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7.38 pm

Mr. Phil Willis (Harrogate and Knaresborough): I can assure the hon. Member for Angus (Mr. Welsh)--who is not party to Liberal Democrat deliberations--that it will become clear where we stand on this Bill as I speak for the next hour and a half.

I find it extremely difficult to listen to Government and Conservative Members speaking with one voice. I can understand why the Minister wishes to rush the Bill through. It is increasingly evident that it is not the Government who are pushing through the Bill, but the ghosts of the previous Administration. As the Tory party tears itself apart and gives the appearance of a party in terminal decay, it continues to have an iron grip on education spending in this House.

This sordid little Bill was conceived in Tory central office and born in Walworth road. It was sordid when the present Minister opposed the concept before the election, and it is sordid now. It is going through the House at the speed it is, not because Ministers believe in it, but because the proceeds are essential to the Chancellor's spending plans for this year and next.

Before the hon. Member for Angus (Mr. Welsh) turned on the Liberal Democrats, he made a good point. No student will benefit as a result of the passing of the Bill, and not a single penny extra will go to our universities. It is important for hon. Members on the Government Benches--and for those on the packed Conservative Benches--to understand that. It does not matter that the proposals are no different from the sales of other public assets that were so derided by the Government when in opposition.

The student loan portfolio that is under the hammer today is a national asset. It is worth £3.1 billion and it is being offered to the City at a knockdown price. Can the Minister tell the House what is different about this sale to the City? What was so wrong about selling the National Grid or Railtrack at knockdown prices to the so-called City fat cats, but not this public asset? What is the difference? How does such a fire sale fit with the Government's proposals rightly to demand the test of best value on the awarding of local government contracts, for instance?

3 Nov 1997 : Column 81

Can the Minister answer those two questions clearly, openly and without prevarication? Does he believe that the sale of those enormous public assets--on the terms you have agreed--represents the best value to taxpayers, yes or no? Secondly, if you say yes--

Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

Mr. Willis: I am sorry. My apologies to the Minister--

Mr. Deputy Speaker: Order. If I am on my feet, the hon. Member must resume his seat. He has now corrected himself. He has already made a number of speeches in the House, and that is a point of procedure that he should have absorbed by now.

Mr. Willis: My apologies, Mr. Deputy Speaker, to you and to the Minister. If he is prepared to say that this is best value to the taxpayers, will he be prepared to say what is the level of discount being sought by investors in order that the debt can be bought? I do not expect him to give me a precise figure, but the level of subsidy is directly relevant to the cost of selling this portfolio to the taxpayers.

The Minister said, in his former life as Opposition spokesman, that any subsidy above 25 per cent. would be excessive for the sale of the student loan portfolio, when the former Government wanted to attract private sector lenders into the student loan market. Perhaps he will say whether he expects the subsidy to be greater or less than 50 per cent. of the total value of the loan portfolio.

While Liberal Democrats understand the predicament that the Minister has been placed in by the Chancellor's commitment to the previous Government's tax and spend proposals for the next two years, he must understand the outrage felt on our Benches when we see what may be as much as a £1 billion subsidy paid to the private sector when our universities are experiencing the worst cash crisis in their history.

In effect, the £1 billion that the Minister is potentially giving away would stave off for the lifetime of this Parliament the requirement to introduce tuition fees. The sum of money saved would be far more than the total amount of money that will go to our universities because of imposing tuition fees in the lifetime of this Parliament. If the Minister disagrees with that assessment, can he say how much additional money will go to our universities in the lifetime of this Parliament from the imposition of tuition fees?

Another issue is the redefinition of lending proposed by the Secretary of State for the future treatment of student loans. If the Secretary of State is successful in persuading the Chancellor to change the redefinition of lending, we shall support him in his efforts. Could that principle not be applied to the existing loan portfolio? In that case, would the Minister consider not proceeding with the second tranche of the £1.5 billion sale next year?

