LOANS FOR STUDENTS

HC Deb 04 April 1990 vol 170 cc1294-311

Lords amendment: No. 7, in page 3, line 40, at end insert—

9.30 pm

Mr. Smith

She is about as unrepresentative as the right-wing lunatics who have been advising the Government all the way through this steady march towards education depending on ability to pay rather than ability to benefit.

It is because we believe that the ability to benefit should be the criterion for access to higher education that we wanted the Government to accept the full spirit and wording of the amendments initiated by our noble Friends in the Lords, and it is why we wish that they had not added in this opportunity for a higher proportion of loan to be brought in by secondary legislation under the affirmative procedure.

If this top-up loan scheme is truly a scheme, as the Government have said, based on parity between loans and grant, they should be prepared to accept that definition in the primary legislation and recognise that further primary legislation would be necessary to change it. By conceding only what they have conceded, the Government have given away their real intention to go further down this slippery slope and make access to higher education depend on ability to pay. That is wholly unacceptable to us and to most of the public.

Mr. Simon Hughes

The only comment I want to make about the sedentary disclaimer about the views of the hon. Member for Billericay (Mrs. Gorman) and their representatives of the Tory party is that Conservative politicians who represent Essex constituencies always seem to be the most hard-line brand of Toryism personified. If anyone wants to hear liberal views about education I suggest he stays away from the boundaries of Essex. I do not know what the poor people of Essex have done to deserve such a collection of right wingers as they enjoy now and have enjoyed in the past—

Mr. Pawsey

And they have huge majorities.

Mr. Hughes

Sadly, as the hon. Gentleman says, some of them do. As the hon. Member for Oxford, East (Mr. Smith) reminded us, they include among their number another candidate for the Tory party succession—the right hon. member for Chingford (Mr. Tebbit).

I support the Opposition amendment. The Lords amendment was passed because the Government would not concede the principle that, when the regulation was drafted, it would not allow loans to go up beyond 50 per cent. There is so much opposition to the principle that loans should exist at all, let alone that they should go up to 50 per cent. of total funding for students, that it would have been enough to hold the line at that. The consensus in another place was that, if it was Government policy to change the system of fully funded student grants so that only half of students' funding came from grants, that should at least be written into the Bill. It would have been preferable if the last lines of the Lords amendment had been amended to take account of that.

One of the great concerns that has not been allayed throughout all our deliberations is the fear that, if students are required to decide to go on to higher education but to borrow to fund it, that in itself will prove a disincentive; and the greater the borrowing, the more of a disincentive it will prove.

If the Government argue that applications this year are up, as they are, those who do not believe that loans will be a disincentive should remember that that increase is on the basis of a grant system and that, even if there is only a small, although noticeable, effect on the scheme at the beginning, it could become more damaging the higher the percentage of money loaned in relation to the grant.

No member of the Committee, including Ministers, could discover one country that has gone from a grant system to a grant and loan system. Therefore, there is no precedent for the argument that a loan system, even in part, would not be a disincentive. If our argument that it will be a disincentive proves wrong, we shall admit it, but Ministers should not take the risk. That is why the proposal is flawed.

Mr. Win Griffiths (Bridgend)

As my hon. Friend the Member for Oxford, East (Mr. Smith) said, it is strange that the Government should accept the need to write into the Bill that, in the fulness of time, the 50:50 parity proposal will come into being, yet in the same amendment provide to allow that to be changed without going through the process of primary legislation.

We are talking about a significant number of students who would be affected if the legislation were in place today. I elicited from the Department of Education and Science the fact that almost 40 per cent. of all students currently studying received the full mandatory award. Some 151,000 students in universities, polytechnics and other higher education institutions will be dramatically affected by the proposal.

Mr. Jackson

They will have more money.

Mr. Griffiths

Some will have more money, but they will have to pay the money back. Moreover, the Minister and his colleagues have consistently refused to tell us how many students currently receive housing benefit of more than £420 a year, as the loan is planned to be in the first year, and the £310 it is planned to be in the last year. They have refused to give that information, because the likelihood is that thousands upon thousands of students will be worse off.

Dame Elaine Kellett-Bowman

The hon. Gentleman says that students will have to pay back the loans, but he omitted to mention that they will not have to pay back anything until they are earning £11,500, which, compared with the income of some of those who will be contributing to their education, is a substantial income.

Mr. Griffiths

The hon. Lady is leading me down a path which is not covered by the amendment. However, anyone who chooses to study for a degree, given that they have reasonable qualifications at GCSE and A-level, will have already sacrificed earnings in excess of £50,000 at current rates by the time that they receive their degree. That is the sum that they could have earned by taking a job at 16 or 18. In British Steel, British Gas, Marks and Spencer plc, W. H. Smith and Son, Ltd. or local government, between 16 and 22 an employee would have earned over £50,000. Therefore, people studying at university will experience a loss in real income because they will lose the full grant.

