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Sale of Student Loans Bill

I should like briefly to sum up the debate and to refer first to the previous speech, by the hon. Member for Gravesham (Mr. Holloway). There is an expression, ““It's a bit rich,”” and his contribution was extraordinarily rich. The commercial rate of interest that he described was exactly that which was put forward in his party's manifesto at the previous general election. Had a Conservative Government been elected, I have no doubt that he would now be supporting that policy. During the Committee stage, I asked whether that was still the Opposition's policy, and I understand that it is. I am most emphatically against a commercial rate of interest, so if the hon. Gentleman wants to apply pressure on the issue, he needs to talk to those on his own Front Bench. The hon. Gentleman also asked what we should say to students who do not aspire to continue into higher education. I think that we should tell them the facts. We certainly should not exaggerate or use terms such as ““excessive debt””. Under the postgraduate system of repayment that the Government have established, no student repays a penny until they are in work and earning more than £15,000 a year. On the average graduate starting salary of £18,000 a year, the repayments are as little as £5.19 a week. Those facts, along with the facts on the substantial graduate earnings premium—the average graduate will earn, net of tax, £100,000 more than someone with just two A-levels over the course of a working life—and all the other benefits of a higher education, should be at the centre of the arguments that the hon. Gentleman ought to be putting to his constituents. The hon. Member for South Holland and The Deepings (Mr. Hayes), who leads for the Opposition, asked for reassurance and expressed concerns about the value-for-money framework. I have said on many occasions during the passage of the Bill that the value-for-money framework that I have read into the record is rigorous and robust. I have been wondering during this debate whether similar value-for-money frameworks were in place when much more substantial asset sales of public utilities took place in the 1980s. I do not recall that being the case. The hon. Gentleman asked me about the projected valuation of the student loan book. We estimate that the valuation will be £21 billion next year—up from the current £18.1 billion—and £25 billion the following year. He also asked about the selection of the loans for sale, as did the hon. Member for Reading, East (Mr. Wilson). I want to nail this issue, because it is important—I made these points in Committee, but I will repeat them now. From the outset, we will seek to offer for sale all those loans that we can sensibly expect purchasers to be able to value properly. We will be guided by the financial sector experts whom we are procuring to help us to prepare and execute the transactions. For initial sales, that might mean selecting for sale loans that are, for example, sufficiently connected with the repayment system through Her Majesty's Revenue and Customs. Over time, as the repayment history of the loan book lengthens, potential purchasers will be able to model with confidence the value of an increasingly high proportion of the loans. In contradiction to what the hon. Member for Reading, East said, we will explicitly not select loans for sale based on the individual characteristics of loans or borrowers, but just by category such as being in the repayment phase.