Clause 13
Welfare Reform Bill
6:30 pm
Paul Rowen (Rochdale, Liberal Democrat)
As the hon. Gentleman said earlier, in respect of an aspect of amendment 55, we have already had an assurance from the Government that interest will not be charged on loans. To save time later on, I shall make some general remarks about clause 13 because it raises important issues.
It is important to look at the time scale that the Government have used after 10 years of inactivity with regard to the social fund. A consultation was launched in December 2008, but people were given less than three weeks to respond to it, which is one third of what the Government’s code of practice says should be the norm for any such consultation. Before Christmas, an article in The Guardian suggested that ridiculous interest rates would be charged, but the Government have thankfully squashed that idea. However, we now have a situation in which the Government say that they are going to carry out further consultation.
I respectfully suggest to the Government that, given the complete mess that the policy appears to be in, the most appropriate approach would be to withdraw clause 13 completely, carry out a proper, meaningful consultation, discuss the matter with claimants—the people who will actually be affected by such change—and then come forward in the future with proposals that will work. It is clear, given what has happened, that the proposals will not work.
Who will be the providers? We know that the private sector has made it clear that
“in the current economic climate”
—I am quoting the KPMG report—
“they would not wish to fund a model lending to a deep sup-prime sector.”
If the Government were to say, “We will go to non-governmental organisations”, that would have some merit in the long term, but NGOs are saying that although they are pleased to contribute, they have received extremely short notice and they would need longer to talk about it. If the Government are serious about wanting other providers to run the social fund, this matter needs to be set in context with a set of supports—whether financial advice or whether linked to other issues—before we make such a change.
There could be merit in that proposal and in introducing external providers, including NGOs and charities, and having them running the social fund, but the proposal, as it stands, is half baked. With respect, it is a classic example of what we heard about earlier: not putting into the Bill provisions that could lead to complications. The Government have not thought out what they are doing or how the proposal is going to work, and the Bill does not include sufficient detail to make a proposal work, should they want to introduce one. It would be far more sensible if the Government withdrew the clause, went back to the drawing board, and introduced a measure when they had a workable proposal.