With the passing of time, the grant will have only 50 per cent. of its value, and the rest will be made up by a loan which they will be expected to pay back. That is an additional burden which students have not had. Given the fact that the Government will place an additional burden on students when they go into employment after university—

Mr. Pawsey

I am grateful to the hon. Gentleman for giving way. His courtesy is always appreciated; I mean that sincerely. Does he not accept that the global value of social security payments in one form or another is about £68 million, whereas the total value of the loan is about £200 million? Therefore, students will receive a substantial additional amount in resources. While I acknowledge the fact that some students will be worse off, we have the access funds. As we have heard from my right hon. Friend, £20 million will be available to help students who are in difficulty because of the loss of housing benefit. Students will be much better off in real terms because of the amount of resources being made available to them, so the hon. Gentleman's argument is threadbare.

Mr. Griffiths

The trouble with the hon. Gentleman's point is that, at the moment, it is all hypothetical. We do not know exactly how students will be affected. We do not know how many students who currently receive the full mandatory award will be deemed to be eligible for money from access funds, nor do we know how much they will get, or what the difference will be between the mandatory award which a student currently receives, plus payments like housing benefit, and what he will get in future. The Government cannnot even tell me how many students will be worse off—

Mr. Pawsey

The hon. Gentleman is not denying the figures.

Mr. Griffiths

I am not denying any figures. All I am saying is that it amazes me that a Conservative Member can talk with such confidence about the number who will be better off because of the increase in access funds, given that over 150,000 students receive the full mandatory award, when the Government cannot tell us how many students will be adversely affected by the introduction of the loan scheme and the loss of housing and other benefits.

The lack of information gives us no confidence in what the Government are trying to do. It is an experiment for a large part of the population on whom we will depend for our well-being and our success in world markets. I am surprised in one way that the Government insist on including in the amendment the ability to vary the figure later without primary legislation. In one sense it astonishes me; on the other hand, when I remember that, previously in his ministerial career, the Secretary of State was in the Treasury, it does not surprise me.

In the White Paper, there was a wonderful catalogue of tables based upon an inflation rate of 3 per cent. into the next century. We remember too that all the calculations were done on the basis of a student population which did not alter. Given all that, we wonder why this provision is in the Bill. It can only be to make it easy to vary the amount later.

It is as though, last June or July, at a private meeting between Treasury and Education Department officials, the Treasury said, "The scheme is costing much more than the Department ever thought, and the Treasury cannot really afford it. You will have to cut, and the only way of doing that is by increasing the size of the loan, and thereby get more money back from the students as soon as their course is finished."

Mr. Beggs

Does the hon. Gentleman agree that the country as a whole has a serious problem with growing debt, and that we should as a matter of principle oppose encouraging young people to incur debt for any reason?

9.45 pm

Mr. Griffiths

I entirely agree. Given that the Prime Minister herself has said so much about how bad it is for people to get into debt, it is surprising that she now encourages them to do so.

That part of amendment No. 7 that allows the Government to vary the limit without recourse to primary legislation must have the purpose of allowing the Government to reduce the grant, increase the loan and cut costs—which are already running headlong out of control.

I hope that the Government will have the good grace —I know it is late, and that everyone wants to go home —to withdraw the amendment. The Under-Secretary has a gentle smile on his face, and I hope that it is one of agreement.

Mr. Jackson

I hope that I may be allowed to chide the hon. Member for Bridgend (Mr. Griffiths). He made an excellent contribution in Committee, becoming very involved in all the debates, but he seems to have forgotten about annex D to the White Paper. If he studies that annex, he will find that his arguments about income forgone are completely refuted. At one stage, it seemed as though the hon. Gentleman had learnt that White Paper off by heart. That was a noble exercise on his part. If he will return to it, he will see that his point is met.

Mr. Andrew Smith

Is that the same annex that suggests that there will be no increase in student numbers past the year 2000?

Mr. Jackson

The hon. Member for Oxford, East (Mr. Smith) is mixing up his annexes. Annex D presents economic analysis of the difference between personal and social rates of return from higher education.

The Government amendment places on the face of the Bill the provision that a student's maximum loan facility should not exceed his or her maximum grant. It is similar to a probing amendment tabled in Committee by the hon. Members for Blackburn (Mr. Straw), Oxford, East and Manchester, Blakeley (Mr. Eastham), so I inferred that it would be generally acceptable. In any event, the Government have always made it clear that, when the loans scheme reaches maturity, the value of the loans and the grant will be broadly equal.

We recognise the concern expressed in another place that statutory provision is required to lend weight to the Government's intentions. We have produced an amendment that meets that concern and retains sufficient flexibility to allow future Governments to respond to changing circumstances without fresh primary legislation. If one assumes an inflation rate of 3 per cent. between now and then, that point will not be reached until 2007. If inflation reaches 6 per cent., that point will be reached a couple of years earlier. We shall not reach the 50:50 stage until a long time ahead—several Governments away from the present Government. In fact, we may get to it at about the time of the first Smith Administration—by which I mean, of course, the Andrew Smith Administration.

The amendment allows the loan and grant balance to be altered beyond the 50:50 ratio, but only subject to explicit parliamentary approval. The loan regulations, which would otherwise require the negative resolution procedure beyond the scheme's first year, would be subject to the affirmative resolution procedure if they were to involve a loan facility exceeding the value of the grant. That, we believe, would allow that first Andrew Smith Administration the flexibility to build on the success of our student loans scheme if it was felt appropriate to do so, but to do so in line with proper parliamentary scrutiny.

