Refugees: Loans

14:53:00

Lord James of Blackheath
asked Her Majesty’s Government:

What value of loans they have extended under the new integration loans for refugees; and what steps they are intending to take with regard to any arrears or defaulting payments.

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead)
My Lords, the value of loans paid out under the integration loan scheme for refugees and others from 11 June, when the scheme was launched, to 31 December 2007, is £134,000. Loan payment and recovery is undertaken by the Department for Work and Pensions on behalf of the Home Office and the usual DWP enforcement procedures will apply where there is no compelling reason why loan repayments cannot be made.

Lord James of Blackheath
My Lords, I am grateful to the noble Lord for that response, but does he not share a little of my disappointment at the apparent lack of take-up of this facility? It struck me at the time as one of the most enlightened and intelligent pieces of regulation put through by this Government. It shone out like a good deed in a naughty world. I hoped it would have had a much bigger take-up than we have seen. What percentage of applications received might that figure be, assuming that they have all taken £1,000 per head, which was allowed? How many have been declined?

Lord West of Spithead
My Lords, the noble Lord is absolutely right: this was a very good scheme, debated in the House, and we expected a much higher rate of take-up. This has been accelerating since last June, when the scheme initially came in. So far we have had 562 applications, of which 198—that is, 35 per cent—have received a loan. A number are awaiting receipt of signed loan agreements. It is not quite clear why there has not been bigger take-up, because this is very useful in enabling those who, almost by definition, are disadvantaged to integrate into our society.

Lord Avebury
My Lords, what was the Government’s response to the Merits Committee’s criticism of the scheme that it would be difficult for recipients to pay back even an amount as small as £3 per week, when it came on top of other deductions from benefits? Now that the Government are determining asylum applications within a maximum of six months, would they agree that £100 of every grant made under this scheme should be in the form of a grant, rather than a loan, over the six months?

Lord West of Spithead
My Lords, the £3 per week taken from income-related benefits is a very reasonable amount. One can look at the circumstances and that could be adjusted if necessary. As regards getting back payments and loans, I was very concerned at the thought of using debt collection agencies; indeed, I was grateful for the question that was raised. There are very clear rules for the use of debt collection agencies. I am convinced that, when necessary, we can remove the need to pay back for a period, as long as the loan is repaid within five years.

Baroness Hanham
My Lords, could the Minister tell us what advertising is done regarding these grants or loans? There seems to be pretty poor take-up so far. How are they advertised to refugees and people who are entitled to stay here? Is that done by the DWP, or is it done more generally?

Lord West of Spithead
My Lords, the noble Baroness raises a very good point. I do not know the exact details, but we have a very good system for helping people integrate into society. They are taken care of by around 300 caseworkers, who look after cases around the country. I am sure that they would give them the details, but I do not know the precise answer, so I will have to come back to the noble Baroness on this in writing, if I may.

Baroness Gardner of Parkes
My Lords, I am informed—and I ask the noble Lord if this is correct—that people applying for asylum are told about this scheme. If that is so, for how long after that do they have the right to apply for a loan?

Lord West of Spithead
My Lords, I am glad to hear that they are told about the scheme as they apply for asylum. This partly answers the previous question, although I will still write in answer. Exactly how long they have thereafter to make the claim, I do not know. I will get back to the noble Baroness in writing on that, if I may.

Lord Roberts of Llandudno
My Lords, with reference to debt collection agencies, could the noble Lord tell us what it would cost, per person, to collect a loan of £1,000 that had not been repaid?

Lord West of Spithead
My Lords, I am afraid that I do not have those facts at my fingertips. I know that the DWP uses the four debt collection agencies that it uses more widely in recovering debts. If I can get that answer from the department, I may come back to the noble Lord in writing on the details.