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Sale of Student Loans Bill

I will come to amendment No. 10 in a moment, and I will endeavour to address that point. As the hon. Gentleman knows, I have already mentioned the risk of offshore organisations buying part of the debt. The picture that we fear may emerge is of the book being broken up into small parts. That is normal practice when purchasing and reselling debt. He is right to point out, as he has done before, that control is likely to be increasingly difficult to maintain as that process occurs. However, as I said, I will deal specifically with amendment No. 10 a little later. I do not want to dwell on the Government's continuing misfortunes; this is not the time or place to do that. Although the misfortunes have been profound and have caused real fears and difficulties across the country and have hurt some of the most vulnerable people represented by Members of the House, it is not appropriate to dwell on them here. However, it is certainly true that there are concerns about the leakage of data. Given the number of actors likely to be involved, there is surely an increased likelihood of a sensitive data leak. Unless strict safeguards are implemented, the audit trail could become complicated and possibly unreliable. In Committee, the Minister explained that ““may”” rather than ““shall””—this is the nub of the amendments that I and the hon. Member for Hayes and Harlington have tabled—was used in clause 3 in respect of the Secretary of State's involvement in transfer arrangements because, for accounting purposes, the debt would otherwise not be considered to have left the Government's books. Essentially, he argued that the word ““may”” appeared in the Bill for administrative reasons rather than as a matter of principle. He conceded that the safeguards that I have called for were important, but felt that, as the principal motive for the Bill was the transfer of risk from the public to the private sector, it was important in accounting terms that the debt should be seen to have shifted. There are those cynics—I am not saying I am one of them—who think that the principal purpose of the Bill is to get some dosh to fund the Government's plans. There is nothing wrong with that, but there are those who feel that that might take priority over other considerations, such as the welfare of debtors or the public interest, as my hon. Friend the Member for Reading, East (Mr. Wilson) pointed out. I will not add my voice to those that put forward that cynical analysis, except to say that I have some sympathy with those who expressed a sceptical view about the Government's intentions. I do not mean to insult the hon. Member for Hayes and Harlington in any way, but he missed a critical point: when the Minister for Lifelong Learning, Further and Higher Education clarified the position, he made it clear that the stipulation relating to accounting practices that I mentioned applied only to clause 3(6)(a), which refers to arrangements that"““prohibit the making of further transfer arrangements without the Secretary of State's consent””." For the sake of clarity, let me quote the Minister's precise words:"““Were we to insert the word 'shall' in respect of paragraph (a) so that in all circumstances we would have to prohibit the making of further transfer arrangements without the consent of the Secretary of State, it would contravene the rules of classification and it could not be classified as a transfer from public to private sector debt.””" In respect of paragraphs (b) and (c), it is therefore quite clear that there is no administrative bar to changing the Bill. For the record, when I asked the Minister why paragraphs (b) and (c) were grouped with (a), he said that he was"““always happy to consider constructive proposals.””––[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 62-63.]" Well, amendment no. 9, which is in my name and the names of my hon. Friends, is just such a constructive proposal. It would separate paragraph (a) from paragraphs (b) and (c). It is clear, at least from what the Minister said during the Bill's earlier stages, that we could satisfy accounting rules while building in the additional safeguard that has been called for so eloquently by the hon. Member for Hayes and Harlington, Members on both sides of the Chamber and the official Opposition. Our amendment is constructive as it would ensure ministerial involvement in onward sales, and would reassure the House and all those with student debts. It is on a matter of public interest, and we all seek to ensure that the Bill is in the public interest. Having heard the intervention of the hon. Member for Wolverhampton, South-West (Rob Marris), I turn now to amendment No. 10, which would prohibit onward sale outside the jurisdiction of the Secretary of State. It would ensure that when student loans were broken up, creating the real doubts that I mentioned, the public's or debtors' interests were not jeopardised. I took on board his remarks about offshore companies; they certainly would fall into the category I described, but there are other circumstances in which the resale of the book might jeopardise debtors' interests or the public interest. He is an eminent lawyer, so he might care to contribute on the subject, either now or later. I see that he is nodding, so we can expect some sagacious remarks from him on the subject. Through amendment No. 10, I hope to express my anxiety about ensuring that the Minister's assurances on the Secretary of State's powers to protect interests at a later stage of the process are meaningful. The amendment is very much in the spirit of what the hon. Member for Wolverhampton, South-West and I said in the Bill's earlier stages. I have no doubt about the intentions of the Secretary of State and the Minister, but if the debt were sold to a place—I use the term in the broadest sense—outside the Secretary of State's jurisdiction, it would be hard to guarantee that protection. Amendment No. 10 would therefore be a useful addition to the Bill, and would increase popular confidence in the Bill's efficacy. My hon. Friend the Member for Daventry (Mr. Boswell), who always comments on these matters with both experience and insight, quoted the example of a hypothetical Lithuanian bank securing a package of loans. I made it clear then that I have nothing against Lithuania, but one can see what he was getting at. There would be real worries among existing and potential debtors if they thought that the loan book would be broken up and spread across the globe. I hope that we might divide on amendment No. 9. As the hon. Member for Hayes and Harlington led on this group of amendments, it is his privilege to make his own decision, but that is ours.