Mr. Mike Watson (Glasgow, Central)

Does the Minister accept that, if the scenario that he is suggesting comes to pass and the loan accounts for more than 50 per cent. of maintenance, the Government will effectively have misled the House and the general public by calling the scheme top-up loans for students? They will not be top-up loans, because they will be more than 50 per cent. He cannot have his cake and eat it.

Mr. Jackson

I refuse to join the hon. Gentleman in speculating about this long-distant horizon. I believe that the scheme will be a great success and that it will be possible for that Smith Administration, in perhaps the middle of the first decade of the next century, to consider how to take the matter further forward.

Mr. Simon Hughes

Are the Government ever surprised when people accuse them of wanting to do things that they pretend they do not want to do—in other words, of having a hidden agenda? It is not surprising that people do not believe the Government when they say that loans will be only 50 per cent., and then write into the legislation a provision saying that they can be more than 50 per cent. Why do Governments bite off more than they can chew and always ask not just for the cake but for something in addition?

Mr. Jackson

I am not surprised. After all, Opposition Members are ingenious in finding hidden agendas, even if they have to invent them. The electorate are more sensible and see through such contentions. They saw through them at the last three general elections, and they will do so again.

The Labour amendment to the amendment would remove the element of flexibility which we wish to leave in place for the benefit of the Smith Administration by requiring primary legislation before the loan facility could exceed the grant value. We think that that would be a waste of parliamentary time. We are thinking about the situation down the track. The affirmative resolution procedure is, we believe, sufficient and ensures that the regulations that would be found unsatisfactory by either House could be voted down.

Question put and negatived.

Lords amendment No. 7 agreed to.

Mr. Speaker

Because, for reasons given at the start of the debate, Lords amendment No. 8 imposes a charge on the public revenue not authorised by a resolution of the House, under paragraph 3 of Standing Order No. 76, the Lords amendment is deemed to be disagreed with.

Lords amendment: No. 9 in page 4, line 10, at end insert— (4) Regulations made under this paragraph shall allow special conditions to be set in respect of repayment of loans for disabled students or graduates.

Read a Second time.

Amendment proposed to the Lords amendment, amendment (b) at end insert 'taking into account the loss of social security benefits to deaf students whilst eligible for loans'.—[Mr. Andrew Smith.]

Mr. Speaker

It will be convenient at the same time to discuss amendment (c) to the Lords amendment, at end insert ', and shall be subject to approval of both Houses of Parliament'.

Government amendment in lieu of the Lords amendment, in page 3, line 40, at end insert— '(1B) Regulations under sub-paragraph (1)(b) above shall make such separate provision as the Secretary of State considers appropriate with respect to the repayment of loans by borrowers who are disabled.'.

Mr. Alfred Morris (Manchester, Wythenshawe)

The Opposition amendments are designed to strengthen the Lords amendment, not least in respect of some of the most needful of students who are deaf. I congratulate the other place on its achievement in carrying out the intentions of the amendment to which I spoke for the Opposition on Report in the House of Commons.

In this House, the Minister expressed sympathy and gave a half-promise of eventual support. The Lords were no more content with ministerial statements than my hon. Friends and I were here, but they were able to vouchsafe the interests of disabled students in the Division Lobby.

I know that Baroness Darcy de Knayth and Lord Henderson of Brompton were especially instrumental in winning the day and I thank them, as well as my noble Friends in the other place, for both the humanity of their concern and the success of their advocacy.

One financial consequence of disability is the reduced earning power of many disabled graduates, compared with their non-disabled colleagues. In some cases, disabled graduates will remain unemployed and will be unable to repay a loan. Others will earn less and may be burdened by a loan for longer than their non-disabled colleagues. Sadly, all too many disabled graduates fail to find work or succeed in finding only low-paid employment.

The report on disability in Great Britain from the Office of Population Censuses and Surveys shows that only 31 per cent. of all disabled adults of working age are actually working. That compares with 69 per cent. of the population as a whole. The ratio for men is even worse —33 per cent. compared with 78 per cent. Those findings shout the need for the action taken by the other place.

The Government's own record, in terms of jobs offered to people with disabilities, is among the worst of all employers. How many registered disabled people does the Department of Education and Science employ? Again, is the Secretary of State aware that the earnings of disabled people who find work, in whatever employment, are substantially lower than those of non-disabled employees? Even many disabled people in better financial circumstances have to spend all their disposable income on the extra costs arising from their disability.

The Government tend to dismiss the claims of organisations of and for disabled people about the extra costs of disabled living. Yet there are right hon. and hon. Members on both sides of the House who know, from close contacts with their disabled constituents, that the Government's own estimates of the extra costs of disabled living do not match the real costs of disabled people. The fact is that they find it extremely difficult to make ends meet. It may well be that a disabled person will never be able to repay a loan because of the generally lower earnings of disabled graduates. If their earnings are never likely to exceed the 85 per cent. threshold, it is not fair to expect them to have an increasing debt, in cash terms, held against them until it is cancelled when they reach the age of 50 or 60.

There is another important matter that I must raise in the debate. It concerns the Government's intentions in regard to young people who have become disabled after they graduate. How does the Minister intend to approach their problems? Are they to be pursued for the repayment of loans? I have been approached by a number of organisations whose members are deeply concerned about the Government's intentions in regard to people who become disabled after they leave places of higher education. I hope that the Secretary of State, in his reply, will state clearly the Government's intentions as they affect such people. They will suffer the same difficulties, in terms of employment, as other disabled people. They will have the same financial problems. What assurance can the Minister give about the problems that they face?

