Education (Student Loans) Bill [Money] (Hansard, 5 December 1989)

§ Mr. Bob Cryer (Bradford, South)
I thought that, by popular request, I would make a few comments on the money resolution, which is important for several reasons. It is not so much the amount of money involved—compared with what we discussed last night, it is relatively modest—as the fact that there are some peculiar arrangements regarding the Secretary of State's ability to administer it. That is why I want—[Interruption.]

§ Mr. Speaker
Order. We are debating the money resolution. I ask the House to listen.

§ Mr. Cryer
As ever, Mr. Speaker, I am most grateful to you.
We should take some interest in the expenditure that is authorised by the House, sometimes with so little scrutiny. The explanatory memorandum says that 10 to 20 per cent. of the annual outlay will go on administration. I imagine that most people will think that a relatively high proportion. As £109 million is involved in the first year —it will double by 1992–93—it is worth observing that the Secretary of State could spend the money on far more important and pressing things. For example, Bradford local authority has applied for £28 million in capital allocation this year, but the Government, who are of the same political conviction, have awarded it only £8 million.
Buttershaw first school has been partly housed in three temporary classrooms for so long that they are crumbling and have had to be taken out of use. The children have to he bussed for an eight-mile round trip day in, day out, and a school has been reopened to accommodate them. That demonstrates the pressing need for expenditure on educational provision in Bradford.
I should have thought that, rather than concentrate on money resolutions that facilitate a turnover of £109 million in the first year, we should satisfy such a basic requirement as we have in Bradford. I remind the Minister, if he knew it in the first place, that Buttershaw first school, like many schools in Bradford, has been waiting for years for permanent extensions. School rolls in Bradford are increasing, not diminishing.
We have 600 temporary classrooms in Bradford, many of which are reaching the end of their lives. It is time that money was allocated to provide permanent extensions so that our children can have decent facilities. I hope that the Minister notes that. That would represent a far better priority for this money.
One of the rather curious features of the Bill that has not been mentioned so far is that it gives the Secretary of State extraordinary powers, all linked to expenditure. The Bill is basically a thin framework delegating a wide range of powers to the Secretary of State. They include a Henry VIII clause which, as I am sure the House knows well, is a clause which enables the Minister to alter the primary 260 legislation, the Education (Student Loans) Bill, without the necessity of coming before the House for further approval.
Schedule 1, which settles the Bill's ambit, the number of institutions available for students who qualify for loans, can be added to, subtracted from or changed under negative procedure regulations by the Secretary of State without any guarantee that the regulations will come before the House. If, as the Bill makes plain, they are by annulment, the regulations are subject to revocation by a prayer.
As the House knows, there is no guarantee that a prayer will be debated and, even if it is, the debate will last for no more than one and a half hours. If the prayer is down for hearing after 10 o'clock and there is a Division, the time taken by that Division is taken out of the debate. Therefore, only one hour and 10 minutes will be given to debating the regulations, and then only if the Government Whips agree, yet those regulations affect primary legislation. In effect, the Minister is being given the power to produce the equivalent of primary legislation without the House necessarily being involved. That is a wide power, to which attention should be drawn.
Schedule 2 sets out the financial parameters of where the £109 million will be spent in the first year, doubling by 1992, and so forth. When the Under-Secretary of State replied to the previous debate, he made no reference to the arrangement which may provide for the loans to be made and recovered. Arrangements have no statutory meaning. [Interruption.] As a Back-Bench Member says sotto voce, I missed some of that speech because I was chairing the Joint Committee on Statutory Instruments which was taking extensive evidence from civil servants on yet another statutory instrument which in the Committee's view was defective and that will be reported.
Presumably, the arrangements are those provided for by regulation. I know of no statutory provision whereby Ministers simply have the right to arrange things. They must present what they do to the House for scrutiny. If they have the power simply to make arrangements, that does not occur.
Schedule 2, paragraph 3(4), says: Regulations made under paragraph 1(1)(b) or (c) above may confer functions on any such person or body as is mentioned in sub-paragraph (1) above, including power to exercise a discretion in relation to any matter for which the regulations provide. In its strict legalistic phraseology that means that the House is handing over to the Secretary of State power to sub-delegate regulation-making powers. I am sure that the House would not agree to that if there was a clear alternative.
That means that the Minister, through regulations, can confer functions—that is, hand over powers—on any body that is provided for in the first paragraph of this part of the schedule, which means those persons and bodies that will deal with the loans and repayments. It includes a power to exercise a discretion in relation to any matter for which the regulations provide. Therefore, the Minister is handing over a power to a body that can simply ignore the regulations that the Minister, if a prayer is tabled, will bring before the House for debate. This is an important matter and relates specifically to the money, so it is not unfair to raise it on the money resolution.
Paragraph 3(7) of schedule 2 says: 261 Any person or body having the function of recovering loans under the arrangements may, for appropriate consideration, assign the right of recovery to a third party. That means that debts can be sold, and that means that the accountability of the Secretary of State to the House for the money resolution—that is, paying all receipts into the Consolidated Fund—is simply moved a stage further. He can say that no money is coming in and he cannot get any money back, because the person or body who had the function of recovering loans—the person or body mentioned in schedule 2—has assigned the right of recovery to a third party, and that party has been wound up in 14, 15 or 100 cases.
The detailed administrative provision for this legislation is through regulations. The accountability for delegated legislation is minimal, and the Minister is abusing it. The Government claimed that they would take government off our backs, but they are producing more delegated legislation each year than was produced by the whole of the 1974–79 Labour Government. The Tory Government claimed that that Administration produced a huge mass of legislation that bore down on manufacturing industry and the population in general. The Government are producing more instruments and it is an abuse of the House to provide for annual expenditure of £100 million to £200 million in such a way that the responsibility is one stage removed, through regulation and delegated powers granted by the legislation. Then, within that framework of legislation, the Government have provided for sub-delegation of legislation. That makes the accountability of the Minister to the House one stage further removed and even more diffuse.
We should look carefully at the money resolution. Having been prepared with a brief because I might speak, the Minister should explain these points. They are reasonably important and merit an answer. The money resolution debate is an important opportunity, brief though it is, to raise these issues and try to get something on the record.

