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Lord Morris of Castle Morris: My Lords, it is a pleasure to support Amendments Nos. 1 and 2, which have been grouped together, so cogently and felicitously proposed by the noble Lord, Lord Peyton of Yeovil, and the noble Baroness, Lady Park of Monmouth, to whom it is always as delightful as it is improving to listen.

After reading with care and with profit our exchanges on this subject at Committee stage, and hearing again today the eloquent and persuasive pleas of noble Lords opposite, and after scrupulously reconsidering the Minister's words throughout the Committee stage, especially his final reply to his noble friend--given after some considerable pressure--I can only say, with the poet George Meredith, in his poem "Modern Love", stanza 50,

The noble Baroness, Lady Park, made our concerns pellucidly clear when she said at Committee stage, and I quote her with pleasure,

    "the Government will not know who has tendered and on what terms until at least after Easter. Nor, we understand, will the private institutions know until then what will be the cost of rejigging their computer technology and training their staff. Nor will the Government be able, until then, to cost the relationship between the universities, which must still do all the paperwork, and two funding mechanisms rather than one".--[Official Report, 12/3/96; col. 778.]
I could not have put that better myself, and I wish I had. It is only when we are certain what the arcane arrangements are to be that we shall be able properly to exercise the powers of your Lordships' House. It is our

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duty to do that and, until we have that information, we are unable to do so. The Minister, in his carefully worded reply, could offer us only,

    "the normal channels of the appropriation accounts, and ... the department's annual report".--[col. 784.]

I shall treasure the description of "the department's annual report" given by the noble Lord, Lord Peyton of Yeovil, and I can echo it having been, through the courtesy of the Minister, presented with a copy of it just before last weekend. I forgot to weigh it. All I can say is that the report which has just been issued feels as though it is heavier than the one it replaced. But it is still the departmental annual report. That is hardly consistent with what we heard earlier this afternoon--minutes ago--about this Government's commitment to open and transparent transactions. Few things are less transparent than a departmental annual report. All that the Minister could offer us therefore was cold comfort, too little and too late.

The appropriation accounts and the departmental annual report are retrospective documents. They simply describe how money has been spent and we, when we receive them, may approve or loudly disapprove. But there is nothing whatever we can do about them. They do not provide a means of prior approval.

It is extremely difficult to see why the Government are so violently resisting that approach when they conceded it in the 1990 Education (Student Loans) Bill. That, surely, is a good, apposite and relevant precedent, and the Government should follow it by accepting the amendment.

Lord Beloff: My Lords, I had not expected to be in the House this afternoon but it seemed a pity to leave before the Statements after Question Time, and therefore I find myself in the curious position of retrogressing in time. In 1990, as has been referred to, we had the original Education (Student Loans) Act. I ventured to tell your Lordships that it would not work; that it would be a source of major inconvenience to students and to universities. The fact that it is now being amended proves, if proof were necessary, that my prophecy was entirely correct.

I mentally made another prophecy, which was the reason I did not intend to take part in today's proceedings any more than in the preceding stage of the Bill. I privately prophesied that all argument about this Bill was quite unnecessary, a taking up of your Lordships' time, because it will never happen. There is no reasonable possibility of any private institution, unless run by people demonstrably unfit to run such an institution, taking on this burden. We cannot make private people do things, even by bribes, unless, on the whole, they believe that there is something in it for them. Apart from discouraging any student from banking with them in their future careers, it is difficult to see what effect the Bill could have.

There is another, more important, point. It is perfectly clear--the Minister is as well aware of this as any other Member of this House--that the whole question of financing universities and students is now in the melting pot. The Dearing Committee is seeking to find an appropriate new method of funding higher

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education. To my mind it is unthinkable that any government would rush into another complicated mechanism of this kind when the whole idea of student loans in their original form may be jettisoned as a result of the Dearing Report.

I cannot understand why, when we are always told how little time this House has for important discussions--for instance, we are told that we cannot have two or three days of debate on the IGC, which is an important event--time can be found for a Bill which has no dignity of ancestry and no hope of progeny.

Lord Tope: My Lords, I follow that intervention with some trepidation and mindful of what the noble Lord, Lord Beloff, says about the unnecessary taking up of your Lordships' time. As I made clear at Second Reading, I share his view that this Bill should never have been born in the first place and, with the announcement of the Dearing review, should have been withdrawn. Nevertheless, it is before us and I rise briefly to put on record the support of myself and my colleagues for the intentions of the amendments before us.

I cannot speak as eloquently as the movers of the amendment and the noble Lord, Lord Morris of Castle Morris; nevertheless, we wish to echo all the comments made on the amendment. It has been said many times that the Government are seeking, through this Bill, a blank cheque; we do not know the payee nor any of the details. It was suggested at an earlier stage that it was a rather novel approach to be conducting our sensitive commercial negotiations through Parliament. That is not what is proposed. We are requesting the opportunity for Parliament at least to exercise its authority to express its view and judgment on the negotiations when they are completed, but not when they are a fait accompli.

Others are much more familiar than I am with departmental reports. I believe the noble Lord, Lord Peyton, described them at an earlier stage of the Bill as being totally indecipherable and in a boring form. If he says so, it must be true. Nevertheless, they are an extremely difficult and belated way for your Lordships to find out what has been agreed by the arrangements. The amendment therefore is right in seeking some form of parliamentary scrutiny of the arrangements that are reached with such institutions as may be entering into agreements, if and when they do. I hope that we are about to hear from the Minister how he proposes to meet the wishes that are widely held in this House.