Time is strictly limited, due to the guillotine. I ask the Secretary of State to appreciate that there is still some uncertainty about his intentions about disabled students. They are looking tonight for a reassuring ministerial statement. I press the Secretary of State to respond positively to their concerns.

10 pm

Mr. Alistair Burt (Bury, North)

When the Bill was in Committee, both I and other hon. Members moved a series of amendments relating to disabled students. I listened with great care to the right hon. Member for Manchester, Wythenshawe (Mr. Morris). I disagree with his suggestion that the Government did not listen to the views of those who represent disabled people. The Minister with responsibility for higher education was at pains to speak to those who put forward the case on behalf of disabled students, in particular deaf students, and suggested that further consideration would be given, either in the other place or at another stage, to the points that they had made.

I have made a note of several things that have been done since the Committee, which have given effect to those promises. First, the disabled are now specifically recognised in the Bill. That is provided for in Government amendment (a) to Lords amendment No. 9. Secondly, we asked that the access funds should be increased. We recognised that disabled students might want to have access to those funds for their own purposes. A recent announcement has boosted the access funds. That will help disabled students. Thirdly, on 19 March 1990 my right hon. Friend the Secretary of State made a number of announcements about increases for disabled students. The basic disabled students allowance is to be increased by 30 per cent. in 1990–91.

In addition, another £3,000 will be made available for specialist equipment and £4,000 will be made available for non-medical helpers. That is a direct result of the pressure applied by the Royal National Institute for the Deaf, to which I pay tribute for the care and concern with which it presented its case on behalf of disabled students. The Government also responded to the representations that were made by hon. Members on both sides in Committee, on this difficult and sensitive subject.

We were deeply impressed by the case put to us by deaf students about the difficulties that they face when they enter higher education. They have to overcome considerable hurdles. Those difficulties are not faced by other students. Deaf students also experience difficulties while going through higher education because of the equipment and non-medical assistance that they need, such as interpreters. I believe that the Government have listened to their case. I very much welcome my right hon. Friend's announcement.

Mr. Alfred Morris

I did not say that the Government refused to listen to the organisations representing disabled people. However, they have refused to respond to their concerns. The Lords amendments were carried in spite of, not because of, Ministers' attitudes. I hope that tonight there will be a statement which will reassure those organisations. I am sure that the hon. Gentleman joins me in making that request to the Secretary of State.

Mr. Burt

I go part of the way with the right hon. Gentleman, but I still hold that the Government's response was a little more genuine than he is prepared to concede. The Government's response in the other place showed that more clearly than the right hon. Gentleman has suggested.

Mr. John Hannam (Exeter)

My hon. Friend may recall that, on Report, I tabled amendments to help disabled students throughout their period of study and during the repayment period. The Minister with responsibility for higher education accepted the purpose of the amendments and gave an assurance that he would take the necessary steps when the Bill was considered in the other place.

Mr. Burt

I am grateful to my hon. Friend and I am sure that my right hon. Friend the Secretary of State will comment on that when he speaks.

I understand that draft regulations relating to disabled students' social security entitlement are presently being considered by the Social Security Advisory Committee. That gives us a further opportunity to press our case on behalf of disabled students. I am sure that hon. Members on both sides of the House will want to do so.

I should like to thank my right hon. Friend for the attention that he has given to this particularly sensitive matter. Perhaps he has not given us everything that we should have liked, but the Government have moved a long way from the Bill's starting point, when rather too little consideration seemed to be given to the needs of deaf and disabled students. These concerns were raised in Committee, however, and my senior colleagues have listened, and I believe that the Bill will provide the reassurance that the right hon. Member for Wythenshawe genuinely requests. I hope that he will be reassured when my right hon. Friend comes to answer.

Mrs. Margaret Ewing (Moray)

Like others who have spoken on this group of amendments, I intend to be brief because, like the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and the hon. Member for Exeter (Mr. Hannam), I have spoken previously on the needs of disabled students, not in Committee because I was not a member of the Committee, but as far back as 20 October when we discussed the White Paper, and on Report in the House.

In welcoming the announcements made by the Government, we must all pay tribute to the strength of feeling on both sides of the House and to the work of the organisations based outwith the House, which so effectively represent the needs of disabled people everywhere.

If certain hon. Members tend to sound grudging, it is perhaps because many of us would have expected the Government automatically to give consideration to those students in the initial drafting of the Bill. It is sad that we have had to get over so many hurdles to ensure that those genuine needs are recognised.

I have some brief questions to put to the Secretary of State, which I hope that he will be able to answer, particularly in view of the fact that we have not yet had detailed statements of the exact workings of the figures that have been announced. Can he tell us exactly how the funds will be administered? There is an important issue at stake. In Scotland, for example, will the regional education authorities, along with the Scottish Education Department, be involved in deciding how the funds are administered and how disabled students will have access to the extra money? It is not clear whether there will be a cash limit on the amount made available to disabled students. How will the priorities be decided? Who will take those decisions? That is vital to our students, because disability comes in many forms and requires different attitudes and treatment.

