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Sale of Student Loans Bill

As always, my hon. Friend makes an interesting point based on his wealth of experience in these matters. Obviously, the Bill involves a much bigger transaction than the £561 million to which I was referring, and the amount of interest subsidy paid will increase at least proportionately, which involves some risk, as my hon. Friend suggests. Taking into account the face value of the sale and the subsequent interest subsidy payments, what proportion of the £6 billion will the Government ultimately keep? What proportion of it has been accounted for in the comprehensive spending review? Can the Minister tell the House which loans will be selected for sale? Will the selection be random or systematic, according to a formula such as whether the loans are high or low risk? What is the total number of loans to be included in the package to bring the value up to £6 billion? Many Members referred to trust in their contributions. Recent events have further undermined the Government’s reputation for competence—throughout Government, not just in the education sector. Several Members asked about data protection, about which the public have some doubts, so what assurances can the Minister and the Government give graduates that their personal details, including bank account information, will not be lost, leaked or liquidated accidentally? The public will not have been completely reassured by the Minister’s opening remarks. Can the House be assured that such information will always be encrypted and not moved around on CD-ROMs? Can the public trust the Government to spend the proceeds of the sale wisely? There have been countless examples across Government, including in education, of profligate and wasteful spending. Indeed, some people might even say that unnecessarily splitting a Department and renaming the remnants constitutes just such waste. If that were not enough, there are many other examples of waste, as recent reports have shown; Lancaster university has already warned us about the frivolous way in which the Government splash the cash. A commitment from the Government to reinvest the revenue raised from the sale would be extremely welcome. In a powerful intervention, the hon. Member for Harrogate and Knaresborough (Mr. Willis) said that he wanted some of the money spent on higher education—as did some other contributors. I, too, hope that at least some of the money can be spent on our higher education sector, which is, as the Minister knows, vital to the UK economy and should be given every reasonable support. However, the money resolution makes it clear that all the revenue will disappear into the Consolidated Fund. Can the Minister tell the House how much of it will go to higher education? A small part could be used to reinvest in institutions that will be devastated by the impact of recent cuts. Over the summer, the Government sneaked out a £100 million cut in funding to institutions dedicated to part-time and mature students. Help to institutions such as the Open university and Birkbeck college, both of which provide a valuable service to the UK economy, would be extremely welcome. I am sure that, as my hon. Friend the Member for South Holland and The Deepings suggested, the House would be interested to know whether the Minister has been in discussion with interested commercial bodies already. Will it be possible in due course for the Minister to name the interested parties? If he feels that doing so would undermine negotiations, could he perhaps disclose the number of interested parties with whom he has already had preliminary discussions? If he genuinely fears undermining the negotiations, I shall not push that matter, as it is vital that the Government are not hampered in their efforts to obtain maximum value for money when the assets are sold. It is important to respond to the powerful contribution from my hon. Friend the Member for Daventry (Mr. Boswell), who has enormous experience of these matters. In particular, he raised the issue of selling on loans, as did my hon. Friend the Member for Windsor (Adam Afriyie), and the Minister needs to offer considerable reassurance on that issue. My hon. Friend the Member for Windsor is right: it is possible that the Government could end up guaranteeing the very loan that they have just sold off. Having sounded several notes of caution and having asked the Minister a number of specific questions, I shall close my speech by saying that the Opposition are, in general, satisfied that the Bill will provide the necessary safeguards to attract commercial buyers. The sale is evidence that closer co-operation between the public and private sectors provides the most effective way to manage the growing student debt portfolio. The revenue that the Bill will raise, and should continue to raise, is welcome. Despite reservations about selling on loans, information security and how the Government will spend the money, we believe that the proposals in the Bill are sensible, and we will therefore not hinder its progress on Second Reading.