House of Commons
|Session 2007 - 08|
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General Committee Debates
Sale of Student Loans Bill
Sale of Student Loans Bill
The Committee consisted of the following Members:
Hannah Weston, Celia Blacklock, Committee Clerks
attended the Committee
Public Bill Committee
Tuesday 4 December 2007
[Miss Anne Begg in the Chair]
The Chairman: Before we begin line-by-line scrutiny of the Bill, I have a few preliminary announcements. As I said this morning, Members may remove their jackets if they so desire. Could they also ensure that pagers and mobiles are off, or at least turned to silent? I should also point out, yet again, that there is a money resolution in connection with Bill, copies of which are on the Table in front of us.
Sale of student loans
The Minister for Lifelong Learning, Further and Higher Education (Bill Rammell): I beg to move amendment No. 1, in clause 1, page 2, line 4, at end insert
(4A) Transfer arrangements shall have effect (and, in particular, a provision transferring rights or obligations is sufficient to effect the transfer)..
I did not say this morning what a pleasure it is to be under your chairmanship, Miss Begg. I hope that all members of the Committee realise that this is a minor and technical amendment. The intention behind the Bill is to give the Secretary of State the legal power to transfer his rights in respect of income-contingent student loans. We have reconsidered the drafting of clause 1 and wish to remove any potential for it to be construed in the commercial sector in a way that differs from the policy intent behind the Bill. We want it be completely clear that the Bill will give effect to transfers in itself, rather than simply giving the Secretary of State the power to make sales under general legislation governing contracts.
Although the Bill as it stands is clearthat is certainly my reading, and it was the view previously, including on Second Readingit is important that potential purchasers in the commercial sector should be in no doubt as to what it enables the Secretary of State to do. If they thought that there was any question over whether the transfer would have legal effect, they would probably reduce their valuation of the loan portfolio and any securities backed by it, which would clearly damage our prospects of getting good value for money. It is therefore appropriate to remove that uncertainty, however slight it might be, to ensure good value for money for the taxpayer. This technical amendment will put beyond doubt our intention, which is that the Bill, in itself, will enable sales of loans that will have legal effect. I hope that that is uncontroversial and I therefore commend the amendment to the Committee.
Mr. John Hayes (South Holland and The Deepings) (Con): What an immense pleasure it is to serve under your illustrious chairmanship, Miss Begg.
The Minister has made a case for what is essentially a technical change. However, clause 1 permits the Secretary of State to sell to a purchaser his rights and obligations relating to student loans, and sensitivities were expressed on Second Reading and again during the scrutiny that we enjoyed this morning about the precise nature of that transfer of competence. In particular, many concerns have been raised about the impact on students past, future and present, and about commercial issues relating to the sale and possible subsequent resale.
I entirely accept the Ministers assurances about the effect on students and that his intent is that they should see no difference. I accept that the process is meant to be transparent and that students should fully understand what is going on; indeed, they will be written to with an explanation of the process. I also accept that they will see no difference, because the circumstances will be identical; indeed, that has been made clear in the explanatory notes, and in the Ministers comments on Second Reading and this morning.
However, there is the matter of Ministers judgment as to how they use these powers in practice. For example, there is nothing in the Bill to prevent different loan repayment arrangements, as long as those arrangements are made with the Secretary of States consent. The Minister dealt with that this morning and said that if a future Government took a different view about loans, it might be a matter of political imperative that the circumstances changed in respect of the treatment and condition of graduates. Had the Committee been considering these issues over a longer period, we might have tabled a probing amendment.
The Chairman: Order. Perhaps I can help the hon. Gentleman. This is a debate on Government amendment No. 1. I suspect that his speech should be made during the debate on clause 1 stand part, which I will be calling.
Mr. Hayes: I am grateful for that advice, Miss Begg, which I had anticipated. This is a short version of the very extensive summary that I shall be giving in the clause stand part debate, but I take your point that I need to address my remarks more specifically to the amendment.
Perhaps I can ask the Minister a simple question: will he tell us specifically what rights or obligations will be necessary? Will he confirm, once again, that the amendment will have no impact on the graduate population concerned? Perhaps in the clause stand part debate we can explore one or two of the wider aspects of clause 1, which, as I have said, have given rise to concerns here and elsewhere.
Bill Rammell: I am happy to give that assurance. The minor technical amendment that we are considering will have no material impact on graduates. It is being proposed simply to ensure that the position that we knew and believed to be the case is absolutely 100 per cent. clear so that there is no room for doubt. I hope, on that basis, that the amendment will be agreed by the Committee.