I should like again to refer to housing benefit as it affects some of our disabled students. As you know, Mr. Speaker, we have been unable to discuss amendments Nos. 8 and 10, which relate specifically to this issue, because of privilege. However, it has been pointed out, both in the other place and in letters that many of us have received from the Royal National Institute for the Deaf, that, while housing benefit has been defined as continuing to be available to some disabled students, it will certainly not be available to all. A large number of disabled people who are not eligible for disability premium or severe disability premium will therefore not be eligible for housing benefit; yet housing benefit could be of key importance to disabled students in helping them to enter higher education or to continue their studies. Can the Minister clarify whether all students suffering from deafness, blindness, dyslexia, arthritis or any recognised disability will have the right to apply for housing benefit during the course of studies? Such a guarantee would receive a broad welcome from all the organisations involved in representing the needs of the disabled.

While welcoming the announcements, I hope that the Secretary of State will give us further details, and perhaps tell us when the social security offices will be able to spell out in more detail the exact implications of previous statements. Will there be an opportunity for right hon. and hon. Members to discuss them with the Secretary of State? I certainly hope that he will make a public statement and allow us to debate the matter.

Mr. Dafydd Wigley (Caernarfon)

Does the hon. Lady agree that income support and housing benefit are in no way intended to meet the needs of disability, but are intended to meet the basic needs of living? Those benefits do not in any way meet the needs of deaf or otherwise disabled students, so additional benefits are required.

Mrs. Ewing

The hon. Gentleman makes a clear point, and given his recognised knowledge of disability, I am sure that the Secretary of State will take it into account.

I urge the Secretary of State to ensure that the House is given full details so that we can consider the matter with clear minds and a determined attitude, to ensure that no disabled students are disadvantaged.

Mr. Win Griffiths

I, too, shall be brief.

I join other right hon. and hon. Members in welcoming the Government's moves to help disabled students, but let us not give the impression that it was an easy process. There was considerable debate in Committee and much lobbying behind the scenes, and, perhaps because of the way in which it is worded, the Government amendment, perhaps unintentionally, provides that the special conditions will apply only to borrowers who are disabled and not to those who were able-bodied when they borrowed the money but became disabled later, a point raised by my hon. Friend the Member for Oxford, East (Mr. Smith).

I should like to mention a case to illustrate the essential need to consider disabled students and to take a decision, and to seek an assurance from the Secretary of State that, when assessing the income of disabled graduates, the Government will take fully into account that part of their income which is needed to cover the cost of disablement. The case also illustrates the inadequacy of the disabled students allowance. It involves a social work student in her second year at a midlands university. She is seriously contemplating giving up her studies and her ambition to become a social worker working with disabled people. She is 25 years old, she has cerebral palsy, is physically unable to write and has severe mobility problems.

At the beginning of her course she had to spend £2,500 on an adapted computer with twin disk drive and original commands plus an adapter printer. In addition, she has had to find £90 a month to pay two part-time carers to drive her to the campus as that is the only feasible means of transport available. Out of a maximum of £765 disabled students allowance, which is now going up to £1,000, she has had to pay £350 a year out of her maintenance grant towards those extra costs. She will have those extra costs after she graduates and, hopefully, finds the employment to which she aspires.

Will the Secretary of State assure us that disabled students' extra needs are taken fully into account when assessing their disposable income and the level at which they trigger off their repayments?

Mr. Simon Hughes

I join the tribute paid to the concessions made by the Government and to the work of those who represent the disabled. They have made strong representations to all concerned and have persuasively made their case.

It is sad that the amazing disadvantages in education faced by many disabled people have not been recognised. Anyone who has looked into the additional costs and disadvantages experienced by disabled people knows that considerable financial prejudice is suffered by anyone who is deaf, blind or physically or mentally disabled.

10.15 pm

I hope that the Secretary of State will answer hon. Members' questions, but I have a further question. Two issues arise from Government amendment (a) and Lords amendment No. 9 which I hope the Secretary of State will address. First, what are the implications of Government amendment (a) for people who become disabled later in life? Secondly, what does he intend by the phrase Shall make such separate provision as he considers appropriate? Separate provision may mean that mobility or attendance allowance is excluded from a disabled person's income for the purpose of calculating the method or time of repayment. If that is so, separate provision should be automatic, because attendance and mobility allowance should not be included. They compensate for other needs and should be discounted, as they are for tax purposes.

I hope that that is not the meaning of Government amendment (a), because if it is it means that no concession is being made. I hope that it means that substantial other improvements will be made in the financial terms for disabled people. Unless the Secretary of State sets out the details, we shall be sceptical. I hope that he will give detailed answers and thereby allay the continuing concerns of those for whom this is probably the most important debate on the Bill

Mr. MacGregor

I shall be brief, because I know that the House wishes to move to the other debates, but in so doing I shall endeavour to answer all the questions that have been asked.

The Government accept the principle of Lords amendment No. 9, which was made on Third Reading in the other place. Government amendment (a) is essentially a tidying amendment.