Baroness Farrington of Ribbleton: My Lords, I support the amendments and ask the Minister to give an assurance that the total cost of the loan under these proposals will be no greater than the total cost of a similar loan through the Student Loans Company. I appreciate that the Government may wish to reduce the public sector borrowing requirement, but surely any responsible government would want to give an indication--for example, to the Chancellor--that the students in question will not be paying a total cost per loan that is greater as a result of this legislation. Whether the student loan in question is classified as a

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public sector loan or a private sector loan, that, plus the proposed subsidy, should not put a greater burden on the general public, including those students who repay.

Are we really to understand that the Government have decided that this legislation should go through whatever the cost to the public purse? I find it hard to believe that the Chancellor takes that approach. Can the Minister remind the House why the Government are proposing in the Bill to subsidise the private sector at all? Surely the private sector is there to provide loans. If the Government's view is that students should be able to get loans from the private sector, why should the public subsidise? Is it that the private sector is not prepared to embark on this scheme without some form of carrot?

3.30 p.m.

The Minister of State, Department for Education and Employment (Lord Henley): My Lords, perhaps I may answer the noble Baroness's last point first. The simple reason is to allow the private sector to offer loans on the same basis as the Student Loans Company will also be offering them. We made that clear on a number of occasions at earlier stages of the Bill.

I start by agreeing with the noble Lord, Lord Morris of Castle Morris, when he paid tribute to the eloquence of my two noble friends. I hope and trust that he always takes such notice of what they have to say. However, he seemed to be moving on from their amendment. My noble friends, I think rightly, following the decision in Committee, have amended their amendment, moving away from the prior approval for which their earlier amendment seemed to be looking. The noble Lord, Lord Morris, it seems, is still looking for prior approval by Parliament of the contract. That, as I have made clear, is not acceptable to the Government and would be a constitutional innovation of a rather extraordinary kind.

Perhaps I may explain why we do not think that the amendment is the right way forward and try to allay some of my noble friends' fears. I shall describe how we hope to get the appropriate information to Parliament in order to meet the concern of both my noble friends that this should be forthcoming. Our first objective is to get for the student and the taxpayer the benefits of what the private sector does best, not only in personal lending generally but in the service, marketing and product standards that choice and competition bring. It would be futile to involve the private sector and then regulate away the advantages that that brings. The operation of choice in a competitive and diverse market is a far better safeguard than a raft of regulations.

Secondly, as made clear at an earlier stage, we could not possibly negotiate with the private sector tenderers within a straitjacket which an amendment like this could impose. I think my noble friend accepts that. I think he accepts that it could make the negotiations themselves inflexible, unwieldy and somewhat time consuming. Thirdly, we understand and accept noble Lords' concerns about the need for parliamentary scrutiny of the private loans scheme but we believe that the steps we are proposing to take will be appropriate for such scrutiny. A draft of the invitation to tender documents, as the House well knows, has been placed in the Library

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of the House. Those documents set out in some detail how the scheme will work. We have also made clear that we shall announce the names of the successful tenderers and do so to Parliament when the contracts are signed. I believe I made clear to my noble friend in the letter I wrote to him on 21st March that that could be by means of a separate statement to Parliament.

I appreciate that my noble friend has considerable concerns about what form that statement takes--whether it would be appropriate to make an oral statement or whatever. I have a sneaking feeling that an oral statement would be somewhat over-egging the pudding. Whether we respond by means of answering a Question put by my noble friend or someone else might be something we could address. I want to make clear that we intend that the statement to the House--to Parliament--will include broad details of the agreement we have reached with the tenderers. We shall give information on the financial institutions involved, the total value of the subsidies and the number of loans, the general nature of the arrangements, and the general details of repayment arrangements. However, the House will accept, I believe, that commercially sensitive information cannot be included. We shall ensure that the benefits of the private sector involvement will be realised as cost effectively as possible.

Although it is possible to give some sort of figure as to what the total cost will be after we have signed the contract, I think, again, that it would be wrong for me to respond to the noble Baroness, Lady Farrington, by giving a top figure in advance. Parliament will have its opportunity in due course to scrutinise and to check when it considers the annual appropriation accounts. The National Audit Office will be following in our footsteps. Not only will it have access to our books; it will also have access to the private lenders' books. I believe that parliamentary scrutiny is safeguarded at an appropriate level. I do not believe that the amendment adds anything; it would possibly make the negotiations somewhat harder.

My noble friend Lady Park ranged more widely and talked about going beyond 50 per cent. of students' maintenance as currently allowed for by the 1990 Act. I can give an assurance that if we wanted to go beyond 50 per cent. an affirmative resolution of both Houses would be required. That is not a matter to consider now but certainly the Dearing committee of inquiry will address it in its study beginning some time after Easter and continuing over the coming months.

I hope that I have given my noble friend sufficient cause to feel that his pressure has been successful. I hope that I have moved a reasonable degree and that my noble friend accepts that I speak in good faith when I say that we shall make sure that information, in whatever appropriate form, is made available to the House.

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