HC Deb 17 January 1996 vol 269 cc820-35
Mr. Bryan Davies (Oldham, Central and Royton)

I beg to move amendment No. 1, in page 1, line 13, at end add— '(1B) The Secretary of State shall, as soon as any arrangements under subsection (1A) above have been concluded, lay before each House of Parliament a statement containing the names of any person with whom those arrangements have been concluded and the terms of the arrangements, including the amount of subsidy to be paid to each such person under that subsection.'. The amendment seeks to establish the absolutely bare minimum of parliamentary scrutiny of the Government's measures. As my hon. Friends have repeatedly stressed, the Bill is skeletal, an enabling measure. It contains barely any detail of the new private sector student loans that will become operative. Parliament is being asked to give blanket authority to the Government to negotiate with the private sector as they see fit. The Minister wants authority for public expenditure subsidies of whatever order he considers necessary to persuade the banks and building societies to participate in the scheme.

We know from experience how liberal the Government can be with public money when it is used as a sweetener to ensure that their privatisation measures do not bite the dust. For example, the additional cost to the taxpayer of a privatised railway system will be £850 million a year, which is more than £2 million a day. The Government cannot even be trusted with taxpayers' money in connection with overseas projects and Governments. We all recall Pergau dam and it has not gone unnoticed that the chief whistleblower in that affair, the former permanent secretary to the Department for Education and Employment, is no longer in the Government's employ.

In deliberations in Standing Committee, the Minister repeatedly rejected arguments that would have allowed the House to examine the arrangements that he finally negotiates. He did that on the ground that Parliament cannot be involved in the negotiation of commercial contracts. The amendment simply asks the Minister to report in a full statement to the House the outcome of his negotiations—the details of the contracts when they have been concluded. That is often the practice in the House when significant commercial contracts involving public money are awarded. Sometimes even the Prime Minister chooses to give the House advance notice of a decision, as he helpfully did yesterday over Land Rover ambulances.

As the Bill stands, it will offer no opportunity for Parliament to question the Minister on his arrangements. That surely undermines the rights of the House. How can the Executive object to making a proper statement to the House on a new set of contracts of this kind? Should we simply accept that we have to read a press release on the outcome of the Minister's negotiations, or a written answer, or should we have to go to the Library to look at a document that the Minister has kindly put there?

Let us not forget the magnitude of the issue that we are considering. Outstanding student loans, that is, principal and interest, will total some £5 billion by the end of the decade. We are not debating a small matter: these are substantial commitments of resources. Public subsidies to the private sector will be very significant. As the Minister cannot tell us the amount of those subsidies, he should surely accept the responsibility of presenting a full statement to the House when he is in a position to do that.

The House has a right to expect answers to a number of key questions. What level of subsidy will be paid to private sector lenders? How much will private sector lenders obtain for administration costs, for interest rate subsidy and for default on loans? All those factors are significant in the current public sector scheme under the Student Loans Company. This is the crux of the matter. Huge subsidies will be needed if the banks and building societies are ever likely to get involved. Anyone who doubts that should consider the pronounced reluctance of financial institutions at this time.

The Minister wants to walk off with a blank cheque and does not want to account for how he spends it. That is scarcely standard commercial practice, unless one works for a financial institution such as Barings bank. Of course the House is aware of the close relationship between the Conservative party and Barings bank, which gave the party more than £600,000 between 1979 and 1993. Nick Leeson caused the ruin of one of the most reputable institutions in the City at the same time as he caused great damage to the cash flow of one of the least reputable institutions in politics—the Conservative party.

Unlike secret Conservative party accounts, the subsidies to the banks and building societies should be open to public and parliamentary scrutiny as soon as possible. For instance, we require an answer to the question whether the subsidies will include the start-up costs of new information technology systems for the banks and building societies. Considerable importance has been attached to that issue. Scratching for an explanation in Committee as to why the timetable for the Bill was proving so totally unrealistic, the Minister stated that one of the crucial factors was the problem of the need for new technology systems to handle student accounts.

Why on earth did it take the Minister until after the Bill had been presented to discover those matters? Why did he not carry out some serious investigations and make inquiries before it was presented? It is worth remembering that the Student Loans Company, for which the Minister bears some responsibility, has invested some £20 million in computer operating systems since 1990.