§ The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson)
The hon. Member for Bradford, South (Mr. Cryer) has a habit of raising points such as these. He spoke first about the contrast between the estimated administrative cost of the order of £10 million to £20 million and the flow of funds in the early years of the scheme. He made a perfectly fair debating point, but if we are to set up a student loans operation, quite extensive machinery needs to be established before the volume of the business builds up. 262 We shall need staff, a computer and buildings. The amount of money involved will build up eventually to thousands of millions of pounds. As we argued in the previous debate, big savings will be made from the start of the operation of the scheme. Unlike the alternative envisaged by the Opposition, the loans scheme will result in due course in substantial savings building up, in relation to which the administration costs will be rather small.
Let me say a word about the arrangements that are to be embodied in regulations to be brought before the House.

§ Mr. Win Griffiths (Bridgend)
The amounts recorded for loan outgoings in the financial and explanatory memorandum are quite different from those recorded on page 43 of the White Paper. I see no mention of the access funds, which are part of the scheme, in the financial and explanatory memorandum, nor is any account taken of the costs of deferral or default. Are those taken into account anywhere in the memorandum? The memorandum states that loan repayments will exceed the cost of the scheme "in due course". Can the Minister tell us exactly when he thinks that will happen?

§ Mr. Jackson
That depends entirely on the assumptions made in the projections. The hon. Gentleman knows that perfectly well; we have discussed it on many occasions. The hon. Gentleman asked about access funds. We do not propose to take powers for that purpose in the Bill, because we already have powers to constitute such funds, and we shall set them up under those existing powers. Their cost does not, therefore, arise in the explanatory and financial memorandum, but it is, of course, taken into account in the White Paper. The figures differ because the White Paper refers to the academic year and the financial and explanatory memorandum to the financial year.
Let me finish answering the hon. Member for Bradford, South. The arrangements will be embodied in regulations that will be brought before the House and will be constructed by analogy with the arrangements for the payment of student grants. We discussed all that in our previous debate. We also discussed the regulation-making powers—in that picturesque phrase, "the Henry VIII clause". We have discussed all these matters extensively. I have nothing to add to what was said, and I do not believe that the hon. Member for Bradford, South has added much to the argument.
We merely seek to establish in a flexible and responsive way the legal arrangements for paying student loans that are most sensible in terms of the administration of a loans scheme. That is what we propose, and that is what we hope to be able to achieve.
Question put and agreed to.