Welfare Reform Bill

The right hon. Gentleman is, I think, referring obliquely to credit unions, which do a very good job in certain parts of the country. I support the concept of credit unions, as they play an important role. For those on low incomes, there is a role for properly community-based loans at low rates of interest, but we are talking here about loans that will be available under the social fund, and as the right hon. Gentleman knows, some people are not in a position to pay them back at interest rates of up to 27 per cent. The Government must think very carefully before they allow external providers to charge such rates to some of the most vulnerable people in our country and to those who find themselves in the greatest financial difficulty. The issue is not simply that under the Government's proposals it will be possible for such interest rates to be charged on these loans, but that the Secretary of State is seeking powers to remove social fund provision from areas where external provider loans are available. So in some parts of the country, people will be able to get social fund loans only from these external providers. The Secretary of State may not want to listen to what I have to say on this issue, but perhaps he will listen to some of the groups that work with some of our most vulnerable families every day. Gingerbread has said:"““We are concerned that Government is moving ahead with legislation on the future of the Social Fund without having set out the consequences or even intentions of such legislation.””" The Child Poverty Action Group has described the consultation as ““hasty and botched”” and Barnardo's has expressed concern that these proposals will lead to a ““postcode lottery”” for claimants, with those covered by external providers having to pay interest on their loans.