Finally, I must ask the Minister whether at least one of the institutions that he expected to bid for the portfolio has already dropped out. Can he tell the House how many institutions are still actively bidding for the portfolio?

3 Nov 1997 : Column 82

I must inform the hon. Member for Angus that, if a Division is called tonight, the Liberal Democrats will be opposing the Bill.

7.44 pm

Mr. Byers: I shall answer those points, many of which will be more appropriately debated tomorrow during the Conservative Opposition day debate on Dearing and the Government's response to it.

To answer the points raised by the hon. Member for Harrogate and Knaresborough (Mr. Willis), we shall be publishing the names of those companies that are submitting for the portfolio. It would be inappropriate to give the information that he has requested tonight.

Mrs. Margaret Ewing (Moray): Why?

Mr. Byers: For the simple reason that we are in the process of running a strong competition to get the best deal for the taxpayer. It is the competition that will ensure that we get the best deal--a fact expressed by Opposition Members. I can give a guarantee that the details of those companies that are interested and are moving to the final stage of the process will be made public, as we made public the names of the 20 companies that entered the first phase of the competition.

I was interested to hear the hon. Member for Harrogate and Knaresborough talk about the outrage on the Liberal Benches about this measure. It is a pretty recent outrage, because not one of them voted against it on Second Reading. The hon. Gentleman referred to a debate we had when the previous Government introduced their attempt at a twin-track approach to student loans--a different approach from the one that we are proposing. It was in that context that we objected to the subsidy that was being offered. We have a strong competition in relation to the student loans book. We shall be receiving a number of substantial offers. It would be inappropriate this evening to reveal details of the discounts that we expect to be offered. Doing so would not get the best possible deal.

On the points raised by the hon. Member for Angus (Mr. Welsh), the Prime Minister has committed the Government to extending access to further and higher education by an extra 500,000 places by the end of this Parliament--not rhetoric, but commitment to open up access. This measure will open up access, extend opportunities and ensure that we can continue to provide high-quality provision. On the basis of those three principles, I urge the House to vote for Third Reading.

Question put, That the Bill be now read the Third time:--

The House divided: Ayes 283, Noes 24.

