HC Deb 12 November 1991 vol 198 cc884-5
1. Mr. Andrew F. Bennett

To ask the Secretary of State for Education and Science if he has any plans to change the student loans scheme.

The Secretary of State for Education and Science (Mr. Kenneth Clarke)

No, Sir.

Mr. Bennett

Does the Minister agree that the loans scheme has turned out to be an administrative nightmare and that it has caused a great deal of bureaucracy and hardship to students, especially since they have been removed from the safety net of social security? Is not it hard that all those measures have been placed on students at a time when they find it particularly difficult to get vacation jobs or part-time jobs in term time and when those who graduate find it increasingly difficult to get jobs to pay off the overdrafts that they have had to incur as students?

Mr. Clarke

I do not agree with any of those premises. First, the scheme has been extremely well run and the loans company has met its target of getting the loans to those who have applied within 21 days in almost all cases. The majority of students have not felt obliged to take out loans as they have not thought it necessary. Those who have done so have enjoyed the benefit. The loan plus the grant is 30 per cent. higher than the grant alone two years ago. There is no evidence of significant student hardship, despite a somewhat half-baked campaign by the National Union of Students to try to suggest that there is. We have provided an access fund to the institutions to enable them to deal with the few cases of hardship that genuinely occur.

Mr. Pawsey

If the situation is as the hon. Member for Denton and Reddish (Mr. Bennett) describes it, why has the number of applicants to advanced education increased and why does the number of admissions to universities and polytechnics show a substantial increase? Will my right hon. and learned Friend confirm that student support in the United Kingdom continues to be the most generous in the western world?

Mr. Clarke

I am unable to answer my hon. Friend's first question; it puzzles me, too. We had been told that the loans system would deter people who might otherwise have gone into higher education because of the so-called financial hardship that they would face. In fact, since it has been introduced, the rate at which student numbers have increased has been unprecedented and we expect it to increase by 10 per cent. again this year. All the evidence refutes the nonsense that we have heard about the impact of the student loans scheme.

My hon. Friend is right that we have the most generous system in the developed world for supporting students. I make no apology for that. It is Government policy to continue to extend opportunity for students in that way.

Mr. Straw

Why is the Secretary of State so contemptuous of the evidence about student hardship when it comes from sources such as the citizens advice bureaux and from scores of cases sent to him by hon. Members on both sides of the House? Does the Secretary of State recognise that the access funds are in no sense a substitute for student eligibility for social security and for vacation hardship allowance and that mature students in particular have been plunged into severe hardship by the Government's policies? In the light of that, will he reconsider the abolition of vacation hardship allowance, especially as it was abolished in clear breach of undertakings given in the House that it would remain as a safety net following the abolition of social security provision?

Mr. Clarke

I have looked at the evidence of so-called student hardship and I do not accept that the "scores" of cases stand up to examination. There have always been some students in serious difficulties. Mature students and those who do not receive the parental contribution towards their grant have always been a problem. It is somewhat eased for some by the student loans system. It can also be addressed by using the access funds provided by the Government. The average student is much better off under our arrangements of a combined grant and loan scheme than previously. The few that are not—those with high housing benefit—can be helped through the access funds. The vacation hardship allowance was almost unheard of and was not being demanded. When we abolished it there was scarcely any take-up.