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Sale of Students Loans Bill

moved Amendment No. 5: 5: Clause 3, page 3, line 29, at end insert— ““(6A) In entering into transfer arrangements the Secretary of State shall ensure (whether by reliance on subsection (6)(b) or (c) or otherwise) that the Secretary of State will be party to any further transfer arrangements.”” The noble Baroness said: My Lords, in Grand Committee, in response to an amendment tabled by the noble Baroness, Lady Verma, I undertook to consider onward sales and how the Secretary of State can ensure that borrowers are protected. We are united in our view that borrower interests must be fully protected in any sales process and beyond. As I said in Grand Committee, the borrower’s primary protection lies in the fact that purchasers will not be able to change the repayment terms, which remain governed by regulations. However, we want the added safeguard that the Secretary of State can enforce any protections contained in the sales contract too, such as having access to the same complaints system. That is why subsection (6) enables the initial sales contract, to which the Secretary of State is obviously a party, to contain provisions that make sure that he is also a party to any onward sales contract. Although, as I said previously, we think it unlikely that the legal title to the loans will be sold on, we want to be absolutely sure that the Secretary of State can enforce any contractual terms that he might need to in order to protect borrowers. We have listened to noble Lords’ arguments and to the points made in another place and we propose an amendment that makes it a requirement that the Secretary of State ensures in the initial sale contract that he is party to any subsequent contract transferring legal title to the loans. We have drafted the amendment in such a way as to enable that to be achieved by either of the contractual devices set out in subsection 3(6)(b) and (c) or by other methods with the same effect. I am grateful to the noble Baroness, Lady Verma, for her constructive suggestions as we seek to ensure that borrowers are fully reassured that they are protected. I beg to move.