Division No. 79
[7.47 pm


Abbott, Ms Diane
Ainger, Nick
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Ms Hilary
Ashton, Joe
Austin, John
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beard, Nigel
Benn, Rt Hon Tony
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Berry, Roger
Best, Harold
Betts, Clive
Blears, Ms Hazel
Blizzard, Bob
Borrow, David
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Byers, Stephen
Caborn, Richard
Campbell, Alan (Tynemouth)
Campbell, Ronnie (Blyth V)
Campbell-Savours, Dale
Caplin, Ivor
Casale, Roger
Caton, Martin
Cawsey, Ian
Chaytor, David
Chisholm, Malcolm
Clapham, Michael
Clark, Rt Hon Dr David (S Shields)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Coleman, Iain
Colman, Tony
Connarty, Michael
Cook, Frank (Stockton N)
Cooper, Yvette
Corbett, Robin
Corbyn, Jeremy
Corston, Ms Jean
Cousins, Jim
Cranston, Ross
Crausby, David
Cryer, Mrs Ann (Keighley)
Cryer, John (Hornchurch)
Cummings, John
Cunningham, Jim (Cov'try S)
Darling, Rt Hon Alistair
Davey, Valerie (Bristol W)
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Dismore, Andrew
Dobbin, Jim
Dobson, Rt Hon Frank
Doran, Frank
Drew, David
Drown, Ms Julia
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Lorna
Flint, Caroline
Follett, Barbara
Foster, Michael J (Worcester)
Foulkes, George
Fyfe, Maria
Gapes, Mike
Gardiner, Barry
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Godman, Norman A
Goggins, Paul
Golding, Mrs Llin
Gordon, Mrs Eileen
Grocott, Bruce
Grogan, John
Gunnell, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hamilton, Fabian (Leeds NE)
Hanson, David
Harman, Rt Hon Ms Harriet
Heal, Mrs Sylvia
Healey, John
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hewitt, Ms Patricia
Hill, Keith
Hinchliffe, David
Hoey, Kate
Home Robertson, John
Hoon, Geoffrey
Hope, Phil
Hopkins, Kelvin
Howarth, Alan (Newport E)
Howarth, George (Knowsley N)
Howells, Dr Kim
Hoyle, Lindsay
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Jackson, Helen (Hillsborough)
Jackson, Robert (Wantage)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Barry (Alyn & Deeside)
Jones, Mrs Fiona (Newark)
Jones, Helen (Warrington N)
Jones, Ms Jennifer
(Wolverh'ton SW)
Jones, Dr Lynne (Selly Oak)
Jowell, Ms Tessa
Kaufman, Rt Hon Gerald
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Kelly, Ms Ruth
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kingham, Ms Tess
Kumar, Dr Ashok
Ladyman, Dr Stephen
Lawrence, Ms Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)
Linton, Martin
Livingstone, Ken
Lloyd, Tony (Manchester C)
Lock, David
McAllion, John
McAvoy, Thomas
McCafferty, Ms Chris
McCartney, Ian (Makerfield)
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McLeish, Henry
MacShane, Denis
McWalter, Tony
Mahon, Mrs Alice
Mallaber, Judy
Marek, Dr John
Marsden, Gordon (Blackpool S)
Martlew, Eric
Maxton, John
Meale, Alan
Merron, Gillian
Milburn, Alan
Miller, Andrew
Moran, Ms Margaret
Morgan, Ms Julie (Cardiff N)
Morgan, Rhodri (Cardiff W)
Morley, Elliot
Morris, Rt Hon John (Aberavon)
Mountford, Kali
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Naysmith, Dr Doug
Norris, Dan
O'Brien, Mike (N Warks)
O'Hara, Eddie
Organ, Mrs Diana
Palmer, Dr Nick
Pearson, Ian
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quin, Ms Joyce
Quinn, Lawrie
Rammell, Bill
Rapson, Syd
Raynsford, Nick
Reed, Andrew (Loughborough)
Reid, Dr John (Hamilton N)
Rooker, Jeff
Rooney, Terry
Rowlands, Ted
Ruane, Chris
Ruddock, Ms Joan
Ryan, Ms Joan
Salter, Martin
Sawford, Phil
Sedgemore, Brian
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Short, Rt Hon Clare
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Starkey, Dr Phyllis
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr Howard
Stott, Roger
Strang, Rt Hon Dr Gavin
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Gerry
Taylor, Rt Hon Mrs Ann
Taylor, David (NW Leics)
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Timms, Stephen
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Desmond (Kemptown)
Twigg, Derek (Halton)
Vaz, Keith
Vis, Dr Rudi
Walley, Ms Joan
Ward, Ms Claire
Watts, David
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Williams, Mrs Betty (Conwy)
Wills, Michael
Winnick, David
Wood, Mike
Woolas, Phil
Worthington, Tony
Wray, James
Wright, Dr Tony (Cannock)
Wyatt, Derek

Tellers for the Ayes:

Mr. Jon Owen Jones and
Mr. Greg Pope.


Ashdown, Rt Hon Paddy
Beith, Rt Hon A J
Brand, Dr Peter
Breed, Colin
Burnett, John
Campbell, Menzies (NE Fife)
Chidgey, David
Cotter, Brian
Dafis, Cynog
Fearn, Ronnie
Gorrie, Donald
Harvey, Nick
Heath, David (Somerton & Frome)
Kennedy, Charles (Ross Skye)
Öpik, Lembit
Rendel, David
Russell, Bob (Colchester)
Sanders, Adrian
Stunell, Andrew
Swinney, John
Tyler, Paul
Webb, Steve
Welsh, Andrew
Willis, Phil

Tellers for the Noes:

Mrs. Margaret Ewing and
Mr. Elfyn Llwyd.

Question accordingly agreed to.

3 Nov 1997 : Column 85

Bill read the Third time, and passed.

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