Amendment agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr. Hayes: Perhaps I can continue on stand part, as advised, where I left off a few moments ago, Miss Begg.
This matter is a question of how Ministers will use their power in the future. Of course, it is not appropriate for this Committee, or indeed this Parliament, to bind its successors in that regard. It might well be the case that a different Government came to a different view about student loans generally. Nevertheless, given that this is enabling legislationwe heard that, in essence, both on Second Reading and todayit is vital that we put on to the statute book something that will have relevance for the foreseeable future, because these matters might not be brought to a head immediately. Indeed, it might be some years before the loan book is sold.
My judgment about that matter, and in a sense my judgment about what lies at the heart of this aspect of the Billclauses 1 and 2 set out the essence of the Billleads me to ask how far we can reasonably protect the interests of students in perpetuity. How far can we limit the possible risks associated with the Bill without compromising the commercial attractiveness of the products? That paradox, if I can put it in those terms, underpinned much of our earlier discussion.
It is clear that Members are anxious that adequate protection is built into the Bill. Indeed, the Government moved the simple amendment that we dealt with a few moments ago for that reason. However, it is equally clear that the Government cannot build in such protection to a degree that makes the product unsaleable. The debate that we will have over the short hoursperhaps days, but certainly not weeksof this Committee will focus on that issue.
I am anxious, as I am sure that the Minister is, to ensure that we have a robust piece of legislation that protects the interests of all concerned, including the public interest, while recognising that commerciality means that we cannot tie up the Bill so tightly that no one would want to buy the product. I think that that tension needs to be explored in some detail at an early stage of our consideration.
I would like to say one more thing at this juncture about the early clauses. There are real doubts about both the reason for the Bill and its consequent effects. Let me explain both those points. There seems to be an inherent confusion about the motive for the Bill. If the motive is to transfer risk, let us have a frank debate about why and how that will happen. If, on the other hand, the motive is to realise the value of assets, let us be frank about that, too. I am not sure that it can reasonably be argued that the motive is to do both, because if this is to be an attractive product, it must be advertisedas it has been by the Ministeras fairly safe and secure, and not a risky thing to purchase. If it is not a risky thing for a private investor to buy, it cannot be a terribly risky thing for the state to own.
If the motive is realising assets, let us be equally frank. I think that that is perfectly legitimate, and I have no ideological objection to that process, to use the Ministers words. However, if that is the key objective, it must be underpinned by a secure and robust value for money framework, as the Minister has described. I am not yet convinced that we have an absolute assurance in these early clauses that value for money can be guaranteed, given the vagaries of Government policy and the changes that take place in ministerial officesnot that we are expecting the Minister to change; we want him here in perpetuity, at least until he is cast out at the election.
Mr. Rob Wilson (Reading, East) (Con): My hon. Friend makes a very interesting point about whether the Bill is about transferring risk or realising assets. Is he aware that in the Financial Times on 15 March, it was suggested that the Prime Minister and Chancellor were using the Bill to sell off public assets to keep the national debt below 40 per cent.?
Mr. Hayes: I struggle, because I am an innocent in a world of cynics. I always tend to think the best of people. My hon. Friend is a businessman of some esteem and has the sort of sharp mind that those of us who are mere romantics can only envy. However, he might be right that there will come a time when, notwithstanding the assurances that we were given about value for money, somebody in governmentit could be the Chancellor, or even the Prime Minister himselfwill say, Where can we raise a bit of dosh? I know, we have this enabling legislation. Lets bang out the student loan book. We wont get much of a price for it, but its better than nothing.
Mr. Gordon Marsden (Blackpool, South) (Lab): The hon. Gentleman is making his point with his customary alacrity and, certainly, some humour. If we are going into the fire sale area of ancient history, we could perhaps relate some rather difficult examples for his party. However, I will not stray down that course.
Surely it is perfectly possible to have a prudent approach on the overall conduct of Government finance. Is it reasonable that a priority for the Governments time and effort is keeping something like student loans in the public sector when there is a perfectly good and robustly tested mechanism for transferring that risk to the private sector?
Mr. Hayes: The hon. Gentleman is right. It is possible to square that circle. While these things are juxtaposed, I do not think that they are necessarily mutually exclusive. It is entirely possible for the Government to be prudent, yet to take decisions that enable the private sector to handle aspects of public policy. The Government acting as a facilitator is a well established model in Westminster and in local authorities, with which I know he is familiar.
