Sale of Student Loans Bill

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Clause 4

Loan regulations
Question proposed, That the clause stand part of the Bill.
Sarah Teather: Just for clarification—I think that the Minister will be able to answer my question easily—clause 4(3) refers to
“the reimbursement of costs or expenses incurred by a loan purchaser”.
Does that relate to fees for sorting out the purchasing of the loans in the first place or to costs that are incurred if somebody defaults on the loan?
Bill Rammell: It is the latter. I think that that was clarified this morning.
Rob Marris: May I suggest that my hon. Friend considers tabling amendments to clause 4(3) on Report to make it clear that that is the case, because it is not clear in the wording?
Bill Rammell: My apologies. I discussed this issue with my hon. Friend and I think that I am right in saying that he has tabled an amendment on it. I am sympathetic to the framing of that amendment, but I need to look at it in detail. If I can be reassured that it would not have an unintended consequence, I will be happy to accept it on Report.
Question put and agreed to.
Clause 4 ordered to stand part of the Bill.

Clause 5

Question proposed, That the clause stand part of the Bill.
Mr. Hayes: There are issues about who might act as a collector on behalf of the loan purchaser. Clause 5(2)(a) stipulates
“collection by a person acting on behalf of a loan purchaser”.
We have some doubt about that. Some reassurances were offered during our earlier considerations, but it would be useful to put those on the record again here. The anxiety is that the collection agent should be the Student Loans Company, or someone directly accountable to it; that the line of accountability should not be stretched to a point where graduates are disadvantaged.
Clause 5(2)(b) concerns the issue of Her Majesty’s Commissioners for Revenue and Customs. Regarding the repayment of loans by people who are not resident in the United Kingdom, I wonder whether we should firm up the fact that the power to collect student loans lies with HMRC and the Student Loans Company, and not another agent. That was discussed at some length during our deliberations this morning, but these are important matters for popular reassurance. I hope that the Minister will clarify and amplify some of the points that he made during that earlier scrutiny.
Sarah Teather: We discussed this issue this morning, but I was not clear about the answer. I asked the Minister what would happen in the case of a default. He said that there is no need to pass data between the Student Loans Company and the SPV, but what I was asking was whether there is a legal prohibition, either in the Bill or in the data protection legislation, to ensure that that does not happen.
Bill Rammell: The latter would come by means of a contract and I hope that that provides a reassurance. In respect of the hon. Gentleman’s questions, we have made it clear that we intend to ensure, by use of contractual obligations, that the private purchasers, through the SPV, use the Student Loans Company to administer the loan repayments on its behalf. We intend the Student Loans Company to carry through its review of the administration of student finance, which is called “Customer First”. That is very much our intention. However, if we were to stipulate in statute today that the Student Loans Company would carry out that task for ever and a day, that would bind our hands unnecessarily and we would have to come back to legislate on that issue when there are already other protections in place.
Mr. Hayes: That was a weak argument when it was used this morning and it is a weak argument now. Many such bodies are specified in legislation. The nature of legislation is that sometimes one has to specify those agents and bodies—those organs of government. The Government would be much more likely to satisfy the doubts and assuage the fears of those who have reservations about this matter if it were to put what the Minister said at the beginning of his remarks in the Bill. That would be something of the order that collection should be by the Student Loans Company.
I understand that the Minister is concerned about fixing that measure in stone, but my goodness, if that view prevailed in respect of legislation, we would pass virtually nothing here. So I am not so sure that that is a very convincing reason not to put this measure in the Bill. At the very least, it would deal with any doubts that exist about people collecting debts who ought not to be.
Bill Rammell: I am genuinely not convinced that making that change is necessary. I know that we are in something of a limbo because amendments have not been tabled, but if the hon. Gentleman feels strongly about this matter then, without giving any commitment, he should table an amendment on Report that we could debate and consider, although I do not believe that that is necessary.
The hon. Gentleman’s other point was in respect of those people who are repaying outside of the pay-as-you-earn system. They must undertake those repayments, at the moment, directly to the Student Loans Company. That will continue to be the case whether or not—again, I state this for the record—the debt is owned by the Government or by the private sector.
Question put and agreed to.
Clause 5 ordered to stand part of the Bill.
Clauses 6 to 7 ordered to stand part of the Bill.