When asked in Committee by my hon. Friend the Member for Wallsend (Mr. Byers) whether there would be a disclosure of the amount of public money that went towards the start-up costs in the private sector, the Minister said that he did not think that he could be specific at that stage, for the obvious reason that the detailed nature of the contractual arrangements had not yet been finalised. The Minister insists that we are obliged to accept that argument for the time being. But surely that question must be answered for Parliament to be satisfied with the Bill's provisions. The amendment gives the Minister the opportunity to assure the House that he will do that.

What about the public sector borrowing requirement effects of the scheme? When do Ministers expect the combined public and private sector loans scheme to secure public expenditure savings? When can we expect revised forecasts for the performance of the student loans scheme in its dual provision? What will be the exact terms and conditions attaching to student loans? How will repayment terms vary under the new scheme, and what repayment terms will be offered to students by different private sector providers? The Minister was exceedingly coy in Committee about even the basic principles upon which he was working when we questioned him on those matters.

Will the chosen private sector lenders offer sufficient geographical coverage in the United Kingdom? What guarantees do we have to ensure that all students in different localities throughout the country will be served by the new arrangements? Hon. Members will surely regard all that information as vital, but none of it is in front of the House of Commons in definitive form. Unless the Minister can tell us otherwise, a revised tender document has not even been made available.

9 pm

Nor, significantly, do we know, as my hon. Friend the Member for Wallsend said, how the Minister is making up the £100 million shortfall caused by the delayed introduction of his scheme. That figure will be of the greatest interest to all people in higher education who are wrestling with the savage implications of the 7 per cent. cut in recurrent and capital funding for next year. Is the higher education sector expected to bridge that shortfall with a further squeeze on its unit of resource? If so, that is to pile Pelion on Ossa. The Minister might have to bear some serious consequences should he attempt to go down that road.

Parliament cannot have any confidence in the new scheme when it is to be delayed for one year. The measure is short-sighted and ill considered. Surely, the Government have a duty to put flesh on the bare bones that they have offered to the House. That is why the amendment seeks a full statement from the Minister to the House at the appropriate time at the conclusion of his negotiations.

Mr. Forth

The hon. Member for Oldham, Central and Royton (Mr. Davies) makes a passionate request, but yet again, he is going not a little over the top. I have told him and the Committee—and I repeat to the House—that it is of course our intention that, when the Government finalise contractual arrangements with private lenders to give effect to the Bill's aims, I shall notify the House of those lenders. That is not a problem.

I have also said that details of public expenditure and private sector loans will be set out annually in the appropriation accounts and in the Department's annual report, and that all the normal arrangements of the National Audit Office and the other panoply of checks will apply in this case. That much is clear. When, however, the hon. Gentleman expects, as he does in the amendment, that the terms of the arrangements and details of contracts concluded—in this case, between the Government and private lenders—should be in the public domain, I cannot agree with him.

In Committee, I asked the hon. Gentleman whether he was giving an undertaking that any future Labour Government, in their dealings with the private sector across government, would publish in every case all the contracts in detail and all the contractual arrangements made between that Government and a private sector provider of goods or services. He did not give me an answer then and I suspect that he is not going to give me an answer now. If the amendment is a new enunciation of the doctrine that would form the basis of the relationship between thrusting, entrepreneurial new Labour and the private sector, which has been wooed by the hon. Gentleman's colleagues, I would be surprised, although many of my colleagues would not be.

This issue goes to the heart of the relationship between the Government of the day and the private sector. The relationship between this Government and the private sector is well established and well understood, but it is in the new clauses and amendments to this Bill of all Bills that we get a glimpse of the reality of Labour Members' attitude to the private sector, and of what their approach to that sector would be, were they ever to be in government.

I do not agree with the amendment because it takes us into territory that Conservative Members find unacceptable. It would undermine and prejudice the operation of the arrangements between the Government and the private sector. I urge to House to reject the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 247, Noes 278.

