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Mr. Deputy Speaker: I have to inform the House that Madam Speaker has not selected the reasoned amendment.
9.17 pm
Mr. Forth: I beg to move, That the Bill be now read the Third time.
Our objectives in the Bill are simple and straightforward. We want to extend choice, competition and diversity in the provision of loans to students. Those are our fundamental principles in education, and indeed throughout the public sector. Through competition, student borrowers will get a better service and a better tailored product. Personal lending is best done by the banks and building societies--the experts, after all--and
not necessarily by the Government. It is surely preferable that the enormous sums involved are raised and that the risks are largely borne by the private sector.
Any loan scheme has to balance the interests of the taxpayer and of the student. Our scheme offers preferential terms, including deferment and a retail prices index-linked interest rate for students, and a relatively short repayment period benefits the taxpayer. To that extent, our scheme is already income contingent. I am not persuaded that other schemes would offer a better balance.
We will have to wait to see whether Opposition Members want to shift the balance towards the taxpayer or the student, when they eventually decide what they want to do. At least we know that some Opposition Members appear to accept the principle of loans--five years after we debated the previous Education (Student Loans) Bill. I hope that we do not have to wait that long before we hear the Opposition's attitude to some of the more developed aspects of policy.
The Labour party aspires to be the party of business. Indeed, the matter was raised yet again while discussing the final amendment tabled on Report a few minutes ago. Yet given the opportunity to back choice and competition in the private sector, the Labour party has shown how truly empty its aspiration is--certainly in the context of the Bill. All that Labour could come up with was more or less pointless regulation and an inherent distrust of the private sector.
Mr. Bryan Davies:
I oppose Third Reading of the Bill. We are getting accustomed to the Government misusing the concept of choice in education. The choice that they suggest for school students and their parents frequently turns out to be choice by schools of students. Here we have the supposed extension of choice and opportunity to students. It is, however, clear that the choice will be exercised by banks and private institutions.
The Bill is an enabling Bill, without detail on the way in which the Government intend to act. It is without detail because there was not adequate preparation before it was introduced. The Bill was introduced in a tremendous rush, and that rush was born of one concept only--how to ensure that the Government could write into the budgetary forecast
£100 million of savings from privatising an expensive part of the student loan provision. This first piece of legislation of the Government's last full parliamentary Session, the pathfinder of the Government's legislative programme, is sadly off course and is proving an appalling augury of the Government's Bills this Session.
Before the Bill was discussed in Committee, the Minister said that the whole issue was about breakneck speed and the necessity for extreme urgency in implementing the Bill. That urgency was, of course, born of an attempt to deliver
£100 million of savings in the public sector in 1996-97. In Committee, the Minister admitted that the game was up for this year and that the Bill's real impact would be postponed until after the next general election, whenever that might be.
Why should Parliament indulge a Government on their last legs who seek to condition the actions of future Governments, against a background of their having manifestly failed to produce details of how the scheme should work and of there being no convincing sign that anyone supports the Bill, apart from Ministers and Conservative Back Benchers? Is there a single interest group concerned with higher education or any group concerned with the welfare of education that has had a good thing to say about the Bill? Why should the House grant power for subsidies to the private sector when critical assurances have not been given on how the Minister intends that the subsidies should be guarded?
In Committee and today, there has been no explanation of how the Minister will seek to give even limited protection to students--the remnants of a fair deal--before the legislation comes into force. What will dictate the allocation of loans to students will, of course, be straight commercial criteria. There will be no right of appeal for students and no guarantee that public money is being allocated on the basis of fair principles. The Minister believes in caveat emptor for students--they will have to look after themselves when dealing with the banks.
Moreover, the Government have learned nothing from the widely catalogued difficulties of the existing student loans scheme through the Student Loans Company. The present scheme is subject to almost universal criticism, yet the Minister has made no concession at all to that. He gave no concession to any concept that loans should be repaid on the basis of income contingency, and he made no attempt to recognise what is needed to support a learning-centred society.
Mr. George Walden (Buckingham):
When I was trying to sell the concept of student loans as a junior Minister in the mid-1980s, one of the many objections I heard was that the scheme was the thin end of the wedge. I was careful at the time not to deny that; frankly, I believe that the wedge has a long way to go.
I disagree with nothing in the Bill, but I would add a footnote. The way in which our universities and higher education establishments are developing means that, one of these days, we will have to drive that wedge in further to sustain the undoubted quality of our system. Hon. Members on both sides of the House will have to start thinking and talking about contributions to higher education fees, and not just what we are discussing in the Bill--student loans for maintenance.
That suggestion is recognised by honest Opposition Members, notably the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who has come up with the notion of a graduate tax. I do not think that Conservative Members should dismiss that proposal out of hand on partisan grounds. As a Chamber, as a House of Commons and as a country, we face the problem of how to finance the tripling in the number of students without going down the road of some of our continental partners, who provide a low-grade mass higher education system. We do not want that.
There are some signs of an increasing lack of facilities, and there is news today of an increase in the drop-out rate. One of the great things about our system was that we had a low drop-out rate, and we should read the warning signs and try to be as honest as we can in electoral and partisan terms about this matter. I am not such a fool as not to realise that that suggestion is electoral dynamite, because we are talking about some form or other of contribution from the middle classes towards the maintenance of the high standard of a system which their children preponderantly benefit from. That was not a very good sentence, and I am sorry about that.
Mr. Don Foster (Bath):
The hon. Member for Buckingham (Mr. Walden) is right to challenge all political parties as he has done. The sadness is that the Bill does not address that challenge, which must be addressed. It is a desperate measure which has been hastily prepared and introduced. The Bill's passage through the House, as the hon. Member for Hyndburn (Mr. Pope) was keen for me to point out to the House, is a further example of the chaos and confusion created by the Government. [Hon. Members:
"Hear, hear."] I thought that Labour Members would like that.
Although there may be some merit in sharing loan risk with the private sector, in many respects the Bill fails. It fails to tackle the real problems of student debt and poverty. Despite what the Minister told us in Committee, student debt and poverty have an impact on the quality of students' learning, and are at least in part responsible for the unacceptably large number of students who simply do not complete their courses, creating a real waste of talent.
The Bill fails to provide support where support is urgently needed, for part-time students in higher and further education. It is particularly important that we should be considering those students this year, which is the European Year of Lifelong Learning.
The Bill fails to consider the possibility of moving from a mortgage-type repayment scheme to an income-contingent repayment scheme, which would be fairer to the borrowers and much more secure for the lenders. The Bill fails to meet the legitimate demands for parliamentary scrutiny, and it even fails to ensure that higher education institutions are properly recompensed for the costs that they incur in the administration of the proposed scheme.
The scheme has failed, above all, to attract the rush by the private sector to become involved with the scheme that the Government assumed would occur. The Government's failure to attract the private sector has meant that, only two months after the Chancellor's Budget, the education budget is now £100 million adrift.
When the Bill was introduced, it looked weak and pallid. As we studied the Bill in much more detail in Committee, it became apparent that it was seriously ill. The building societies and the banks are avoiding it like one would avoid a contagious disease. It is a sad and miserable Bill, and hon. Members should put it out of its misery by declining to give it a Third Reading.
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