of this provision is merely a safeguard to ensure that the pot of money available for disbursement of refugee integration loans can be targeted to refugees who need most help with their integration. Of course, in exercising that discretion, the Secretary of State will have to act in accordance with the regulations and with more general public law principles. Again, as noble Lords would expect, the detail of this provision will be devolved to secondary legislation, where the extent of the discretion will be set out in regulations and will therefore be clear and transparent for all to see.

I thought that I was to respond to one other issue. I may have missed one out but I think that I have covered the points raised in the amendments. I hope that I have given more detail of the way in which we intend to operate the loan and of the purposes of the loan. It is not a loan for all or a loan for any purpose; it is for refugee integration. That is its central purpose.


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