Division No. 27] [9.04 pm
Abbott Ms Diane Davies, Ron (Caerphilly)
Adams, Mrs Irene Davis, Terry (B'ham, H'dge H'l)
Ainger, Nick Denham, John
Ainsworth, Robert (Cov'try NE) Dewar, Donald
Alton, David Dixon, Don
Anderson, Donald (Swansea E) Donohoe, Brian H
Anderson, Ms Janet (Ros'dale) Dowd, Jim
Armstrong, Hilary Dunwoody, Mrs Gwyneth
Ashdown, Rt Hon Paddy Eagle, Ms Angela
Ashton, Joe Eastham, Ken
Austin-Walker, John Etherington, Bill
Banks, Tony (Newham NW) Evans, John (St Helens N)
Barron, Kevin Ewing, Mrs Margaret
Battle, John Faulds, Andrew
Bayley, Hugh Field, Frank (Birkenhead)
Beckett, Rt Hon Margaret Flynn, Paul
Beggs, Roy Foster, Rt Hon Derek
Beith, Rt Hon A J Foster, Don (Bath)
Bell, Stuart Fyfe, Maria
Bennett, Andrew F Galbraith, Sam
Benton, Joe Galloway, George
Bermingham, Gerald Gapes, Mike
Berry, Roger Garrett, John
Betts, Clive George, Bruce
Blunkett, David Gerrard, Neil
Boateng, Paul Gilbert, Rt Hon Dr John
Bradley, Keith Godman, Dr Norman A
Bray, Dr Jeremy Godsiff, Roger
Brown, N (N'c'tle upon Tyne E) Golding, Mrs Llin
Bruce, Malcolm (Gordon) Graham, Thomas
Byers, Stephen Grant, Bernie (Tottenham)
Callaghan, Jim Griffiths, Nigel (Edinburgh S)
Campbell, Mrs Anne (C'bridge) Griffiths, Win (Bridgend)
Campbell, Menzies (Fife NE) Grocott, Bruce
Campbell, Ronnie (Blyth V) Hain, Peter
Campbell-Savours, D N Hall, Mike
Canavan, Dennis Hanson, David
Cann, Jamie Hardy, Peter
Carlile, Alexander (Montgomery) Harman, Ms Harriet
Chidgey, David Harvey, Nick
Chisholm, Malcolm Henderson, Doug
Church, Judith Heppell, John
Clapham, Michael Hill, Keith (Streatham)
Clark, Dr David (South Shields) Hinchliffe, David
Clarke, Eric (Midlothian) Hodge, Margaret
Clarke, Tom (Monklands W) Hoey, Kate
Clelland, David Hogg, Norman (Cumbemauld)
Clwyd, Mrs Ann Home Robertson, John
Coffey, Ann Hood, Jimmy
Cohen, Harry Hoon, Geoffrey
Cook, Frank (Stockton N) Howarth, Alan (Strat'rd-on-A)
Cook, Robin (Livingston) Howarth, George (Knowsley North)
Corbett, Robin Howells, Dr Kim (Pontypridd)
Corbyn, Jeremy Hoyle, Doug
Corston, Jean Hughes, Robert (Aberdeen N)
Cunliffe, Lawrence Hutton, John
Cunningham, Jim (Covy SE) Illsley, Eric
Dafis, Cynog Ingram, Adam
Darling, Alistair Jackson, Glenda (H'stead)
Davidson, Ian Jackson, Helen (Shef'ld, H)
Davies, Bryan (Oldham C'tral) Jamieson, David
Davies, Rt Hon Denzil (Llanelli) Jones, Barry (Alyn and D'side)
Jones, leuan Wyn (Ynys Môn) Prescott, Rt Hon John
Jones, Jon Owen (Cardiff C) Primarolo, Dawn
Jones, Lynne (B'ham S O) Purchase, Ken
Jones, Martyn (Clwyd, SW) Quin, Ms Joyce
Jowell, Tessa Randall, Stuart
Kaufman, Rt Hon Gerald Raynsford, Nick
Keen, Alan Reid, Dr John
Kennedy, Jane (L'pool Br'dg'n) Rendel, David
Khabra, Piara S Robertson, George (Hamilton)
Kilfoyle, Peter Roche, Mrs Barbara
Kirkwood, Archy Rooker, Jeff
Lestor, Joan (Eccles) Ross, Ernie (Dundee W)
Liddell, Mrs Helen Rowlands, Ted
Litherland, Robert Ruddock, Joan
Lloyd, Tony (Stretford) Salmond, Alex
Llwyd, Elfyn Sedgemore, Brian
Lynne, Ms Liz Sheerman, Barry
McAllion, John Sheldon, Rt Hon Robert
McCartney, Ian Shore, Rt Hon Peter
McCartney, Robert Short, Clare
McKelvey, William Simpson, Alan
Mackinlay, Andrew Skinner, Dennis
McLeish, Henry Smith, Andrew (Oxford E)
Madennan, Robert Smith, Llew (Blaenau Gwent)
McMaster, Gordon Smyth, The Reverend Martin
MacShane, Denis Spearing, Nigel
Madden, Max Speller, John
Maddock, Diana Squire, Rachel (Dunfermline W)
Mahon, Alice Steel, Rt Hon Sir David
Marek, Dr John Steinberg, Gerry
Marshall, David (Shettleston) Stevenson, George
