Student Loans (Hansard, 27 February 1990)

§ 7. Mr. Kennedy
To ask the Secretary of State for Education and Science if he will make a statement on progress towards introducing top-up student loans.

§ The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson)
Having had an easy passage in this House, the Education (Student Loans) Bill is having its Second Reading in another place today. Rapid progress is being made on preparatory work. Subject to Parliament's approval, we are well on course for providing extra resources for students this autumn.

§ Mr. Kennedy
I congratulate the Minister on finding a fantasist to draft that reply. Given the utterly disastrous meeting on 19 February of the leaders of the main education institutions, who made clear their implacable hostility to the proposals, and the absurd fact that the Government Chief Whip in another place is today imposing a three-line whip and saying that this is an issue of confidence, will the Minister at least display even-handedness? He accepted, with some magnanimity, the decision of the high streets banks to withdraw. If the independent education institutions hold their line not to co-operate, will he adopt an even-handed attitude and not force them when he was unable to force the banks?

§ Mr. Jackson
The Government are considering whether they need the co-operation of the higher education institutions in providing this money for their students. When we have made up our minds, we shall decide whether to table an amendment to the Bill, as they have invited us to do.

§ Mr. Brazier
Does my hon. Friend agree that such loans are a feature of the education systems in America, Japan and many European countries, including several Socialist countries? Does he further agree that those who have the advantage of a university education should make some repayment to the state?

§ Mr. Jackson
A striking feature of the debate on student loans was that all the major contributors, including the vice-chancellors, to whom the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) referred, favour the principle of a graduate contribution. That is real progress. The only dissenting voice is the Opposition, but it appears that even they have dissenters on that point in their ranks in the other place.

§ Mr. Win Griffiths
Does the Minister have any idea how the student loans scheme will work? If he has, why did he not tell us during debates on the Bill? If he does not, why, after more than two years, has this not been solved?

§ Mr. Jackson
We have a very good idea how the student loans scheme will work. It will work very well.

§ Mr. Harry Greenway
Will my hon. Friend spare a thought for my student constituents, many of whose grants have not been paid by Labour-controlled Ealing council for last term, let alone this term? That council, like the Labour party, opposes student loans. Students are 128 forced to take out loans at high interest rates to pay for their board and lodging. Is not it time that the hypocrisy of the Labour party and Ealing council ended and that they looked after students properly?

§ Mr. Jackson
I commiserate with my hon. Friend's student constituents. I have been in correspondence with Ealing council about the matter. I agree with my hon. Friend that the availability of student loans will provide a resource for students which will make them more independent of the local authority grant system and of their parents.

§ Mr. Andrew Smith
Are not the procedures that the Secretary of State announced yesterday further confirmation of the vast and sinister big brother bureauracy that the Government are imposing to run the scheme? Specifically, can the Minister assure the House today that the Student Loans Company will not have access to individuals' tax records and that he will reimburse institutions for the additional administrative costs incurred with the loans scheme and with the access funds?

§ Mr. Jackson
The hon. Gentleman, uncharacteristically, goes over the top. There is nothing unusual about the arrangements that we are making for student loans. The loan is simply a form of customer credit and is common in other cases. There is no question of access to tax records. Indeed, that is one of our arguments against the proposal for a graduate tax which is favoured by the vice-chancellors. The hon. Gentleman must reflect on the fact that many people will have borrowed substantial sums from the taxpayer to finance their higher education and will have derived benefit from that. They will be under an obligation to repay that money to the taxpayer and it is perfectly reasonable that best commercial practice should be followed by the Student Loans Company in pursuing defaulters.