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Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way on that ridiculous point?
Mr. Byers: If the hon. Lady cares to rephrase her question, I am prepared to give way.
Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way on that precise point?
Dame Elaine Kellett-Bowman: It is still a ridiculous one, though. Is the hon. Gentleman aware that my exceptionally well-run university has about 10 applicants for every place, and that some of its faculties attract about 100 for every place? We have absolutely no dearth of students applying even though they know perfectly well what the regime will be.
Mr. Deputy Speaker: Order. Before the hon. Gentleman replies, may I point out that he is getting close to a Second Reading debate?
Mr. Byers: I am rapidly coming to a conclusion. If the Government are providing money to subsidise the private student loan sector, their priorities must be questioned. Many of us think that the money would be better spent on financial support for students than on subsidising financial institutions with taxpayers' money.
Mrs. Maria Fyfe (Glasgow, Maryhill): Earlier, the Minister objected to my hon. Friend the Member for Wallsend (Mr. Byers) calling the Bill a privatisation of student loans. Yet it was crystal clear from our discussions in Committee that if the scheme turned out so successful that the Student Loans Company ended up on its uppers, lending only to a tiny handful of students, that would be fine by the Minister, because he wants to open up the loans to as many financial institutions as happen to be interested.
Crucially, the amount of subsidy intended to be given to each bank has still not been revealed. We all know that the banks have expressed varying degrees of uninterest in the entire scheme--ranging from downright rejection to an expression of the view that a number of difficulties need to be overcome. Those difficulties include technological and merger problems.
The Minister claimed that it was not true that the banks were wholly uninterested: they were, he said, merely making opening moves in the negotiations. My hon. Friends will recall from serving on the Committee that the Minister seemed to think it laughable that the banks might mean what they are saying and that when they say no, they mean no. The clear implication is that the banks have only to keep on saying no to convince the Minister that they really mean yes--if the price is right.
We are talking about what may be immense subsidies of public money for these banks just to ensure that the Minister does not get egg on his face and can persuade an
unembarrassing number of banks to take part. So the largesse will go to whichever banks can be persuaded to take part, if they ever can be.
This contrasts starkly with the treatment of the under-25s in respect of housing benefit, and with the treatment of students living in poverty. The citizens advice bureaux in Scotland and elsewhere have produced clear evidence of students in dire difficulty because of poverty. Thus the contrast between the treatment of the banks, which do not need the money, and the students, who do, is dramatic.
I was reminded of the Minister's view--that the banks do not really mean no when they say no--last night when I was re-reading "Pride and Prejudice", having recently watched the excellent BBC production of the novel. Everyone must be familiar with the character of Mr. Collins, and the part of the book in which he offers his hand in marriage to Elizabeth Bennet. She refuses, saying that she is quite sure that neither Mr. Collins' happiness nor her own would be enlarged by the prospect: under no circumstances would she marry him. He replies that he understands that young ladies may say no when they really mean yes, so he feels encouraged by her refusal.
What do the banks have to do to make the Minister understand that if they say no they really mean it? If the Minister thinks that he can persuade the banks to adopt this course, will he reveal what sums of money he has in mind?
Mr. Gordon Oakes (Halton):
You and I have been in this House for a long time, Mr. Deputy Speaker. One of the advantages of the Report stage of a Bill is that it is brought back to the House. When I was Minister of State responsible for education, 17 years ago and dealing with higher education, funding students was a problem. Now, it is a far more acute problem because of the welcome increase in the number of people in universities and higher education.
I do not know what the Minister will say in reply to this debate, but he is looking a gift horse in the mouth if he rejects the new clause tabled by my hon. Friend the Member for Wallsend (Mr. Byers). The new clause defers consideration of negotiations until after the next general election. No matter how long the Government limp on, 31 May of next year will be beyond the next election.
This is a most unwelcome Bill. Students do not want it and have never wanted it; the universities and vice-
chancellors have never wanted it; the banks and building societies do not want it. The Government are considering the time factor--whether 31 May 1997, or today--in which they can bribe banks and building societies to engage in the Bill's provisions. Frankly, the banks and building societies do not want it. It is of no commercial interest to them.
I must tell my hon. Friend the Member for Wallsend that I thought some of the comments by Conservative Members very fair. They asked what the Opposition would do if the Bill were deferred until 31 May next year. As the Irishman said when asked how he would get to a certain place, my reply would be, "I would not start from here." I would not start from this Bill and I would abandon this process altogether.
