Education (Student Support) Regulations 2001
Education Standards Fund (England) Regulations 2001
Financing of Maintained Schools (England) (Amendment) Regulations 2001

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Sir Teddy Taylor (Rochford and Southend, East): Has my hon. Friend read in paragraph 7, which concerns spouses' contributions, the most unusual phrase about someone

    ``ordinarily living with a man as her husband''?

How on earth does one work that out? To whom does one go and who decides?

Mr. Boswell: I have a horrible feeling that my hon. Friend is on to a sound point. I have not read that passage with the acuity that he has demonstrated. We must first consider the concept of ``ordinarily living'' with one's husband, as opposed to ``extraordinarily living'' with him—or living with someone else's husband, or all manner of possibilities on which we could speculate if we had time. Secondly, on where such considerations may lead, I suppose that that will come down to an official's interpretation of the regulations and may ultimately go to the courts. One of the sad points—it may even be an explanation for the regulations' complexity—is that we now live in a litigious world, in which people demand their rights and take Ministers to court to get them.

Sir Teddy Taylor: We cannot leave the subject. My hon. Friend may be in charge of the regulations in a few days, as I understand that the election has been announced. A young man and a young lady might share accommodation. Young people sometimes have to, as finding accommodation is a bit of nightmare these days. Someone might comment on them living together as a lady and a husband. Whom might be appealed to under the regulations? We do not want to create problems, and my hon. Friend may have to implement the regulations if the Conservatives win the election.

Mr. Boswell: My hon. Friend whets my appetite for the job, even if it may be more difficult than we should like. We have run such legislation in the past and got by somehow, as I suspect that present Ministers will claim to have done. If hard individual cases involve serious and responsible-minded people who do not stumble into such situations, those people can no doubt seek the advice of their institutions. They can also see their student welfare officers.

My hon. Friend is on to the biggest difficulty. He has matchless experience of the regulations of the European Community, but I shall not inflame your excitement, Mr. Amess, by suggesting that he talks about that. When there is complexity, there is the potential for confusion, mistakes, difficulty, differences of interpretation and, ultimately, unfairness. We want to avoid that. We want something that delivers sensible finance and support for the student and means that a bona fide student acting in good faith knows where he stands. In a roundabout way, and no doubt as a warning to me in anticipation of duties to come, my hon. Friend is on to something. I hope that the Under-Secretary will want to respond to his point, as it should be taken seriously.

By way of cheering the Under-Secretary up, I was going to say that some measures always are, and I hope always will be, more welcome and palatable. I suspect that those will be the ones that he wants to talk about. For example, I would not disagree with the Government about the fact that provisions on child care are sometimes important for sustaining students. The absence of affordable child care can be a serious disincentive to continuing the student experience. We do not want people to drop out of courses. It would be useful if the Under-Secretary could say more about that. I also want him to talk about why such measures are apparently being financed as part of the grant by central Government, rather than being demitted to the local institutions through the access funds.

The high point of my understanding of the regulations came when I was fortunate enough to go to my local institution, University college, Northampton. I am a member of its court, as are all local Members of Parliament, which is a good idea. The staff there did not only talk to their visitors, but put us in seminars on subjects of our choosing. The one I went to was on student finance, and we had a good hands-on briefing on exactly how the regulations worked.

Unless I have completely misread one of the regulations, I notice that the child care grant becomes part of the student's income and is then taken into account in means testing. I recall that the Prime Minister—perhaps I should call him the outgoing Prime Minister—emphasised the importance of abolishing means tests. Again, I think that you would not want me to respond to temptation, Mr. Amess, but I cannot help but briefly observe that the Chancellor of the Exchequer's latest proposals for baby bonds mean that the Government will have introduced a means tests that begins at the cradle and, through the minimum income guarantee for pensioners, goes to the grave. It is important that we know how the relevant measures work.

Perhaps more important than how specific provisions work is the implication for the principles on which the Government operate in teasing out the student support package. I want to touch upon two specific points.

Regulation 10(7)(c) refers to the training of teachers on flexible postgraduate courses. The answer does not leap off the page, but I wonder whether all trainee teachers will be able to obtain finance. What comparable provisions are made for bachelor of education students, who are sometimes worried about the disparities? I appreciate that it is still under consideration, but will the Under-Secretary say something about the Secretary of State's suggestion that loans to student teachers might be written off? If they were written off, would they be a taxable benefit in kind to former students? More generally, if a former student starts working for a financial institution and receives a golden hello, not necessarily one connected with teaching, is it taxable as a benefit in kind? Has that been tested in court?

We have been discussing matters of detail, although, as my hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) said, they are important to individuals. While I do not wish to widen the debate, some general issues about student finance have been raised, and I invite the Minister to comment on them briefly.