For the protection of the public interest, and of Ministers, it seems important that the value-for-money framework should be well established and well understood and should attract a degree of non-partisanone might say bipartisan or perhaps even tripartisansupport. I have a feeling, as a result of this mornings scrutiny more than anything else, that we have to be even clearer about that to ensure that the marriage between prudence and appropriate lateral thinking on how the Government should handle their affairs, as described by the hon. Member for Blackpool, South, is made.
Will the Minister find a way to frame the protection of public interest and the value-for-money approach in a way that is entirely convincing? I suggested that it could be appended to the BillI do not take a definitive view on whether it should be on the face of the Bill or expressed in guidance. However, we need more than we have. The Minister is right: he mentioned it on Second Reading, it is in Hansard, and he will mention it again today. However, as Ministers and policies change, it would be useful to have something on value for money that is set in stone. That was certainly the sense of this mornings discussions.
The other issue with the early clauses was explored in some detail, and we will no doubt return to it in our debate on clause 3. It is the question of how far the Secretary of State should intervene, for how long and in what circumstances. We talked at length about the Secretary of States power. This morning we began to test how permissive that power was. We questioned the Minister and tried to identify the circumstances in which the Secretary of State might feel that it was reasonable to intervene in a transaction subsequent to the initial sale. People were concerned about subsequent sales and how far the Secretary of State might intervene.
Clause 1 is about the principle of the first sale, and clause 2 goes into a little more detail along with clause 3. When the Minister sums up clause 1, will he speak a little about how the initial contract for the sale of the product might be sufficiently flexible as to have use beyond that first sale? In other words, would the Government sell the loan book in part, making it absolutely clear in the contract what the purchaser could and could not do subsequently? We know that there will be restrictions on what the purchaser can do in respect of those of the graduate population who are borrowers.
We are rather less clear about what the purchaser can do in commercial terms. Can they resell the loans? How can they resell them? In what circumstances? How will that resale affect the other considerations that we talked aboutthe collection of debt, the circumstances of the loans, and the robustness and reliability of the system? Should that not be dealt with up front, as we consider clause 1, and in the first contract? If I were buying the product, I would want to know on what terms I was doing so. If I were selling it, as a Government, I would want to know on what terms I was selling it and what might happen further down the line. It seems to me that the issue of resale will come back time and again as we consider the Bill. There are worries to consider.
Sarah Teather (Brent, East) (LD): I must confess that I am learning as I go along, and I suspect that I am not the only person in the Committee in that position. I understand from our sitting this morning that what happens to the bonds is a little irrelevant; the issue is what will happen to the special purpose vehicle and the extent to which that can be sold on. That is where we will need to focus our scrutiny later in Committee.
Mr. Hayes: That is a fair point and, in a sense, the Ministers reassurances are built around that vehicle. Again, I think that we assume a shared support for the principle behind the Bill, which was established in the debate on Second Reading. We are now talking about the mechanics of the sale. Parliament is at its best when we look at the details of something that we do not fundamentally disagree about, because we can get rid of some of the partisan debate and move on to serious scrutiny.
Bluntly, the problem is that, typically, one would expect that when a large debt is sold or purchased it would be broken into parts and resold. That frequently happens with the sale of debts. The Minister feels that that will not happen in this case. Indeed, he painted a picture of the special purpose vehicle for the sale that almost prohibited that eventualityit did not prohibit
It is clear that the vehicle that he has described is designed to minimise risk for the public interest and for the graduate population, but how does the Minister expect that to interact with commercial viability when it is marketed? Will it be marketed as something that is difficult to resell, or that cannot be resold, or will it be marketed in an altogether more permissive way? I began to get a picture of that this morning, but I have yet to be fully convinced about how it might work out in practice.
My final point on the clause is a reprise of the question of the Secretary of States capacity to intervene in those kinds of commercial matters. There is no question that the Secretary of State is given powers by the clause; the word may rather than will is used a lot, as we will debate later. Notwithstanding that, it is not clear how far those powers are designed to intervene in commercial decisions. Are the powers designed solely to prevent anything untoward from happening as it is perfectly proper that they should be? Or are they powers that are likely to be exercised, that the Government expect to be exercised, and that will be exercised if the Government are unhappy about some of the commercial circumstances? For example, the book might be sold in parts, in the way that I describednotwithstanding the hon. Ladys caveat, which I appreciateand there may be concerns about to whom it was being sold. Would the book disappear abroad? Would we have any concerns if it did? We might not, but let us at least have that debate. I would like it to be clear in this and subsequent parts of the Bill to what extent the Secretary of State is likely to intervene in some of the commercial questions, rather than merely intervening to protect the interests of graduates, important though they are.