Clause 8


Question proposed, That the clause stand part of the Bill.
Mr. Hayes: This clause would, in effect, extend the power of the Welsh Assembly to administer these matters. That may be a slightly clumsy way of putting it, but I think that is its gist. For the purposes of the record, can we have an assurance of what that would mean in practice? Presumably, it means that the Welsh Assembly might take a different view about when to sell, what to sell and how to sell the loan book. Also, what estimate have the Government made of the incompatibilities that that situation could produce?
Sarah Teather: I asked a question this morning during the pre-legislative scrutiny and the Minister said that the proceeds from any sales would come straight back into the Treasury. It is not clear to me what benefit—if any—there is to the Welsh Assembly in enacting any of these powers.
Mr. Hayes: That invites another question, about the proceeds from the sales generally, but it is a very good point. We are not for a moment suggesting that the proceeds of the sale should be hypothecated, because that would be a spending commitment and if I were to make that I would be on the carpet, even though the Opposition Whip has briefly left the room. However, the hon. Lady is right that there is an issue about the receipts of the sale. That raises the question why the Welsh Assembly was included. More especially, there is an issue about the compatibility of any policy that might be enacted in Wales that was at odds with what was done here. Given that an immense number of students from Wales study in England and students from England study in Wales, it would seem to be in all our interests to ensure that policy is consistent and coherent. Has the Minister made any assessment of that? In offering that assessment to the Committee, will he address the pertinent point raised by the hon. Lady?
5.45 pm
Bill Rammell: Let me set out the general framework, and then I shall respond to those two points. As responsibility for student loans in Wales was devolved to Welsh Ministers back in 2006, it is important that the provisions apply equally to Wales. Any decision on the future sale of the Welsh loan book needs to be made in Wales by Welsh Ministers. Clause 8 gives Welsh Ministers the power to do that in the way that they have requested. Welsh Ministers are keen to ensure that maximum value for money is achieved for Welsh student loans and the powers are in place so that we can ensure that they do so. The Bill will enable them to decide when they deem it appropriate to use the powers, bearing in mind the relevant economic and value-for-money considerations—exactly the same value-for-money considerations that govern our decisions in England.
In accordance with the new devolution settlement agreed in 2006, the Bill will confer executive powers on Welsh Ministers to sell loans for which they are already responsible, mirroring the powers that it gives the Secretary of State for loans for which he is responsible. Those mirror powers are appropriate in these circumstances, as it is clear that that is what Welsh Ministers require. The clause confers on Welsh Ministers functions of an executive nature; it does not give them the power to make that legislation.
Let me pick up on the points that have been made. The first was about the difference of treatment that we may end up with between Wales and England. The responsibility is devolved. Part of the settlement of devolution is that the Welsh Assembly is allowed and empowered, in areas for which it has responsibility, to make decisions that may be different from those in England. In terms of the scale of things, the sums of money are relatively small, as Wales represents £1.1 billion of the £18.1 billion total student loan book. On whether there is an incentive for Welsh Ministers to undertake the step because money comes back to the Consolidated Fund and not the Welsh block, the money coming back to Government will give the Government as a whole greater flexibility in determining its spending priorities. Welsh Ministers cannot have the money directly attributed to their block but, as a DIUS Minister, I cannot have that money directly attributed to DIUS. Nevertheless, I am delighted and delirious to be taking the Bill forward.
Sarah Teather: It is, however, rather odd. The Minister is a Minister in the Westminster Government. It is odd for Welsh Ministers to make a decision that will have an effect only on the books here and that will have no obvious direct impact on their budgets. Is he aware of any discussions between the Treasury and Welsh Ministers about whether that will have any impact on that budget?
Bill Rammell: Just as I do not comment on discussions that I and the Secretary of State have with Treasury Ministers, it is not appropriate and would not be right for me to comment on any discussions that may or may not take place between members of the Welsh Assembly Government and the Treasury.
The fundamental principle governing sales in both England and Wales is that they will enable the transfer of risk and an income stream that enables us to make choices about where that money should be spent. That was the principle on which we had cross-party support for the Bill on Second Reading. I hope that we can maintain that support in Committee.
Question put and agreed to.
Clause 8 ordered to stand part of the Bill.
Clauses 9 to 13 ordered to stand part of the Bill.
Question proposed, That the Chairman do report the Bill, as amended, to the House.
Bill Rammell: Thank you, Miss Begg, for presiding over the Committee smoothly, efficiently and effectively. I congratulate all Committee members on the good-humoured nature of the discussion. A number of hon. Members commented on the fact that this might be a Finance Bill rather than an education Bill. I do not believe that that is the case. It is appropriate that education spokespersons lead this discussion. Important points of principle have been at stake that will bring real benefits to the Government. Through the mechanisms that we put in place, we can protect the graduate interest.
Mr. Hayes: I endorse and amplify the thanks to you, Miss Begg. You have shown remarkable indulgence to Committee members, which has allowed us to debate these issues, even though our consideration has been concertinaed.
I have a couple of points to make, however. First, we learned a great deal this morning, but I wonder whether it would be better in the future—I make no criticism of today’s proceedings—to have a gap between the evidence-taking sessions and subsequent consideration of Bills. My second point is that we look forward to further consideration of the legislation and perhaps to tabling one or two amendments on Report, as we were encouraged to do by the Minister, when we can explore matters in even greater detail.
It is always a pleasure to serve in Committees opposite the Minister and with such an immensely sagacious group of colleagues. I thank all hon. Members.
Sarah Teather: I, too, thank you, Miss Begg, for the way in which you have chaired this Committee. I found it a very useful debate, particularly this morning’s session. I hope that this innovation in Public Bill Committees will be taken up by all Members.
I would like to add to the point made by the hon. Member for South Holland and The Deepings. It would be useful to have a gap between sessions, because this morning’s opportunity to question witnesses changed the way in which I thought about the Bill. It was a good example of the way in which Members on both sides can contribute and ask pertinent questions. The Committee was able to move forward considerably from the point at which we started this morning.
The Chairman: I add my thanks to Committee members. This was the first Public Bill Committee that I have chaired. I thought that this morning’s session was extremely useful—I think that all Members did.
Question put and agreed to.
Bill, as amended, to be reported.
Committee rose at seven minutes to Six o’clock.
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Prepared 5 December 2007