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Sale of Student Loans Bill

I share the reservations expressed by the noble Baroness, Lady Verma, on this issue. It is important that there are some criteria by which value for money is judged. On these Benches, as on those of the Opposition, it is well understood that the Government have a big hole in their forecasts of public sector revenues, which they need to fill, and this is a very useful way in which to fill that hole. In a sense, carrying the whole process to its absurd extreme, it would be possible for the Government to securitize the future Inland Revenue income tax streams of revenue and raise quite a lot of money. One could argue that that is what the national debt partly is, that we are borrowing money on the expectation that we can meet the costs of servicing it over time. On Amendment No. 7, I understand the difference between the securitisation process and the process of negotiating with a number of competitive bidders for a block of loans. As I understand it, when the Government sold off the mortgage-style loans in 1999, the deal done with Nationwide and Deutsche Bank was a one-off sale. There were a number of competitive bidders, and Nationwide and Deutsche Bank were successful in buying up that block of loans. This is, of course, a very different process, very similar to that used by Northern Rock when it created Granite as its special-purpose vehicle and used it to sell on a number of bonds based on its mortgages. We saw with Granite the difficulty of selling on some of the sub-prime blocks of mortgages. I therefore come back to my point about risk management, and the fact that the Government might be left with the riskier tranches of loans. The Government say that they might be more attractive to certain members of the market, but they may not be attractive to any part of the market. Certainly, given the present difficulty with the sub-prime market, it is likely that they would not be attractive to any part of the market and that the better loans would be more attractive. On the core issue of how we secure value for money, we need something in the Bill that enables the public to feel reassured that the Government are seeking it. We shall go on looking for some way of doing that.