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"As well as clearer information, faster decisions, timely payments and accurate repayments"
would be assured. It is no wonder that after doing so little for HE, and FA for FE, he was sent to the FO. He left a legacy for the Minister for Higher Education and Intellectual Property; I know that the situation was not of the latter's making, but it is still his responsibility. How stark is the contrast between past soft-soap rhetoric and the granite-hard reality of the problems facing students and their families this year!
Some 175 students started this term without loans. Worst hit are first-year students, as the hon. Member for Bristol, West (Stephen Williams) said. At the end of last week, 28 per cent. of first-year applications had yet to be dealt with, and universities are being obliged to make emergency pay-outs. I hope that when the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs winds up, he will talk about those emergency pay-outs and will comment on the questions asked by the hon. Member for Bristol, West, about how easy those pay-outs are to access, and what the Government are doing to support universities in that regard.
The problems could have been anticipated. Indeed, they were; minutes from the board meetings of the Student Loans Company reveal that in July 2008-a full year before the problems became public-the company forecast that 40 per cent. of telephone calls would go unanswered. At the same meeting, a policy of avoidable contact was adopted. That, by the way, is Labour-speak for not answering the phone. The Student Loans Company is using an 0845 number, against official Ofcom advice, so callers must pay for a 10p-a-minute call, and some of the revenue can be "shared" with the Student Loans Company. I call that adding insult to injury, and adding impertinence to both.
To add to the chaos, the future of the student loan book is now unclear. At the beginning of the week, the Government announced a fire sale of Government-owned assets. Back in 2007, the comprehensive spending review committed the Government to raising £6 billion over the next three years from student loan sales, yet no sale has yet been made. When the Minister winds up the debate, will he tell us whether the £3 billion is in addition to the £6 billion in the CSR? Can he tell us when he expects the first tranche of loan sales to be made, and if no sale is expected to be made by the end of the financial year, can he say how the Government intend to make up the £6 billion shortfall?
In the past year, there has been a succession of crises in HE, further education and skills. First, there was the crisis over FE capital funding; then the crisis of the Train to Gain overspend and the problems with apprenticeships; and now there is the crisis in student finance. Is it any wonder, when responsibility for this vital area of policy has been shifted from one Department to the next, like a macabre game of pass the parcel-first DFES, then DIUS and now BIS? But this is not a game. The Government are playing with people's lives-the hopes, dreams and potential of a generation. In Labour's end, to paraphrase Eliot, is its beginning-a 13-year journey back to where it started.
As the Minister for Higher Education and Intellectual Property knows, I admire his progress from disadvantage in Tottenham to high office. I know that in his heart he must be ashamed that as a result of his Government, few others so disadvantaged will follow in his footsteps. For he must also know in his heart that if we want to reinvigorate higher education, if we want to reignite social mobility, if we want to deliver social justice, we need a Government who genuinely believe in education: change driving hope, a fresh start-a new Conservative Government for a new Britain, because Britain deserves better.
The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan): We have had a good debate with some excellent contributions, some colourful ones and some thoughtful ones from both sides of the House. It has been an immensely enjoyable debate.
I congratulate the hon. Member for Norwich, North (Chloe Smith) on her maiden speech. She spoke with great clarity and passion about her constituency. I particularly thank her for the praise that she gave to her predecessor, Dr. Ian Gibson, who is a close friend of mine and was an excellent Member of the House. She said that she wanted to emulate his independence in the House. I hope she has informed her Whips Office of that, as I am not sure her Whips will so heartily praise her if she does so.
We are clear that finance should not be a barrier to people entering university. The hon. Member for South Holland and The Deepings (Mr. Hayes) referred to the background of my right hon. Friend the Minister for Higher Education and Intellectual Property. Both my parents left school at 14, and I come from the first generation of people who had the opportunity to go to university, coming through comprehensive education and going to Oxbridge. If people have been through that experience, it stays with them and makes them genuinely and honestly committed to widening participation and access.
That is what the Government have done. Many more people from my kind of background are now able to go to university than was the case in the past, and certainly when I went to university in the early 1980s. We are committed to widening access to higher education, and that is what we have been doing. That is why we have a generous system of student support providing both grants and loans for tuition fees and living costs in university. That is why we have non-repayable maintenance grants of up to £2,906, which were reintroduced by the Government. About two thirds of all students are expected to benefit from a full or partial maintenance grant.
Whatever review takes place- [Interruption.] I hear the hon. Member for Bristol, West (Stephen Williams) chuntering-it will not involve the savage cuts that the Liberal Democrat party leader seems to have promised, although the hon. Gentleman was quick to distance himself from that. However, it is appropriate to refer, as my right hon. Friend the Minister did, to the problems that there have been with the Student Loans Company. He gave a clear explanation of events. It is a matter of great regret that students have not been able to get through to the Student Loans Company to speak to an adviser and find out about their application. Students and parents have been confused about the process and about what has been happening with their applications. The poor level of customer service, as my right hon. Friend made clear, is not good enough.
