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Sale of Student Loans Bill

I shall speak to Amendments Nos. 3 and 5. I want to touch briefly on a matter that was the cause of some concern in another place, and as a result, some assurances have been given. However, I do not feel that they are entirely sufficient. The first of our amendments in this group concerns guarantees that there will be no effect on the students. In this respect, our amendment is very close in sentiment, if not in wording, to that tabled by the noble Baroness, Lady Sharp. The point of our amendment is to strike at one of the primary concerns regarding this Bill, which is protecting students’ interests. I appreciate that the Government have made strong statements that there will be no real impact on students. But how far does this limitation affect the commercial viability of these loans as a product? I understand that the Government have had considerable consultation on this matter and I hope that the Minister will explain the point in detail. The fact remains, however, that we want to be absolutely certain that the terms and conditions will be identical whether the students are paying their money back to the Government or a private body. As I mentioned, we have received some assurances to this effect. However, the Bill would allow the terms to be changed at a later date simply through consulting the Secretary of State. Bill Rammell, speaking in another place, made the point that even at the moment, "““the Secretary of State has the power, if backed by Parliament, to alter the terms and conditions of access to student loans.—[Official Report, Commons, 4/12/07, col. 48)." The important part of that sentence is, ““if backed by Parliament””. However, if the Bill is passed and the loans are sold, will it be easier for the terms and conditions to change? Will it take only the consent of the Secretary of State to alter the conditions if the loans are sold, whereas at the moment it requires parliamentary scrutiny? Will the noble Baroness assure us that if there is any danger of the terms and conditions changing, the changes to the terms of sold loans will be subject to as rigorous parliamentary scrutiny as a change to government loans? Our amendment would put this in the Bill. Would it be acceptable to have some sort of parliamentary mechanism mentioned in the Bill, should changes be considered? Further, does the Minister accept the amendment that organisations underwritten by Her Majesty’s Government will not qualify to be purchasers? Is she willing to give a guarantee that that will not occur, although it may seem unlikely? By way of clarification, can the Minister comment on the recent articles and news items in which it was reported that students were overpaying their loans and that there was no one to check with the Student Loans Company if and when they had been paid, or indeed what amounts were outstanding? The payments went to HMRC and remained in that department for a year. Surely that would cause chaos if this persisted after loans were sold. This seems to be a potential pitfall that could adversely affect students to a very large degree. It seems that during the year that the money was kept with HMRC, the Student Loans Company had no access to information to forward to students inquiring about the status of their loans. Indeed, the Student Loans Company itself did not have the information. Will the Minister say how this situation will be remedied urgently and whether, if students have overpaid, the Government will be paying lost interest to those students?