Marshall, Jim (Leicester, S) Strang, Dr. Gavin
Martlew, Eric Straw, Jack
Maxton, John Sutcliffe, Gerry
Meale, Alan Taylor, Mrs Ann (Dewsbury)
Michael, Alun Taylor, Matthew (Truro)
Michie, Bill (Sheffield Heeley) Timms, Stephen
Michie, Mrs Ray (Argyll & Bute) Tipping, Paddy
Milburn, Alan Touhig, Don
Miller, Andrew Trimble, David
Mitchell, Austin (Gt Grimsby) Turner, Dennis
Molyneaux, Rt Hon Sir James Tyler, Paul
Moonie, Dr Lewis Vaz, Keith
Morgan, Rhodri Walker, Rt Hon Sir Harold
Morley, Elliot Wallace, James
Morris, Rt Hon Alfred (Wy'nshawe) Walley, Joan
Morris, Estelle (B'ham Yardley) Wardell, Gareth (Gower)
Morris, Rt Hon John (Aberavon) Wareing, Robert N
Mudie, George Watson, Mike
Mullin, Chris Welsh, Andrew
Murphy, Paul Wicks, Malcolm
Nicholson, Emma (Devon West) Williams, RI Hon Alan (SW'n W)
Oakes, Rt Hon Gordon Williams, Alan W (Carmarthen)
O'Brien, Mike (N W'kshire) Winnick, David
O'Hara, Edward Wise, Audrey
Olner, Bill Worthington, Tony
O'Neill, Martin Wray, Jimmy
Pearson, Ian Wright, Dr Tony
Pickthall, Colin Young, David (Bolton SE)
Pike, Peter L
Pope, Greg Tellers for the Ayes:
Powell, Ray (Ogmore) Mr. John Cummings and
Prentice, Gordon (Pendle) Mrs. Bridget Prentice.
Ainsworth, Peter (East Surrey) Atkinson, Peter (Hexham)
Aitken, Rt Hon Jonathan Baker, Nicholas (North Dorset)
Alexander, Richard Baldry, Tony
Alison, Rt Hon Michael (Selby) Banks, Robert (Harrogate)
Allason, Rupert (Torbay) Bates, Michael
Arbuthnot, James Batiste, Spencer
Arnold, Jacques (Gravesham) Bellingham, Henry
Arnold, Sir Thomas (Hazel Grv) Bendall, Vivian
Ashby, David Beresford, Sir Paul
Atkins, Rt Hon Robert Biffen, Rt Hon John
Atkinson, David (Bour'mouth E) Body, Sir Richard
Bonsor, Sir Nicholas Gillen, Cheryl
Boswell, Tim Goodlad, Rt Hon Alastair
Bottomley, Peter (Eltham) Goodson-Wickes, Dr Charles
Bowden, Sir Andrew Gorman, Mrs Teresa
Bowis, John Gorst, Sir John
Boyson, Rt Hon Sir Rhodes Grant, Sir A (SW Cambs)
Brandreth, Gyles Greenway, Harry (Ealing N)
Brazier, Julian Greenway, John (Ryedale)
Bright, Sir Graham Griffiths, Peter (Portsmouth, N)
Brooke, Rt Hon Peter Grylls, Sir Michael
Brown, M (Brigg & Cl'thorpes) Gummer, Rt Hon John Selwyn
Browning, Mrs Angela Hague, Rt Hon William
Bruce, Ian (Dorset) Hamilton, Rt Hon Sir Archibald
Burns, Simon Hamilton, Neil (Tatton)
Burt, Alistair Hampson, Dr Keith
Butterfill, John Hanley, Rt Hon Jeremy
Carlisle, John (Luton North) Hannam, Sir John
Carlisle, Sir Kenneth (Lincoln) Hargreaves, Andrew
Carrington, Matthew Harris, David
Carttiss, Michael Haselhurst, Sir Alan
Cash, William Hawkins, Nick
Channon, Rt Hon Paul Hawksley, Warren
Chapman, Sir Sydney Hayes, Jerry
Churchill, Mr Heald, Oliver
Clappison, James Heath, Rt Hon Sir Edward
Clark, Dr Michael (Rochford) Heathcoat-Amory, Rt Hon David
Clifton-Brown, Geoffrey Hendry, Charles
Coe, Sebastian Heseltine, Rt Hon Michael
Congdon, David Hicks, Robert
Conway, Derek Higgins, Rt Hon Sir Terence
Coombs, Anthony (Wyre For'st) Hill, James (Southampton Test)
Coombs, Simon (Swindon) Hogg, Rt Hon Douglas (G'tham)
Cope, Rt Hon Sir John Horam, John
Couchman, James Hordern, Rt Hon Sir Peter
Cran, James Howard, Rt Hon Michael
Currie, Mrs Edwina (S D'by'ire) Howell, Rt Hon David (G'dford)
Curry, David (Skipton & Ripon) Howell, Sir Ralph (N N'folk)
Davies, Quentin (Starnford) Hughes, Robert G (Harrow W)
Davis, David (Boothferry) Hunt, Rt Hon David (Wirral W)
Day, Stephen Hunt, Sir John (Ravensbourne)
Deva, Nirj Joseph Hunter, Andrew
Devlin, Tim Jack, Michael
Dicks, Terry Jackson, Robert (Wantage)