From the work done by Professor Clare Callender and her colleagues, the Minister will know of the growing problem of student finance and its impact on access, especially for relatively disadvantaged groups. Many people—dare I say it, typically our own children—come from a relatively privileged and middle-class background, and although they may not necessarily enjoy affluence at university, they can get by with a measure of support, financial or otherwise, from parents and others. When none of those preconditions exists, when there is no family tradition of attending university, and when there is no easy means of finance and a strong aversion to debt, life is not so simple.

I hope that the Minister has taken to heart the Callender study, because it shows a deteriorating position, particularly for those groups. This is the first year in which the students who will graduate will have had three full years of loan finance only. It is striking that the Callender figures were produced in the interim; they show a deteriorating position and an increasing mountain of debt among students. That will continue to develop now that the three years is over. It is fairly obvious that those who take the full student loan for a three-year course are likely to end with a debt upwards of £10,000 and possibly as much as £12,500, even if they do not go on to a long courses such as architecture or veterinary science. That is a significant burden, especially for people in the relatively disadvantaged groups.

What is the drop-out rate, which seems to have increased, particularly among relatively disadvantaged students? My last exchange with the Secretary of State on that subject was about two months ago. I found his answer implausible, but I was able to work out what had happened from figures I already had. He said that participation was increasing among people from the lowest groups. He had chosen only socio-economic group V, and a very small sample of only 5,000 students. Much larger numbers of the three relatively disadvantaged socio-economic groups—lower III, IV and V—were involved, with roughly 60,000 participating. The figures showed decline there. The drop-out figures, which are important, and those for aborted applications and failure to turn up, give even more cause for concern. I hope that the Under-Secretary will speak about that.

I appreciate that these are not the only repayment regulations—we debated some last year. None the less, it would be helpful to know about the experiences of repayment or failure to repay, and about the recovery of debt according to the income band of the individual. It is self-evident that if the system is progressive—even if it starts at what, in my view, is the ridiculously low threshold of £10,000—the more one earns the more one pays. I understand that, and I am not trying to argue that point. However, I am concerned about whether the obligation to repay is equal among the various participant groups. If it is not, the Under-Secretary should tell the Committee. If there is a problem with the people at the lower level making repayments, something should be done about it. I shall return to that subject in a moment.

The Under-Secretary represents a London constituency, and he will know—painfully—that costs in the south-east are exceptionally high. I would like him to say something about London students in particular, because it was clear to me, when we had an exchange on the matter, that Baroness Blackstone, the Minister of State in another place, did not appreciate that the rental charge in a hall of residence for a London university is typically more than the whole student loan. If a student were to rely entirely on the student loan for his or her income—it is treated as income—he or she would not even be able to afford to pay the rent.

That raises a wider issue, which does not concern London alone—that of the extent of students' participation in employment while they are studying. We need not be mealy-mouthed about that; I am not an opponent in principle of any participation in employment. It may be quite a good experience for students to have some time working in the union bar, for example, or pursuing a course that is relevant to their employment or their future employability, for a limited amount of time.

I have taken an interest in the various student support frameworks and student employment services that have grown up in the past few years as the pattern of student finance has changed. The Callender report may suggest that disadvantaged students have more problems, which may cause them to drop out. It would be helpful if the Under-Secretary could talk about that report, and about student finance in general.

Just as we do not like the way in which the standards fund has developed, we have some concerns about student finance. First, there should be no top-up fees in the next Parliament; on that I think that we are at one with the Government. Secondly—and the Government have not gone along with this, because they have not followed our proposal—we have said that it should be a condition of a university endowment that the institution in question should be able to show a proper arrangement for student access. Institutions would have to satisfy us on that before they could apply for an endowment.

Our third point, about which I feel strongly, is that there should be a doubling of the threshold before it is necessary to start repaying student loans. The Under-Secretary may want to respond to that with the figures that I have asked him for, but the issue goes wider. It is essential for us to get some idea of the experience and the doability of this for students after they have left higher education, and of the deterrent effect of having that loan on their backs. It may be all very well for some of us who are used to mortgages and do not mind borrowing money, or who even encourage or permit our children to do so, but it is not as easy for everyone to take up loans. If such action results in able students being unhappy in their studies or unable to finance them afterwards, or prevents them from going on the course in the first place, it is a major social disadvantage.

I am not asking for our old mortgage-style loans to return. I am not saying that they were ideal, but repayment cut in at 85 per cent. of the average national income. It is extraordinary that the Government's new student loans are required to be repaid at about 50 per cent. of national average income. That is why we have proposed a doubling of that threshold as part of a restructuring of student loans. I feel strongly about that. I am grateful for the patience of the Committee in listening to the complex argument that I am advancing. I lay the student support package at the Government's door. They have created a time bomb, and they have walked away from it and left an incoming Conservative Government to put it right.

5.11 pm

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