There are a number of questions on which I would appreciate clarification. First, I will pick up on the hon. Gentlemans point about the purpose of the clause. It would be very helpful if the Minister would lay out, either now or at some stage during the Committee, which risks are being transferred and which the Government are taking in a public and transparent way for the organisation that is buying it.
For example, this morning we discussed that the Government are continuing to take the risk of underwriting the debt if a graduate were to die, go bankrupt, or fail to pay off their loan before the age of 60. Presumably, that risk is accounted for in the sale, so the purchaser would be aware that the Government were continuing to take it. I presume that the Government have analysed exactly which risks they are transferring, and it would be helpful to understand what those are. Do the Government intend to hold a share in the special purpose vehicle or will it be sold on in its entirety? Will they continue to have any interest in it?
The debate on value for money dealt with the extent to which we will realise the net current value of the loans. Why have the Government decided to sell £6 billion-worth of loans in one go, instead of testing the market by, perhaps, first selling smaller amounts? The hon. Member for Wolverhampton, South-West spoke about private finance initiative deals and the potential for large windfalls. If we sold loans in smaller chunks, which is possible with such financial products, we could see what happens with onward sales and whether initial estimates were correct. Why have the Government decided not to do that?
Finally, on clause 1(4)(c), what
warranties or indemnities or other obligations
does the Minister envisage with respect to a sale?
Rob Marris (Wolverhampton, South-West) (Lab): It is a pleasure to serve under your chairmanship, Miss Begg. I have a particular interest in this Bill: the university of Wolverhampton is the most accessible mainstream university in the United Kingdom with the fifth highest number of students. Owing to that accessibility, it has a lot of poor students taking out loans.
Will the Minister provide further details on transfer arrangements? That term seems to be very broad, even though the Bill contains some qualifications of it. What is the mechanism and role, if any, for Parliament in the scrutiny of such arrangements? As I read the Bill, that will not be done through statutory instruments, but will be a commercial decision taken by the Department. Ultimately, of course, it would be for the National Audit Office to investigate and for the Public Accounts Committee to examine. However, will he say a little more about parliamentary scrutiny?
Paragraph 16 of the explanatory notes, which deals with clause 1, states:
For example, the Government does not intend to grant purchasers the right to alter the repayment terms of sold debts.
That appears admirable. However, as far as I can see itI am always open to correctionthat is not in the Bill. Why is it not? I am seeking reassurance for those who have taken out loans or might do so in the future.
Clause 1(4)(f) refers to
specifying consequences of the breach of a provision of the transfer arrangements.
Will the Minister give one or two examples of what penalties might be included should a loan purchaser breach the provisions of the transfer arrangements?
Finally, clause 1(3) states:
Transfer arrangements may relate to...some or all of the Secretary of States rights.
Will the Minister say a little more about what rights might not be transferred? The implication of that wording is that some will be transferred but that others might not. Will he elucidate on that?
I repeat to the hon. Member for South Holland and The Deepings a point that I have made a number of times, but which is important to state again for the record: the terms and conditions will be exactly the same whether the graduate repays their loan to the Government or to the private sector. I welcome the fact that he accepted my reassurances on that matter.
The hon. Gentleman implied that there are concerns about the Secretary of States powers under the Bill. However, let me be clear: the Secretary of State has the power today, if backed by Parliament, to alter the terms and conditions of access to student loans.
I made a point at the general election about the policy of the official OppositionI believe that is still their policy. They wished to charge a commercial rate of interest on student loans, instead of no real rate of interest, which continues to be the Governments policy. If a Conservative Government were elected, they would be free to introduce legislation and empower the Secretary of State to alter terms and conditions. That would be the case even without the Bill, because the power on terms and conditions resides with the Secretary of State, whether the loans are owned by the Government or by the private sector.
The hon. Member for South Holland and The Deepings asked about the ability to protect the graduate. It is through the measures in the Bill and through the contractual process that we can afford protections to the graduate. I gave instances this morning of how we will ensure that it is the Student Loans Company that carries out the administration on behalf of any private sector interest and how we will ensure that there is access to the same independent assessor, where there are problems, as is the case in respect of Government debt.
