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Sale of Student Loans Bill

Indeed. The phrase, ““No longer with us””, has another interpretation that I did not for a minute wish to suggest. The right hon. Gentleman suggested that we were seeking to make the product more agreeable by allowing purchasers to take more money from students. It is important to put that point right—the Bill is about ensuring that the product does not become more disagreeable. It gives investors the certainty that we will not sell them one product and then legislate to turn it into another product. It is categorically and explicitly not about allowing purchasers to take more money from borrowers, as we made clear with amendments Nos. 8 and 9, which we have already discussed. Amendments Nos. 2 and 3 enable the Secretary of State to give undertakings about the power to make or amend loan regulations under section 186 of the Education Act 2002. On the Opposition amendment to Lords amendment No. 2, it may help if I say a little more about how we expect the undertakings, which would be included in the contract for the sale of the loans, to work. The aim of any such undertakings would be to provide a degree of certainty to potential purchasers that the Government will not amend regulations after a transaction in a way that would affect the nature of the asset and decrease the value of the asset that had been sold or do so in a way that was not set out at the time of the sale. No one buys a product in the expectation that it will turn into something completely different. Purchasers will be concerned to guard against that, not to seek to improve their position. The undertakings that we envisage will not be about changing or promising to change loan terms to improve the lot of the purchaser but about giving certainty about the current position and the Government's intentions over time. The exact wording of such undertakings, if given, would have to be worked out as an integral part of the sale documentation. Through those contractual undertakings, the Secretary of State can set out his intentions not to make particular amendments to loan regulations after a sale or to limit changes to the regulations in particular ways. For example, he might undertake not to propose an increase in the repayment threshold by more than a certain factor in a given year or to change the regulations only to do something that purchasers could predict. Paragraph (a) is necessary—this goes to the heart of the Opposition amendment—to avoid any doubt that such undertakings can be made. The loan terms will continue to be governed by regulations, which are subject to scrutiny and approval in the House. On that basis, I urge the hon. Member for South Holland and The Deepings to withdraw his amendment. I turn to amendments Nos. 7 and 16. If the Government use undertakings in sale contracts, they will be made public as part of the sale process. That brings me to amendment No. 7 on reporting to Parliament. In this House and in another place, value for money has rightly been at the centre of our discussions. Having listened carefully to the arguments, we propose to strengthen the commitment that I gave on Third Reading that the Government would report to Parliament after each transaction. Amendment No. 7 places a statutory obligation on the Secretary of State to report to Parliament within three months of each transaction. He must inform Parliament about the value-for-money assessment that his Department made that led to the transaction going ahead. The report should reflect any Treasury guidance on the required procedures used across the public sector for assessing value for money. The hon. Member for South Holland and The Deepings referred to the role of the National Audit Office and the Public Accounts Committee. The NAO and the PAC have already made clear their intention to report on these matters. The hon. Member for Bristol, West (Stephen Williams) got it right—this is not a matter to be dictated by Government but a matter for the NAO and the PAC, which have made their position clear. In response to the Opposition amendment to Lords amendment No. 7, I am happy to put it on record that the report should cover any effect that the transaction would have on borrowers. As we have stressed throughout the passage of the Bill, protecting the position of borrowers is one of our key and fundamental objectives. I acknowledge the diligent efforts of Opposition Members to press us on how we will meet that aim. I believe that the safeguards in the Bill, not least those contained in amendments Nos. 8 and 9, mean that the sales transaction, including any undertakings that may be given, will have no detrimental effect on borrowers. We expect that the report to Parliament would confirm that. I hope that the hon. Member for South Holland and The Deepings will agree that the commitment that I have made on the record is the appropriate response to what he has sought and argued for. I hope that he is therefore reassured and urge him to withdraw the amendment.