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Sale of Student Loans Bill

I thank the noble Baronesses for their comments. I hope I can come back with some reassurances. The noble Baroness, Lady Verma, asked what the objective of the amendment is. We have said on a number of occasions that it is about creating as much certainty as possible for potential purchasers so that they can properly value the loans. By reducing uncertainty, we reduce the likelihood that the value of the loans would be greatly reduced. That is the objective. I need to stress that we are talking about an additional option or tool. The noble Baroness, Lady Sharp, said ““This will happen””, but I need to be clear that the undertakings may be made. It is an additional tool. We have the option of compensation in the Bill as well, which the noble Baroness, Lady Verma, highlighted. With regard to transparency, which is very important, as I said, any agreed undertaking would be made public as part of the sale so there would be transparency about agreements. Parliament can repeal any Act it likes at any time, so the constitutional issue about the sovereignty of Parliament and our role as parliamentarians is not affected. I understand the noble Baroness’s concerns. This is not something we would consider lightly, but we will not be able to achieve value for money if purchasers face uncertainty because the asset they had bought could fundamentally change. That is what the instrument of compensation is for. Therefore, this represents another option. We need to be clear that we are referring to making undertakings about the loans that are sold. For sold loans, it would not be possible for terms and conditions to change in the middle of their repayments. These undertaking refer to sold loans. In the same group, we have talked about including our commitment to ensure that students whose loans have been sold are not treated less favourably. We need to be clear that future Governments could still change eligibility and entitlement for new loans; for example, the levels of grant and loan, and the income thresholds, for receiving them. The Government have made a public commitment that in 2010, the threshold for repayment will increase with RPI. The noble Baroness, Lady Verma, asked about the classification of sale. The Office for National Statistics follows guidance from Eurostat in setting out the classification rules for a true sale. Eurostat is reviewing its guidance, which may change, and may change again over time. Giving undertakings is another way to reassure loan purchasers that they are not exposed to political risks while taking on economic risks. I know that the noble Baronesses, Lady Verma and Lady Sharp, are aware of these points. I have found this discussion very useful, but I need to come back to the original motivation for laying these amendments, which are about creating certainty for potential purchasers. We are talking about possible undertakings being made on the treatment of sold loans. As for future Governments, as we know, and as I am trying to stress throughout our discussions, we are talking about a rolling programme of the sales of student loans going forward, which would be a feature of the student loan book. We need to have all the instruments at our disposal to ensure that we achieve the value for money that Members of the Committee were espousing the need for earlier. In the mean time, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.