Mr. Wilson: The explanatory notes state that, under clause 1, the Secretary of State can sell part of a loanfor example, 40 per cent. That could lead to there being two owners of the loan: the Student Loans Company and a third party. How would protection of the individual work in that situation?
Bill Rammell: We are not anticipating that part of a student loan will be sold to the private sector and part will remain with the Government. Nevertheless, whether someones debt is owned by the Government or by the private sector, exactly the same terms and conditions will apply and they will be governed by regulations passed in the House.
The hon. Member for South Holland and The Deepings said that he had serious doubts about the reason for introducing the Bill, and questioned whether it was about the transference of risk or about an up-front income stream for the Government. I said this morningand I repeatthat it is about both those objectives. On his point about risk, it is certainly the case, looking forward, that having the ongoing income stream from student loans on the Governments books entails a degree of risk that ideally we would not wish to be on the Governments accounts. Because the private sector operates with that degree of ongoing risk, it would not be a problem for it to engage with that. That is not inconsistent with the sale being an attractive investment opportunity from the perspective of private sector investors.
The hon. Gentleman made a point about value for money. For the record, I reiterate what I said this morning. A robust value for money framework is in place, and although we have made an estimate of the proceeds that we anticipate gaining from the sales during
The hon. Gentleman asked whether the sales were not intended just to help the Chancellor of the Exchequer meet the fiscal rules. That is certainly not the case. The proposed sales represent the continuation in principle of the policy to sell student loans that began in 1997 although, interestingly, it was undertaken using plans drawn up by the previous Administration. It is also the case that the disposal of surplus assets is a key part of the present Governments drive to improve the efficiency of their asset base. Asset sales are certainly not a short-term measure to shore up the fiscal position; rather, they are a vital part of our wider aim to take a longer-term, more strategic approach to asset management across the board in government, as recommended by the Lyons review.
Mr. Hayes: I just want to be clear about the value for money framework, which the Minister says is well established and robust. What legislative shape will it take, and will it be part of the Bill? Will it be included in a supporting memorandum to the Bill or in guidance? Exactly how will it find its way into the legislative framework?
Bill Rammell: Again for the recordI have made this comment a number of times nowI do not believe that the framework needs to be in the Bill. I read into Hansard last week the criteria by which we will establish value for money. The Government are responsible for proceeding with the sales, but the National Audit Office has rightly said that during the first tranche of sales, it will undertake an investigation. I am confident that we will be able to stand up to that value for money assessment. There will then be a report to the Public Accounts Committee. That process will give the arrangements the rigour and robustness that Members would expect.
The hon. Member for South Holland and The Deepings made a point about the reselling of the special purpose vehicle. It is important to make it clear that based upon advice, my strong view is that the loans or the SPV are unlikely to be sold on. If we consider mortgage-style loans, for example, that has not occurred in almost 10 years with the previous sales, so there is no track record of the SPV being sold on in that way. We looked at the issue of windfall gains this morning, and I shall make the point clear, having considered the issue in further detail. The refinancing gains, which my hon. Friend the Member for Wolverhampton, South-West mentioned this morning, are not analogous to windfall gains for the purposes of allowing clawback in the event of the onward sale of student loans. The 2002 private finance initiative refinancing code allows for a 50:50 share of refinancing gains, should private sector partners, during a project, be able to refinance it on more favourable terms than was originally the case. For example, once a building is completed, the risks may be reduced and the financier can provide more favourable loans. However, the key distinction is that no transfer of assets is involved. Conversely, for the sale of student loans, we believe that we will achieve best value for money by fully transferring
The hon. Member for Brent, East asked why we did not start with a tranche of sales smaller than £6.3 billion. Again, that figure is an estimate of the proceeds that we anticipate receiving during the coming three financial years. We have broken the figure down, and in the first year, we anticipate receiving £3.4 billion. However, that income sum is not set in tablets of stone. If the market conditions are not correct and we do not believe that sufficient information is available to investors to enable us to achieve value for money, the sales will not take place.
Sarah Teather: That was not quite my question. I asked why the Government wanted to do it all in one go. Why not sell a smaller amount first, and test the market to see what happens to the onward sales and whether we achieve the correct value for money? Why do it all in one chunk?
