Clause 17 - Section 16: further provision

Welfare Reform and Work Bill – in a Public Bill Committee at 12:00 pm on 15th October 2015.

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Amendments made: 118, in clause 17, page 15, line 40, leave out “pay mortgage interest” and insert “make owner-occupier payments”.

119, in clause 17, page 15, line 42, leave out “property” and insert “particular accommodation”.

This amendment is consequential on amendment 110 which replaces a reference to property occupied as a home with a reference to accommodation occupied as a home.

120, in clause 17, page 16, line 5, at end insert—

“( ) provision about entering into an agreement (which may contain such terms and conditions as the Secretary of State thinks fit, subject to what may be provided in the regulations);”

This amendment makes clear that regulations under clause 17(3) may make provision about entering into agreements with persons receiving loans, and the Secretary of State may determine the contents of such agreements.

121, in clause 17, page 16, line 8, leave out “the”.—(Guy Opperman.)

This amendment is consequential on amendment 120, which refers to the Secretary of State determining the contents of agreements with persons receiving loans.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I beg to move amendment 135, in clause 17, page 16, line 13, at end insert—

‘(4) The regulations must make provision for persons applying for a loan to have access to financial advice, which must be provided free of charge by an organisation independent of the qualifying lender.’

To require that those applying for a loan must have access to free and impartial financial advice which is independent of the lender to whom the application is made.

The amendment stands for itself; it is not complicated. It requires those applying for a loan to have access to free and impartial financial advice independent of the lender to whom the application is made. Given that the Department will not be dealing with the loans and will be asking various other organisations to be responsible for such loans, the amendment is consistent with the principle of having free and independent advice. When the coalition Government decided that people should be given access to their pension pots to buy a Lamborghini, they agreed that there should be independent advice before people made such important decisions, so we ask for poor pensioners and disabled people to be given independent advice before they are asked to take out loans.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

Clause 17 allows the Secretary of State to set out in regulations further details regarding the support for mortgage interest loan scheme, including the Secretary of State’s ability to contract out certain functions of the scheme to a third party, such as for the provision of financial advice. To be clear, the Department will administer and provide loans, but the advice and recovery will be provided by a third party, which will be chosen in an open and transparent way so that everyone can see that an independent arm’s length body is providing that advice.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

That is very interesting and helpful. Will the advice be free?

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

That is a matter to be decided.

The hon. Lady’s amendment seeks to set parameters for the advice: who will provide it, and what it will entail. It is the Government’s intention that the regulations should set out the details of that advice, including the type of provider that we will appoint. We also intend for  the advice provided to be broad, including available options other than taking out a loan, the implications of taking out a loan and whether people need to speak to potential beneficiaries of their will who might be affected by their decision, so that they can make a fully informed decision about whether to take out a loan. The amendment is restrictive, as it would prevent the Government from providing the broad advice necessary to claimants when they are considering taking out a loan. I hope that the hon. Lady will withdraw it.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I will, but we will want to hear before Report whether the advice will be free. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I beg to move amendment 136, in clause 17, page 16, line 13, at end insert—

‘(4) The regulations must provide for persons in receipt of Support for Mortgage interest at the time the regulations come into force to continue to receive these payments for a period of no less than 12 months before they are required to apply for a loan.’

To require that regulations setting out transitional protections for existing claimants of Support for Mortgage Interest must include provisions requiring payments to continue to be made on the basis of the current framework for at least 12 months following the date on which the regulations come into force, before they are expected to apply for a loan.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

With this it will be convenient to discuss Government new clause 13 and Government amendment 129.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Amendment 136 asks for a 12-month grace period. The Government say that there will be a transitional period, and we think it right for existing claimants to be given 12 months in which to work out the implications of the new necessity of taking out a loan in order to pay off another loan. They need a certain period to get their house in order—to coin a phrase—and to get themselves proper advice. We ask for a 12-month grace period before they have to take out a loan.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

The hon. Lady’s amendment would allow existing claimants who are receiving help with the cost of their mortgage interest payments as a benefit to continue to receive that help for at least a year after the new loan scheme has been introduced by regulations. That would effectively allow existing claimants a grace period before they are required to decide whether to continue receiving support for their mortgage interest as a loan. Given that many such claimants have received help with their mortgage as a benefit for some time—in many cases, decades—it would simply be unfair to continue to provide them with help in the form of a benefit while new claimants are offered loans for the same purpose.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

Can the Minister point us to the evidence showing that some people have been receiving assistance for decades?

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I do not have that evidence to hand, but I am quite sure, given that the Department is responsible for paying the benefit, that it is there, and therefore that the measure is based on evidence. We all know people who have been on benefits for many years, in many  cases for very good reasons, but it is a fact that many people out there have been on benefits for many years, so we must accept the reality of the situation.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

The Minister has suggested that the evidence exists but he does not have it to hand. Will he make some of it available to the Committee?

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

First, I pay tribute to the hon. Gentleman, who has a distinguished record in the charitable sector. I take this opportunity to commend him and the hon. Member for Birmingham, Yardley, who also has a charitable background. Many people do such work but it gets very little recognition, so I am happy to give that recognition both to colleagues and to the hundreds of thousands of people working in that sector.