Dorrell, Rt Hon Stephen Jenkin, Bernard
Dover, Den Jessel, Toby
Duncan, Alan Johnson Smith, Sir Geoffrey
Duncan-Smith, Iain Jones, Gwilym (Cardiff N)
Dunn, Bob Jones, Robert B. (W H'fordshire)
Durant, Sir Anthony Jopling, Rt Hon Michael
Dykes, Hugh Kellett-Bowman, Dame Elaine
Eggar, Rt Hon Tim Key, Robert
Elletson, Harold Kirkhope, Timothy
Emery, Rt Hon Sir Peter Knapman, Roger
Evans, David (Welwyn Hatfield) Knight, Mrs Angela (Erewash)
Evans, Jonathan (Brecon) Knight, R Hon Greg (Derby N)
Evans, Nigel (Ribble Valley) Knight, Dame Jill (Bir'm E'st'n)
Evans, Roger (Monmouth) Knox, Sir David
Evennett, David Kynoch, George (Kincardine)
Faber, David Lait, Mrs Jacqui
Fabricant, Michael Lamont, Rt Hon Norman
Fenner, Dame Peggy Lawrence, Sir Ivan
Field, Barry (Isle of Wight) Legg, Barry
Fishburn, Dudley Leigh, Edward
Forman, Nigel Lester, Sir James (Broxtowe)
Forsyth, Rt Hon Michael (Stirling) Lidington, David
Forth, Eric Lilley, Rt Hon Peter
Fowler, Rt Hon Sir Norman Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Rt Hon Sir Marcus (Shipley) Lord, Michael
Freeman, Rt Hon Roger Luff, Peter
French, Douglas MacGregor, Rt Hon John
Gale, Roger MacKay, Andrew
Gallie, Phil Maclean, Rt Hon David
Gardiner, Sir George McLoughlin, Patrick
Garel-Jones, Rt Hon Tristan McNair-Wilson, Sir Patrick
Garnier, Edward Madel, Sir David
Gill, Christopher Maitland, Lady Olga
Malone, Gerald Spencer, Sir Derek
Mans, Keith Spicer, Sir James (W Dorset)
Marland, Paul Spicer, Sir Michael (S Worcs)
Marlow, Tony Spink, Dr Robert
Martin, David (Portsmouth S) Spring, Richard
Mates, Michael Sproat, Iain
Mawhinney, Rt Hon Dr Brian Squire, Robin (Hornchurch)
Mayhew, Rt Hon Sir Patrick Stanley, Rt Hon Sir John
Merchant, Piers Steen, Anthony
Mitchell, Andrew (Gedling) Stephen, Michael
Mitchell, Sir David (NW Hants) Stern, Michael
Moate, Sir Roger Stewart, Allan
Monro, Rt Hon Sir Hector Streeter, Gary
Montgomery, Sir Fergus Sumberg, David
Needham, Rt Hon Richard Sweeney, Walter
Neubert, Sir Michael Sykes, John
Newton, Rt Hon Tony Tapsell, Sir Peter
Nicholls, Patrick Taylor, Ian (Esher)
Nicholson, David (Taunton) Taylor, John M (Solihull)
Norris, Steve Taylor, Sir Teddy (Southend, E)
Onslow, Rt Hon Sir Cranley Temple-Morris, Peter
Ottaway, Richard Thomason, Roy
Page, Richard Thompson, Sir Donald (C'er V)
Paice, James Thompson, Patrick (Norwich N)
Patnick, Sir Irvine Thornton, Sir Malcolm
Patten, Rt Hon John Thurnham, Peter
Pattie, Rt Hon Sir Geoffrey Tracey, Richard
Pawsey, James Tredinnick, David
Pickles, Eric Trend, Michael
Porter, Barry (Wirral S) Twinn, Dr Ian
Porter, David (Waveney) Viggers, Peter
Powell, William (Corby) Waldegrave, Rt Hon William
Rathbone, Tim Walden, George
Redwood, Rt Hon John Walker, Bill (N Tayside)
Renton, Rt Hon Tim Waller, Gary
Richards, Rod Ward, John
Riddick, Graham Wardle, Charles (Bexhill)
Roberts, Rt Hon Sir Wyn Waterson, Nigel
Robertson, Raymond (Ab'd'n S) Watts, John
Robinson, Mark (Somerton) Wheeler, Rt Hon Sir John
Roe, Mrs Marion (Broxbourne) Whitney, Ray
Rowe, Andrew (Mid Kent) Whittingdale, John
Rumbold, Rt Hon Dame Angela Widdecombe, Ann
Sackville, Tom Wilkinson, John
Sainsbury, Rt Hon Sir Timothy Willetts, David
Scott, Rt Hon Sir Nicholas Wilshire, David
Shaw, David (Dover) Winterton, Mrs Ann (Congleton)
Shaw, Sir Giles (Pudsey) Wolfson, Mark
Shephard, Rt Hon Gillian Wood, Timothy
Shepherd, Sir Colin (Hereford) Yeo, Tim
Shepherd, Richard (Aldridge)
Sims, Roger Tellers for the Noes:
Skeet, Sir Trevor Dr. Liam Fox and
Smith, Sir Dudley (Warwick) Mr. Bowen Wells.