We must grasp the fact that we now have a very large student population--a population that the nation finds it difficult to support financially. Whether a Conservative
Government are in office or we are in office, that is a fact that we have to face. Neither the Government nor we, the Opposition--I regret to say--have faced up to how we are to fund students.
Many schemes have been put forward and have been tinkered with or played with, but they have never really been considered due to political expediency, or whatever. One is the Australian scheme--Australian students repay loans through a statutory income tax system according to their degree and ability to pay. The vice-chancellors have put forward a scheme to the Government and the Opposition, suggesting ways to tackle the problem. The Australian scheme, the vice-chancellors' scheme or any other scheme bear no resemblance to the weird system that the Government propose, which will solve nothing.
Meanwhile, tens of thousands of students are living in poverty and misery, as my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) said, when they should be devoting their attention to their studies. Instead, they have to devote their attention to wondering where their next meal is coming from and that must be wrong.
Mr. Colin Pickthall (West Lancashire):
My right hon. Friend might not be aware that the Minister made it clear in Committee that he did not believe that there was any connection between student poverty and the quality of students' educational performance.
Mr. Oakes:
If the Minister tried to make that clear, it is the most nonsensical statement that I have heard. Every hon. Member, on both sides of the House, is aware of student poverty--not just poverty among working-class students, but among middle-class students and across the board. They will be the leaders of industry, the professions and academia in this country and that is the way that we treat them. The new clause gives the Government and my hon. Friends on the Opposition Front Bench time to think of an alternative to this ludicrous scheme, which no one loves.
One of the advantages of a Report stage is that another line can be put. I have served on many Standing Committees, as you have, Mr. Deputy Speaker, and I know that members of such Committees look at the problem from the point of view of the Committee. The new clause will give more time and I hope, therefore, that when considering it the Minister will grasp the gift horse with which the Opposition have presented him and will willingly accept it, saying that negotiations shall not take place until after 31 May 1997. I hope that if we are in government, those negotiations will not take place at all because we will have a far better scheme for funding students than this ludicrous Government scheme.
Mr. Mike Hall (Warrington, South):
First, I must repeat something that I said in the Standing Committee about the principle behind new clause 3. The new clause is uncontroversial, helpful and necessary and it will benefit the Government. It is in line with the Government's timetable for the introduction of the private sector into the payment of student loans.
I hope that the Minister will accept the new clause on behalf of the Government because it will improve a very poor Bill. As it stands, the Bill encapsulates everything that is wrong with the Tory party approach to government--it is an arrogant abuse of power. The Government do not seem to care that they have not been able to explain to Parliament the full costs of the measures
included in the Bill. The Government are asking Parliament for a blank cheque. They are saying, "Pass this enabling Bill and allow the Government to get involved in the negotiations with the private banks and to provide subsidies to them to grant loans to students." They are saying that they are not prepared to tell us what the cost to the taxpayer will be or to say what the cost of the student loans will be. They are asking us to take it on trust and to take the Bill through.
The new clause straightforwardly states that the Government can go so far but that, given that they do not want to implement the Bill in the private sector until 1997, the new Parliament can decide whether it wishes to proceed with the measure. That is the real strength of the new clause. It will prevent the Government's arrogant abuse of power--the fact that they are not telling us how much they are prepared to commit to the scheme.
The new clause allows time for the Government to say that the negotiations have been completed and to tell us which high-street banks will become involved in private sector student loans. So far they have been unable to tell us and, if they have the information, they have refused to reveal it. I believe that they are not holding anything back because they do not know which banks will become involved. A number have said that they will not do so. The new clause will allow Parliament the full knowledge of which high-street banks and private institutions are prepared to get involved in the scheme and, therefore, strengthen the democratic process.
The new clause will also give us time to consider the effects on students. Opposition Members tried to do that in Standing Committee, but the Government strongly resisted it. The Government have given great consideration to the effects that certain changes that we tried to make in Committee would have on private financial institutions, but have had no regard whatsoever to the impact on students. On Second Reading, in Committee and on Report--and, I suspect, on Third Reading--we have had no sign from the Government of how the scheme will affect students. New clause 3 introduces a means by which those omissions can be overcome.
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