The Student Loans Company has put measures in place with financial support from the Government to help students follow the progress of their applications and to address the problems that people have had in getting through to its call centres, including providing additional helplines and more staff to answer calls. Action is being taken, but we should keep the problems in perspective.
Every single one of those applications is important, but more than 640,000 students have been paid by Student Finance England this year. That is more people than ever before at this time of the year, and we should acknowledge that a significant number of students do not apply until shortly before the start of term. The suggestion of 175,000 students still being unpaid is way off the mark. Each year a large number of students begin applications but do not complete them. I understand from the Student Loans Company that this year that amounts to 77,000.
My right hon. Friend announced a review under Professor Deian Hopkin, which has been welcomed. In response to the point from the hon. Member for Bristol, West, the review will be undertaken as quickly as possible. We should make a judgment on what has happened when we hear the full conclusions of that independent review, but it should not divert us from the fact that this year more students than ever before are going to university. From reading the motion and listening to the hon. Member for Havant (Mr. Willetts), one would think that fewer students than ever before were going to university. The Opposition's motion regrets the rise in the number of applicants without a place, and we need to unpick that, because it means that the Opposition are saying that we should have provided more places. I heard the hon. Gentleman say that, but let us just analyse it for a moment. When we had fewer students a few years ago, the Opposition said that we had too many-that we were shovelling people into university; now that we have more students than we had then, the Opposition say that we have too few. How on earth can anyone sustain that position?
The hon. Gentleman has been described many times as having two brains, and perhaps that explains how two totally different positions can be maintained within
the same head. That is the only possible explanation, because it would cause most of us great mental perturbance if we tried to square that circle.
Mr. Willetts: I wonder whether the Minister is not holding in his head two completely inconsistent positions. Is he claiming the credit for those extra numbers, because some of those extra students are students whom universities should not have recruited, and he is going to fine those institutions for taking them on.
Kevin Brennan: That is a nice attempt to avoid the charge, but before I conclude I shall refer briefly to a further confusion in the hon. Gentleman's head: his plan to pay for this sudden conversion to 10,000 extra places in university. When I intervened on him earlier, he told us that he would offer a discount to existing graduates who pay off their student loans more quickly and would use the money that was returned to pay for more university places. However, the cost of student loans to the Government is not the amount of money that is loaned to the student; it is the difference between the rate of interest charged on a student loan and the rate of interest charged by the bank from which the Government borrow the money to pay for the student loan. By asking for money to be returned early, all the hon. Gentleman is doing is taking money that is owed to the bank, bringing it back in-house and giving it out again to students to pay for their higher education. In other words, it is a smoke-and-mirrors, totally disingenuous way of borrowing extra money, which the hon. Gentleman claims he and his party do not want to do.
Earlier today, I heard the Leader of the Opposition say of the Prime Minister, "Doesn't he understand that we won't win the public's trust unless we're straight with them about the choices that we face?" Extra students at university cannot be paid for through some scam scheme by which money that the Government already owe someone else is repackaged in order to hide the need to borrow the money to pay for the places. When will we see the detailed costings of that policy and exactly how much the hon. Member for Havant believes it will raise?
Natascha Engel: Who does my hon. Friend think is most likely to pay back that money early? What kind of person? Would he hazard a guess as to whether a richer or a poorer person would have that kind of money up front to pay back their loan more quickly?
Kevin Brennan: I am not sure of the answer to that question, but I suspect that the money would not come from somebody who saved in a credit union; it would be more likely to come from somebody with access to a hedge fund, rather than anybody from the communities that we are discussing.
To talk about widening participation while proposing a highly regressive policy on higher education, combined with a completely bogus way of paying for additional places, really is disingenuous. We look forward to seeing the detailed costings of this fag-packet policy. I do not know whether the hon. Gentleman was consulted when the Leader of the Opposition talked about it on a Sunday television programme, nor whether the shadow Chancellor was consulted, but it is unravelling just as quickly as the right hon. Gentleman's pension plans.
When will the man with two brains tell us whether there is one single coherent strand to his policy for extra places? It is not extra cash: one cannot magic money out of nowhere. Even in opposition one has a duty to be responsible about finances, and we look forward to hearing him tell us exactly how he would pay for that policy.
I fear that my time is running out-[Hon. Members: "Hear, hear!"] I am afraid that it is running out as rapidly as the credibility of the hon. Gentleman's policy. We shall oppose the motion and I urge the House to support the Government's amendment.
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