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Sale of Student Loans Bill

The amendments are simple but necessary. They would clarify the Government's position, defend the interests of those with debt, and maintain rigorous and appropriate accountability. I am delighted to follow the hon. Member for Hayes and Harlington (John McDonnell), whose amendment No. 4 is very similar to the Opposition's amendment No. 10. There is an anxiety among hon. Members of all parties to ensure that the interests of the taxpayer and of those who have taken on a debt are protected. We can achieve that by making the wording of the Bill as tight as possible, even though we accept the Minister's good will and good intentions. Indeed, I should like to take this opportunity to say that he has handled this Bill with his customary professionalism and generosity. Amendments Nos. 4 and 9 would require the Secretary of State to be party to onward sale arrangements, and they would also ensure that he was automatically a party to further transfer arrangements. On Second Reading and in Committee, concerns were expressed by hon. Members of all parties about the resale of the debt. I shall say a little more about that, as both amendments apply specifically to those circumstances. Clause 3 gives the purchaser of a loan the right to sell it on to another buyer, subject to any limits on that right specified in the terms of the original sales contract with the Secretary of State. Although those who purchased the debt have a clear right to sell on the loans—one suspects they would not be able to buy them in the first instance unless that right is made clear—I think the whole House will agree that it is important that we have appropriate safeguards in place. There are legitimate concerns about collateralised debt, and they were raised eloquently on Second Reading. History has taught us that loans can easily be repackaged and, in the end, involve a large number of different purchasers, some of whom, if they are known at all, could be outside the jurisdiction of the Secretary of State. Various scenarios were described in earlier considerations of the Bill. They include the horrific possibility of a loan or part of a loan book being purchased by an organisation underwritten by Government, by an offshore company or by an organisation in a distant place that would be outside the jurisdiction of the Secretary of State and therefore not subject to the important checks and balances that are to be written into the initial sale as part of the sales contract.