Lords amendment No. 9 is intended to enshrine in primary legislaton the requirement that regulations shall set out conditions for disabled people repaying loans, which are separate from the conditions set out for the generality of borrowers. There are, however, difficulties with the drafting of Lords amendment No. 9, which Government amendment (a) tidies. First, it clearly imposes a duty on the Secretary of State. That was no doubt intended by the other place, but the wording did not quite achieve that. The amendment needs tidying in other respects to remove the unnecessary reference to students who will not be repaying loans and to make it clear that the regulations should contain this separate provision. Those points are covered accurately by the Bill and do not affect the substance of what we are trying to do.

I am grateful to my hon. Friends the Members for Exeter (Mr. Hannam) and for Bury, North (Mr. Burt) for pointing out that the Government have already responded. In a parliamentary answer on 19 March, I responded to several points that had been made about disabled people. The right way to proceed was to listen carefully to debates and then to respond. That partly answers the point made by the right hon. Member for Manchester, Wythenshawe (Mr. Morris). He referred to disabled people not working in subsequent years or receiving low incomes, but they will not have to make repayments during those years. Those on low incomes will be fully covered by the arrangements that apply to everyone else.

On 19 March I announced particular provision for disabled people: that there will be separate repayment arrangements for borrowers, which will take the form of a disregard of disability-related benefits for the purpose of assessing a disabled graduate's income for deferment.

Mr. Wigley

Will the right hon. Gentleman give way?

Mr. MacGregor

I shall answer the right hon. Member for Wythenshawe first. He and other hon. Members asked about people who become disabled after graduation. The plan to disregard the disability-related benefit income of disabled repayers will apply at the time of the repaying if at that time the individual is disabled. Therefore, it will apply to those who become disabled subsequently.

Mr. Alfred Morris

How will a young man or woman cope if, after graduation, he or she gradually becomes deaf or blind or suffers from a progressive disease? Will they be expected to repay their loans, although for the reasons I gave in my speech their financial problems increase as their working life proceeds?

Mr. MacGregor

Such people will be expected to repay the loans if they have incomes which, after netting off the disability-related benefits, would take them into the income brackets where loans are repaid. They will have the advantage of netting off the disability-related benefits, which will make the appropriate difference.

Mr. Wigley

Will the Secretary of State tell the House whether he has had any discussions with the Department of Social Security about the definition of disablement and say whether it includes those who are deaf?

Mr. MacGregor

I know that this subject is being discussed in the Department of Social Security and that draft regulations relating to student social security entitlement are being considered by the Social Security Advisory Committee, which is consulting widely. If hon. Members wish to make representations or points about these matters, they should make them to my right hon. Friend.

The amendment does not affect the provision, because it will be included in regulations which will be subject initially to the affirmative resolution procedure. We are putting in the Bill a requirement to consider the needs of the disabled. Given the safeguard of inscription in the Bill, there is no need for the lesser safeguard contained in Opposition amendment (c), whereby such regulations would continue to be subject to the affirmative resolution procedure. The provision in the Opposition's amendment (b) for deaf students would be misplaced in regulations applying to the timing and manner of repayment. Entitlement to benefit will have no bearing on the arrangements for top-up loans.

The key points are these. Deaf students will have particularly extensive resources available to them, especially in view of our decision to enhance significantly the disabled students allowance, payable with the mandatory grant. That is my immediate rebuttal to the point made by the right hon. Member for Wythenshawe. That allowance will go to deaf students. It has been increased by 30 per cent., as I announced on 19 March, and I hope that the House feels that that is a generous response to the previous requests and shows that we have taken note of points made during debate. As my hon. Friend the Member for Bury, North said, not only is that an increase up to £1,000 for everyone, but in addition we have introduced allowances up to £3,000 for specialist equipment during a course and up to £4,000 for non-medical helpers. I hope that the House feels that these are important additions.

I assure the hon. Member for Moray (Mrs. Ewing) that the administration of the disabled students allowance, including the additional allowances, will be as now. They will be administered by the local education authority in England and by the Scottish Education Department in Scotland. There will be no cash limit. The disabled retention of benefits will be based on the disability premium criteria, subject to parliamentary scrutiny of the DSS regulations. Those regulations will come before Parliament in due course, which will enable further discussion to take place.

Taken together, these are significant advances to help the disabled, including deaf students. They will enable deaf students to avoid building up additional debts as a result of disability, and I hope that the House will welcome them. I ask the House to accept the Government amendment in preference to that from another place and to reject the two Opposition amendments.

Lords amendment disagreed to.

Amendment (a) in lieu of Lords amendment agreed to.

Mr. Speaker

I rule, as I ruled previously in respect of Lords amendment No. 8, that Lords amendment No 10 imposes a charge upon the public revenue not authorised by resolution of the House; therefore, under paragraph 3 of Standing Order No. 76, it is deemed to be disagreed to.

Lords amendments Nos. 11 to 15 agreed to.

Lords amendment: No. 16, in page 4, line 51, at end insert— (8) No document sent in connection with loans under the arrangements by any such person or body as is mentioned in sub-paragraph (1) above shall be regarded as sent with a view to financial gain within the meaning of section 50 of the Consumer Credit Act 1974 (circulars to minors).

Mr. Jackson

I beg to move, That this House doth agree with the Lords in the said amendment.

