---

Integration Loans for Refugees and Others Regulations 2007

rose to move, Thatthe draft regulations laid before the House on21 February be approved. The noble Lord said: My Lords, these regulations will introduce a system of integration loans for those recognised as refugees or those given humanitarian protection and their dependants. For ease of reference I shall discuss the benefits to the potential recipients as refugees. By that I mean not only refugees but those with humanitarian protection and their dependants. Section 13 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 enables the Government to set out in regulations a loan scheme aimed at helping refugees integrate into United Kingdom society. Section 13 was subsequently amended by Section 45 of the Immigration, Asylum and Nationality Act 2006 to extend eligibility for the scheme to be made to other categories of migrants, as prescribed. When a refugee is first granted status, he or she will normally enter a critical period of transition during which they may need to find accommodation, to train or re-qualify, and, critically, seek employment. As part of the integration process, an interest-free loan will, we believe, make a considerable impact on their ability to become established in the United Kingdom. It is intended that the loan should be spent on things such as deposits for accommodation, the purchase of tools of a trade or some vocational training. These regulations establish who is eligible to apply for an integration loan and the criteria against which applications for a loan will be considered. The opportunity to apply for an integration loan will be made available to any person aged 18 and over and granted refugee status after the date on which the scheme is introduced. Applicants will be eligible to receive only one loan. Loans, if made, may be subject to conditions. The regulations set out the type of conditions which may be applied. They also make provision for borrowers to enter into a loan agreement which details the conditions on which it is made, the repayment terms, and how terms may be amended if there is a change in the borrower’s circumstances. The introduction of a system of integration loans is much fairer and more cost-effective than the arrangements currently in operation. At present, the legislation provides for those who are recorded as refugees—and I refer to refugees only—to claim a back payment of the income-related benefits he or she would have received, calculated from the day on which he or she first claimed asylum. Deductions are made from that sum, equal to the value of any asylum support received in the mean time. No provision is made for those with other subsidiary status or dependants. Back payments are, in our view, inherently unfair. The amount of money due to a refugee in backdated benefit is based solely on the time spent awaiting a decision and bears no relation to the needs of the individual. We believe that the integration loan scheme will ensure better value for money by targeting resources to those refugees most in need and for specific purposes that will help their integration. The payment of a loan is not automatic and the applicants must say what use they intend to makeof it. It is intended that the loan scheme will be funded by the savings made from the abolition of back payments. The maximum loan payable will be capped at £1,000, while the minimum available will be £100. Loan repayments will be recycled to ensure a continued fund for future refugees. The scheme will be closely monitored to assess its take-up rate and cost-effectiveness. The loans scheme will be jointly administrated by the Home Office Border and Immigration Agency and the Department for Work and Pensions. This partnership will ensure that the administration of the scheme is as cost-effective as possible. The Home Office is committed to the successful integration of refugees and recognises the potential vulnerability of this client group, many of whom may have little or no experience of a culture of formal borrowing and repayment. Loans will be interest-free, with gentle repayment rates based on pre-existing arrangements that operate in the Department for Work and Pensions. The current expertise and safeguards built into the DWP processes and legislation should deliver the policy intention to ensure that the repayment terms of the integration loan are tailored to the individual recipient’s circumstances. In particular, it is planned to recover the loans for those on income-related benefits by way of an amendment to the Social Security (Claims and Payments) Regulations 1987 and their equivalent in Northern Ireland. Theamount to be deducted from those on benefit will be consistent with deductions already in operation within the current framework—presently £3 per week. The regulations have already been considered and approved by the other place. If and when they are approved by this House, amendments to the relevant DWP regulations will be laid. For borrowers in employment or not claiming any income-related benefits, rates of repayment will be set in accordance with established guidelines used by the DWP for other debts and overpayments. Provision is made in the regulations for repayment terms to be revised if a borrower’s circumstances change. Section 12 of the 2004 Act repeals the various pieces of primary and secondary legislation that enable the payment of backdated income-related benefits. That section will be commenced once the regulations have been approved. That is in line with the commitments made during the passage of the 2004 Act that back payments would not be abolished until a loan scheme was introduced. The introduction of integration loans will be an important step in helping refugees to find their feet in society and to start contributing to our economy as soon as possible. I commend the regulations to the House. Moved, That the draft regulations laid before the House on 21 February be approved. 10th report from the Statutory Instruments Committee and 12th report from the Merits Committee.—(Lord Bassam of Brighton.)