---

Sale of Student Loans Bill

My Lords, I should like to echo the words of the noble Baroness, Lady Verma, in saying how much we welcome the co-operation we have had from the Government Benches, particularly the attitude of the noble Baroness, Lady Morgan, to the Opposition Benches. We are very grateful to her for bringing forward various amendments, a number of them at our behest. I too have a few reservations. I was slightly surprised that the Opposition accepted this amendment without question although I realise now that the noble Baroness, Lady Verma, is asking a few questions. We are now getting a quick report after the transfer arrangements have been put into effect. As the noble Baroness, Lady Morgan, explained to us, these transactions have to be simultaneous so that the sale takes place simultaneously with the clinching of transfer arrangements. Inevitably, the report is ex post rather than ex ante, whereas we were asking for an assurance that procedures would be gone through that meant that the Treasury and those involved in the sale were having to ask questions before they entered into these transactions to make sure that they were succeeding in getting value for money. We were all agreed that there was a Catch-22 in this. In so far as the Government revealed their hand as to how they were going to proceed with the sale, it made the commercial transaction itself difficult to carry through because they would, to some extent, be revealing their hand. In some senses this is a second best. Again, we were agreed that the process of the National Audit Office and the report to the Public Accounts Committee—as happened with the sale of the Defence Research Agency and Carlyle—can point up where value for money has not been obtained. The difficulty is that by that time the deal will have been done. If it is bad value for money, the taxpayer suffers. Although there will be a quick report to Parliament here, the very fact that the Treasury guidance has to be revealed makes it the more likely that we shall see the Treasury looking for and wanting to gain value for money. Nevertheless, we are looking at whether we are succeeding in getting value for money after the event rather than before the event. My final point, which I made again at Report, is that the present time is not a good time to try to securitise any loans. The noble Baroness was talking about listening to the ““Today”” programme this morning. I was listening to the ““Money Programme”” over the weekend and it was talking about the complete collapse of the securitisation of loans on both the American stock market and on our own stock market. This is not a good time to try to securitise any set of loans. As I said last time, I wonder why the Government are determined to go ahead with the sale of a £3.4 billion tranche of the loans in the year 2008-09 rather than going for a smaller tranche of the loans to see how things would proceed, or even leaving it completely this coming year and proceeding when the market is more likely to be a good one. It seems to me that it would be sensible for the Government to begin by piloting a relatively small sale rather than going straight into a very large sale of £3.4 billion of the loans.