This is a technical amendment for the avoidance of doubt. It allows the Student Loans Company to make information about the scheme widely available, including schools where pupils are thinking about undertaking higher education and higher education institutions where, of course, some students are minors. The hon. Member for Southwark and Bermondsey (Mr. Hughes) made this matter of conveying information to everyone a top priority in his speeches in Committee. The amendment also enables the company to send loan agreement forms to students who are under 18 and who have applied for a loan.

The Government always intended that students under 18 should be eligible for loans. We also intended that the scheme should satisfy the requirements of the Consumer Credit Act 1974. Section 50 of that Act prohibits the sending of documents to minors with a view to financial gain, inviting them to borrow money or to apply for information or to get advice on borrowing money. That section is untested. The words are lucid, but the application is unclear. The crucial words in the amendment are with a view to financial gain".

The common-sense view, which I know hon. Members and the other place will take, is that the Student Loans Company Ltd. could not be construed as operating with a view to financial gain from loans. However, we have been advised that the courts might conclude that section 50 technically prevented the company from disseminating information about the scheme and from sending loan agreement documents to applicants. Of course it would have been quite wrong to allow the scheme to proceed in conditions of such uncertainty, and it is right to put it beyond doubt that, in sending information or invitations—

Mr. Andrew Smith

The Minister is talking about sending out information. Has the law been broken by sending schools student loan information leaflets, thereby disseminating the information to people who are under 18?

Mr. Jackson

I do not think that that could possibly be the case. We are talking about information on legislation that has not yet been enacted. The information was quite properly sent out under the rules that govern the provision of information following Second Reading. [Interruption.] The hon. Member for Southwark and Bermondsey was rightly eloquent about that matter. I can remember Opposition Members arguing in Committee that such information should be provided, and we have provided it.

It would clearly be wrong to allow the scheme to proceed with such uncertainty and it is right to put it beyond doubt that, in sending information or invitations, the company is not acting with a view to financial gain. That is why I commend Lords amendment No. 16 to the House.

Mr. Andrew Smith

The amendment is part of the shambles that results from the fact that the Government have not given proper thought to the Bill. We have come to a new matter for discussion, and the Minister introduced an amendment on that important matter 13 minutes before the guillotine motion expires. That is an indictment of the Government and shows the incompetent way in which they have handled the Bill from beginning to end.

While the Government amendment from the other place attempts to get round the problems posed by the operation of the Consumer Credit Act, it does not really resolve the issue. It raises as many questions as it answers and, in the limited time available I shall list some of them.

Are the information leaflets being sent out by the Government, and distributed through the schools, breaking the existing law? I have just put that question to the Under-Secretary, who did not answer it. The Government need to reconsider that matter. If someone signs up for the loan before they are 18, are they obliged to pay it back afterwards? I do not know, and the Government need to tell us.

What of the position in Scotland, where many students commence their higher education before the age of 18? In the Bill, the Government have shown a despicable lack of regard for the Scottish interest in higher education—a disregard which they have shown from the outset, and show on all matters relating to Scotland. Is parental consent required for those under 18 to engage in the loans, and what is the position of students for whom it might not be forthcoming? Are guarantors required for those students taking out loans when under 18, and what provision is the administration of the scheme making for that?

10.30 pm

These are not minor administrative details, but important questions. It says a great deal about the incompetence and shambles which have characterised the Bill that they were discovered only at the last minute in the Lords and we are having to discuss them just nine minutes before the guillotine descends. In the Lords, Lord Peston said that such matters were all part of the danger of starting on the slippery slope of encouraging, virtually obliging, young people to go into debt to see themselves through higher education. It is shameful, and what is wrong here—and wrong with the Bill as a whole—is that it turns education into a matter of ability to pay and borrow. It gets young people into debt, when education should be available to them as of right.

Will the Minister give a straight answer to the questions that I have put this evening? As it stands, the amendment is one more sign of the shambolic nature of a Bill that has been characterised by incompetence throughout.

Mr. Nigel Griffiths (Edinburgh, South)

As usual, my hon. Friend the Member for Oxford, East (Mr. Smith) makes the telling points. He raised the question of Scotland, in which my hon. Friend the Member for Glasgow, Central (Mr. Watson) and I have an interest. In Scotland, a higher proportion of students go to university at 17—a number go to university or college at 16. The amendment appears to encourage them to circumvent, if it needs to be circumvented, the Consumer Credit Act 1974, to ensure that credit can be offered to people under the age of 18, and the Government can induce such people to take out credit.

The Minister said that he was moving the amendment for the avoidance of doubt. He certainly was not moving it for the avoidance of debt, because debt is what the amendment is all about. It is clear that the country is already awash with credit, yet the Government wish to unload even more on people and, in so doing, unload their responsibility to fund students and their education.

Consumer credit has doubled in the past year, and more than £3 billion-worth is now given. The Minister wants to add to that credit among the crucial category of young people under the age of 18. Two thirds of the 21 million households in this country have a total of more than 40 million transaction commitments to credit companies and other credit organisations. In moving the amendment, the Minister seeks to add to their burden.

One million people already have difficulty keeping up with their consumer credit agreements. Two million people already have problems repaying their debts. Four million already have four or more financial credit agreements, and the Minister is asking students under the age of 18, as well as those older than that to take on one more agreement.

When the Secretary of State for Trade and Industry said that he saw nothing wrong with giving credit cards to children, we did not know that the Government would move so quickly to amend the law to permit that type of practice. I urge the Minister and the Government to think again on this inappropriate clause.

