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Sale of Student Loans Bill

The Conservative Front-Bench spokesman, with some help from a distinguished Back Bencher, the right hon. Member for Wokingham (Mr. Redwood), has already well rehearsed the arguments about how the Government must weigh up the interests of the taxpayer while at the same time protecting the interests of the graduates who have borrowed from the Student Loans Company. I understand that to secure value for money for the taxpayer and to get the best possible circumstances for a successful sale, the Government might want to reduce the uncertainty for any potential purchaser but, none the less, I am worried that Lords amendment No. 2, inserted by the Government, perhaps limits the scope for future Parliaments—or, indeed, for future Governments, as the Government probably have a defined life that may well end quite soon—to alter the terms of loan repayments. There are four aspects of loan repayments that graduates have to face and it would be entirely valid for this Government or future Governments to reconsider them. There is the threshold for the commencement of loan repayments, which is set at a salary level of £15,000. That threshold has been in place for several years now and, unlike virtually all other effective aspects of the tax code, it is not indexed each year, alongside the personal allowance and higher rate tax bands. It has been left frozen at £15,000 for some time and is therefore quite regressive in its impact. It would be legitimate for a future Government or this Parliament to reconsider that threshold. The repayment rate of 9 per cent. is effectively a flat-rate tax—I understand that there are enthusiasts for flat-rate taxes on the Opposition Benches.