Bill Rammell: With respect, that is what we are doing. The student loan sum is £18.1 billion, and we do not plan to sell it all off. We are taking a prudent approach to the proceeds that we reasonably estimate we can achieve from the sale in the coming years, but the figure is not set in tablets of stone. If we do not believe we can demonstrate value for money, the sale will not go ahead.
My hon. Friend the Member for Wolverhampton, South-West asked an important question about the penalties in subsection (4)(f). They will be determined in detail in relation to each sales contract. For example, they might include compensation to a borrower if there is any breach in terms. This is an enabling Bill, and it is important that we retain the flexibility to deal with all eventualities.
Mr. Hayes: I sense that the Minister is about to reach his exciting climax, but I want to return to the cost of sale. The stand part debate, which is about fundamentals, is the best time to deal with that. This morning, I asked about the cost of the sale. I did not mean the value of the product being sold, but the cost of the process of sale. The Minister said that he would make the Committee aware of the costs that have been incurred so far, and that he would give us an estimate of the likely costs of the process. Will he bring that figure to the Committee during our consideration of the Bill or shortly thereafter, and will he place it in the Library?
Bill Rammell: I shall certainly do so. As I said to the hon. Gentleman last week, his definition of exciting is somewhat different from mine. I gave that commitment, and I hope to be able to provide the figure by the end of our proceedings today. If I cannot do so, I shall write to members of the Committee and place the figure in the Library.
Sarah Teather: The Minister did not answer two of my questions. I asked only four and kept them brief, so I hope that he will answer them all. I asked him what
warranties or indemnities or other obligations
he envisaged making under the clause and whether he would put before the Committee an analysis of which risks he intended to keep and which he thought he would transfer.
Bill Rammell: I shall set out in detail the warranties and indemnities when I write to members of the Committee. As for the question of which risks we are transferring, I set out this morning the range of factors on which investors will base their judgment of risk when deciding how much money to bid for loans. That will be assessed in the value for money framework, and I am confident that we can demonstrate value for money.
Sarah Teather: I cannot believe that the Ministers Department has not analysed which risks will be transferred, because the transfer of risk is the whole premise of the Bill. If the Minister does not have the information now, perhaps he could undertake to write to us.
Bill Rammell: I can do so, butI may be wrongI think that it is fairly straightforward. If the debt is transferred from the Government to the private sector, a range of factors must be taken into account to determine how much of the money, if it remained with the public sector, would eventually come back to the Government. That is the risk that we are transferring, and I set out the risk factors this morning: the number of graduates in employment and earning more than £15,000 a year; the number who die before their debt is paid off; and the number who become permanently disabled. The purchaser of a debt will make a judgment on a range of factors before making their bid. Similarly, the Government will make a judgment, measuring a bid against the value for money framework. I believe that, in those circumstances, we will be able to demonstrate that we have achieved value for money and allow the sale to go ahead.
Sarah Teather: The Minister mentioned something else this morning that I did not knowthe Government will underwrite a loan if a graduate becomes permanently disabled. That is a risk that the Government will keep. I want a list of which risks the Government are keeping and which they are transferring. I am sure that that analysis has been done.
Bill Rammell: I think that this is a genuine misunderstanding. I shall happily put the matter on record by writing to members of the Committee, but the Government would not retain that risk; permanent disability is one risk factor that is taken into account in the sale. I shall happily write to the hon. Lady and set that out the position.
Mr. Hayes: I am extremely grateful to the Minister. As ever, he is being generous, and I am reluctant to drag out his peroration with a series of Wagnerian peaks and troughs. However, there are two matters that we must consider. First, to support a point made by the hon. Member for Brent, East, rights and obligationsthose are the words that she usedmust be sufficient to effect a transfer. To amplify her point, what are those rights and obligations? Secondly, the Minister has said that the quantification of risk involves a fairly straightforward series of actuarial calculations. If those calculations are in the public domain, can they be collated for our scrutiny? If they are not in the public domain, but will
Bill Rammell: No, it is not. I thought that we debated that this morning. For the recordI am happy to follow this up in writingassessing the value of the loan book requires a number of projections of the repayments that borrowers will make far into the future. We estimate the rate at which graduates will repay and the number of loans written offfor example, when borrowers become permanently disabled. Because such projections must be based on assumptions and estimates, a degree of risk is built in. Those risks are transferred to the private sector with sale. I hope that, with those clarifications, we can agree that the clause should stand part of the Bill.
Question put and agreed to.
Clause 1, as amended, ordered to stand part of the Bill.
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