Mr. Jackson

I was asked two questions by the hon. Member for Oxford, East (Mr. Smith). First, the leaflet certainly does not breach the Consumer Credit Act, because it is in no sense an invitation to borrow. Secondly, he asked about the enforceability of loans to minors—

Mr. Straw

rose—

Mr. Jackson

I shall not give way.

The leaflet is a description of a system that would enable—if it is approved by our two Houses—the possibility of borrowing. In no way would that be construed as contrary to the Consumer Credit Act.

As for the enforceability of loans to minors, I have been informed that in Scotland, which is always in a special position, these loans probably are enforceable against minors. In England and Wales, they are probably not enforceable unless the minor ratifies them on reaching his majority, as they are not made for the purchase of necessities. When appropriate, minors who have received loans will be asked to ratify them on reaching their majority. If they refuse to do so, no action will be taken against them, but they will not be entitled to receive further loans under the scheme.

This strikes an appropriate balance between the interests of the students and those of the taxpayer. Meanwhile, this is merely a technical amendment, for the avoidance of doubt. It embodies the common-sense view that the Student Loans Company Ltd. will not act with a view to financial gain. Section 50 of the Act is clearly difficult to interpret. The courts have not yet had occasion to examine it, and we believe that it would be wrong to leave minors or the company in a position of uncertainty. It seems sensible to the Government, therefore, and to the noble Lords in another place, to clarify on the face of the Bill what most people would in any case have thought: that the company will not operate with a view to financial gain from loans. I hope the House will join me in supporting the Lords amendment.

Mr. Simon Hughes

As we are driven towards the fall of the guillotine, I merely point out that the debate has revealed how inappropriate it is to start trying to mix the worlds of education and of credit. The Minister's last answer showed that it is impossible to reconcile the two interests. We should never have had to exclude students from the provisions of consumer legislation. As an epilogue to the Bill, the Government are introducing the marketplace to education, where it never belonged.

Mr. Straw

It was apparent from the remarks of the Under-Secretary that the Government intend, and have already carried out the intention, to send circulars to minors inducing them to borrow money. The House also heard how the Under-Secretary could offer no proper answer to the detailed questions that my hon. Friend the Member for Oxford, East (Mr. Smith) asked him.

In the closing seconds of this guillotined debate, I should like to place it on record that, because of the guillotine forced on the House by the Secretary of State and his hon. Friends, the House has been denied the chance properly to debate major issues of principle [HON. MEMBERS: "Where are the Opposition?"] They are not here because they cannot debate the issues; if they could, they would be.

This procedure represents an abuse of Parliament by the Government.

Question put and agreed to.

It being six hours after the commencement of proceedings on the motion, MR. SPEAKER proceeded, pursuant to the Order this day, to put the Question already proposed from the Chair.

Question agreed to.

Amendment made: No. 17, in page 4, line 51, at end insert: Restriction on disclosure of information 3A.—(1) No person or body having by virtue of paragraph 3 above the function of making and recovering loans shall provide or make available to anyone else (whether for consideration or not) any information held for the purpose of discharging those functions if the information is to be used for soliciting custom for goods or services. (2) As respects information constituting personal data for the purposes of the Data Protection Act 1984 sub-paragraph (1) above is without prejudice to the requirements of that Act but applies irrespective of any consent given for the purposes of that Act by the person to whom the information relates." —[Mr. MacGregor.]

Ordered, That a Committee be appointed to draw up reasons to be assigned to the Lords for disagreeing to their amendments Nos. 5, 8 and 10.—[Mr. MacGregor.]

Ordered, That Mr. Sydney Chapman, Mr. Robert Jackson, Mr. Secretary MacGregor, Mr. Andrew Smith and Mr. Jack Straw be members of the Committee.—[Mr. MacGregor.]

Ordered, That three be the Quorum of the Committee.—[Mr. MacGregor.]

Ordered, That the Committee do withdraw immediately.—[Mr. MacGregor.]

Mr. Simon Hughes

On a point of order, Mr. Speaker. One of the amendments which was passed in the other place, and with which we have disagreed, was moved by my noble Friend Earl Russell. Is it not inappropriate that no colleague of his can take part in the Committee proceedings that you have now put in motion? Is it not an exclusion of an opportunity for hon. Members in this place, of my party—[HON. MEMBERS: "Where are they?"] —and of others, who have been here all evening, to participate in its proceedings? I speak for the nationalists as well as for the Ulster parties. We are allowed to take part in debates in both Houses, but we are not allowed to participate in a procedure that results in us telling the other place that we disagree.

Mr. Speaker

The hon. Gentleman is late in raising his point of order. The motion to which it relates has already been agreed to, and the Committee should withdraw immediately.

Mr. Harry Cohen (Leyton)

On a point of order, Mr. Speaker. When you moved the remaining amendment at the end of our consideration of the Bill, you did not refer to my amendment (a) to Lords amendment No. 17, which related to the privacy rights of students, over which the Bill will ride roughshod. It is an important matter—

Mr. Speaker

Order. The hon. Gentleman cannot advance that argument. He was caught, sadly, by the guillotine. It was not possible for him to move his amendment to the Lords amendment.