As for the evidence, it is abundantly clear that many millions of people are claiming benefit. It is also a fact that, in the election last May, this Government were given a mandate by the people of this country to put forward these reductions and cuts.

Photo of Debbie Abrahams Debbie Abrahams Shadow Minister (Work and Pensions)

With respect, it is quite clear that the scale of the cuts being proposed was not one of the issues put to the public. The proposed cuts were published only after the general election, so for the record that is a very misleading statement to make—[ Interruption. ]

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Order. I am sure the Minister will correct things if he has unintentionally misled the Committee.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I have not misled the Committee. It is a fact that the Government said that we would make £12 billion of reductions from the welfare budget, and it was on that basis that the people of this country, in their millions, voted for this Government as a majority Government and gave us the mandate to make those £12 billion of reductions in the welfare budget, as we are doing.

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

The Prime Minister also gave a commitment not to reduce tax credits, so I look forward to that commitment being implemented by the Government. To return to my previous point, where is the evidence for this Committee about decades-long benefit entitlement? [ Interruption. ]

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Order. The Minister has been asked a specific question. I do not want the debate to broaden out to the topic of the general election.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

The fact is that we have a mandate from the people of this country to make reductions to the welfare budget. That is what we are doing. This measure will save—

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Order. I am sure that the Minister is going to come back to the provisions before us.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I will. This measure will save £250 million. I regret to say that, were it not for the incompetent Labour Administration who put this country in the mess it is in, we would not be having to take the tough decisions that we are now.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Order. Will the Minister take his seat for two seconds, please? Our debate is, I feel, repeating the general election debate. We have specific measures in  front of us, and the Minister has been asked a question about evidence. If he could deal with that then move on, that would be useful.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I have answered the question. It is a fact that millions of people are claiming benefits. We said specifically in our manifesto that there would be £12 billion of cuts. That is what the measure is all about.

Government new clause 13 will enable the Government to put in place, by way of regulations, a framework to support the transition from the current provision of support for mortgage interest as part of the individual’s benefit entitlement to the new system of loans. It is a simple transaction: instead of a benefit, it becomes a loan. The new clause will ensure that the Government can manage the introduction of support for mortgage interest as a loan—in particular, the migration to the new system of those currently receiving support for mortgage interest as a benefit—as they see fit.

In particular, the new clause includes provisions to allow a phased approach to the introduction of support for mortgage interest loans should that prove necessary. It makes it clear that regulations may make provisions about the timing of the transition to the loan system both for new claims and for individuals currently receiving support for mortgage interest as a benefit, and provides that that can be achieved by the issuing of notices to those individuals. Notices may be issued by reference to the area in which an individual lives or the type of qualifying benefit that the individual receives.

Our intention is that existing claimants should be notified well in advance both of the implementation of the changes and of when they will be affected, and that they should be provided with financial advice so that they are aware of the alternatives to receiving a loan and the implications of doing so. Advice will include discussion of the claimant’s financial position, both now and in future, confirming their understanding of the terms of the loan and encouraging them to engage with any beneficiaries there may be in due course.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Westminster Group Leader (Fair Work and Employment) 12:15 pm, 15th October 2015

I will make this brief. In Scotland, people did not vote for the Conservative manifesto or the Conservatives’ austerity cuts—more than 50% voted for the SNP. However, on the specific point I asked about—I apologise if I missed the answer—what discussions has the Minister had on the clause with the Scottish Government? It will affect people in Scotland.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I will happily answer that question. There has been contact at official level, and the engagement will certainly continue with the Administration in Scotland.

Government amendment 129 is a straightforward technical amendment, which will ensure that new clause 13 has the same extent as clauses 16 and 17 and apply to England, Wales and Scotland. I hope the hon. Member for Islington South and Finsbury will withdraw the amendment and accept Government new clause 13 and Government amendment 129.

Photo of Emily Thornberry Emily Thornberry Shadow Minister (Work and Pensions)

I have nothing to add, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 122, in clause 17, page 16, line 16, leave out “pay mortgage interest” and insert “make owner-occupier payments”.

Amendment 123, in clause 17, page 16, line 19, leave out “pay mortgage interest” and insert “make owner-occupier payments”.

Amendment 124, in clause 17, page 16, line 28, leave out

“in respect of the mortgage interest”

and insert

“in relation to which the amount is paid”.

Amendment 125, in clause 17, page 16, line 39, leave out from “is” to end of line 40 and insert

“liable to make owner-occupier payments under more than one agreement to make such payments.”

Amendment 126, in clause 17, page 16, line 46, leave out subsection (7).

Amendment 127, in clause 17, page 17, leave out lines 29 to 32.—(Guy Opperman.)

This amendment removes definitions that are no longer needed for clause 17.

Question put, That the clause, as amended, stand part of the Bill.

The Committee divided: Ayes 11, Noes 9.

Division number 45 Decision Time — Clause 17 - Section 16: further provision

Aye: 11 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 17, as amended, ordered to stand part of the Bill.