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Lord Glentoran: My Lords, I want to wear my Northern Ireland hat. I attended the debate about the fees. None of the Unionist Peers is able to be present. I am sure that they knew nothing about the Quigley report and probably knew little about the measure that we are discussing.

The Quigley report was published on 29th March, some 24 hours ago. Perhaps I should declare an interest in as much as Sir George Quigley is a personal friend of mine. The Quigley report contains a number of recommendations. Recommendation 3 concerns Northern Ireland. It recommends,

It clearly makes the point that Northern Ireland students will be disadvantaged in this respect. As I understand the position, the Secretary of State has accepted that recommendation, has done a U-turn, and is now agreeing to some fee concessions. I want to be told whether Recommendation 3 in the Quigley report still applies or whether it has been covered in the announcement of the Secretary of State earlier today, or, rather, yesterday, as we are now into Friday.

I believe that the Secretary of State said that the fee concessions for fourth year students will apply for those starting in 2001. That makes no sense whatever. It is quite ridiculous. I believe that the position in Scotland has changed anyway and there are now to be no fees in Scottish universities. What will the fee structure for Northern Ireland students comprise for the first three years? I can see absolutely no conceivable reason whatsoever why this concession should not apply to those who joined Scottish

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universities in 1998, 1999 or 2000. Why should they be disadvantaged? This is total and utter government rubbish! I see no reason why students in Northern Ireland and elsewhere who are subject to the ridiculous law that was passed--on which a U-turn is now being done--should suffer.

I want absolute clarification of the position for students in Northern Ireland. What fees will they pay for the first three years? What will be the concessions? Why should students who joined Scottish universities in 1998, 1999 and 2000 be disadvantaged in this way?

Lord Bach: My Lords, I am grateful to other noble Lords who have spoken in this debate. I remind noble Lords that today we are discussing student loan repayments; we are not discussing tuition fees. Although it is, of course, legitimate to broaden the debate, I am sure the House will forgive me if I concentrate on--

Baroness Blatch: My Lords--

Lord Bach: My Lords, perhaps I may just finish my first point before I am interrupted. I hope that the House will forgive me if at this hour of the night I concentrate on what we are supposed to be discussing; namely, student loan repayment regulations. But before I do so, I remind the noble Baroness, Lady Blatch, that when she criticises by implication the Minister for not being present when she was available two weeks ago, the Minister was in Lisbon on government business. I was not on government business but I was not available. That must have been the reason that this measure was not discussed on that day.

Having said that, I echo the words of my noble friend the Chief Whip in thanking the Opposition and particularly the noble Baroness for her courtesy in agreeing to discuss these measures tonight. I apologise to her for the lateness of the hour at which they are being debated. However, I hope that she will consider that any criticism she made of my noble friend the Minister was misplaced in this context. I see that she wishes to interrupt.

Baroness Blatch: My Lords, I wish to raise two issues on both of those points. First of all, the noble Lord reminds us that we are talking about repayments and therefore chides us slightly for talking about fees. It is some of the fees that are being repaid. It is what students borrow--that is, fees and maintenance grants--that they have to repay. One cannot talk about repayments unless one talks about the source of the borrowing.

Secondly, I did not schedule the Friday we are discussing. The Government Whips Office did so on the basis of the Minister being present. That was not my fault. The matter was then withdrawn because the Minister was not there. It clearly stated on the face of the order that the matter should be dealt with by 1st

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April, in which case it should have been rescheduled fairly quickly after the cancellation of the business that day.

Lord Bach: My Lords, I am grateful to the noble Baroness. We do not want to go any further over spilt milk. However, I insist that what we are talking about are loans which students have taken out for maintenance. The issue that has been raised at considerable length concerns tuition fees--and I cannot see the relevance of tuition fees to this particular order.

Let me try to answer briefly some of the questions that have been raised. I am astonished by the noble Baroness's attack so far as concerns the Quigley report. As I understand it, there was a Written Answer yesterday in the Hansards of both this House and the other place which dealt with the Quigley report. I hasten to say--I am sure the noble Baroness will agree--that it is an excellent report, which we welcome. Sir George and his committee have done a thorough job. No doubt the next time that the noble Lord, Lord Glentoran, sees Sir George he also will congratulate him on a job well done in looking at the issue of whether students from England, Wales and Northern Ireland studying in Scotland should continue to make a contribution to their tuition fees in their fourth year.

The Government accept the recommendations addressed to the issue. As the noble Baroness reminded us, the Scottish Executive has also accepted the recommendation that it should meet the net costs of the tuition fees of students from England, Wales and Northern Ireland in their fourth year in Scottish universities. The Scottish Executive has accepted the recommendation because, as the committee pointed out, it is the Scottish universities which receive the benefit of those fees and which would suffer if those students were deterred from studying by the extra year's fees. The committee was clear that this was not a matter for the Secretary of State.

I shall move on now to try to answer some of the questions raised by the noble Baroness. The current average national wage is some £21,000 per annum. However, I should point out that the new system we are setting in place by this order is income-based. It is contingent and sensitive. If someone does not obtain or receive £10,000 a year, he or she will not be repaying any loan that they owe. If they fall below £10,000 in the course of a year, they will not have to repay any loan while they remain earning less than £10,000 a year.

Under the old scheme, repayments were over a fixed period and were not income contingent; the amount of the repayments was determined by the size of the loan, not the level of income. That was the previous position. We believe that the advantages of the new scheme are shown by the fact that if the same fixed-term repayments were kept for new loans, a borrower with a loan of £10,000, for example, and an annual income of £20,000 would be repaying £2,000 a year. Under these arrangements that person would be

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repaying £900 a year. A liability to repay £2,000 would be reached under our scheme only when earnings exceeded £32,000.

The noble Baroness asked a number of questions arising out of the order being discussed in another place. I suspect that she has not yet seen--there is no reason why she should have--a letter sent to her honourable friend Tim Boswell, MP, from my honourable friend Malcolm Wicks. It deals with a number of the points she raised and I shall make sure that she is sent a copy of the letter forthwith.

Let me deal briefly with the question of students who go abroad. Borrowers outside the UK tax system who fail to give the Student Loans Company the information for which it asks or who do not make repayments may incur penalties. For example, failure to provide information may mean that the company will increase the amount of interest. Noble Lords will know that the amount of interest charged in the normal way is inflation linked. The rate of interest charged on repayments not paid can increase to three times the normal rate of interest. Continuing failure to make repayments may mean that the debt is accelerated, which means that the Student Loans Company can seek a court order for the full repayment of the loan in a single payment. Any problems that we have under this new system will not be new to the Student Loans Company because there have been problems under the old system as well.

I was asked how employers will know when to stop collecting the money. The Inland Revenue will tell them when to stop. I was asked how the Inland Revenue will know when students move. It will use the national insurance card number that former students have. The Inland Revenue and the Student Loans Company monitor that. Of course there will be some minor costs for employers in operating the scheme. But even for the smallest employer we do not believe that the amount will be very great in the scheme of things. We are determined to look again in a year's time to see whether it has been a real burden on business and on employers. If it has, no doubt we will consult and consider what to do about that.

Finally, the current drop-out rate for students is about 18 per cent. That figure has remained fairly consistent for some time.

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