Question accordingly negatived.

Order for Third Reading read.

Mr. Deputy Speaker

I have to inform the House that Madam Speaker has not selected the reasoned amendment.

9.17 pm
Mr. Forth

I beg to move, That the Bill be now read the Third time.

Our objectives in the Bill are simple and straightforward. We want to extend choice, competition and diversity in the provision of loans to students. Those are our fundamental principles in education, and indeed throughout the public sector. Through competition, student borrowers will get a better service and a better tailored product. Personal lending is best done by the banks and building societies—the experts, after all—and not necessarily by the Government. It is surely preferable that the enormous sums involved are raised and that the risks are largely borne by the private sector.

Any loan scheme has to balance the interests of the taxpayer and of the student. Our scheme offers preferential terms, including deferment and a retail prices index-linked interest rate for students, and a relatively short repayment period benefits the taxpayer. To that extent, our scheme is already income contingent. I am not persuaded that other schemes would offer a better balance.

We will have to wait to see whether Opposition Members want to shift the balance towards the taxpayer or the student, when they eventually decide what they want to do. At least we know that some Opposition Members appear to accept the principle of loans—five years after we debated the previous Education (Student Loans) Bill. I hope that we do not have to wait that long before we hear the Opposition's attitude to some of the more developed aspects of policy.

The Labour party aspires to be the party of business. Indeed, the matter was raised yet again while discussing the final amendment tabled on Report a few minutes ago. Yet given the opportunity to back choice and competition in the private sector, the Labour party has shown how truly empty its aspiration is—certainly in the context of the Bill. All that Labour could come up with was more or less pointless regulation and an inherent distrust of the private sector.

I believe that this modest Bill will move us forward significantly in quality and choice in the provision of loans to students. We have discussed it in detail in Committee and again on Report. The Bill, in its present form, will provide the ideal vehicle for the enhanced provision of loans to students, within the constraints of the existing regime. We should also bear it in mind that the new provision will exist in parallel with continuing provision from the Student Loans Company, which will continue to operate and to offer a choice between private and public sector loans. I hope that the House appreciates the merits of the Bill, however modest it may be. I ask the House to give it a Third Reading.

9.20 pm
Mr. Bryan Davies

I oppose Third Reading of the Bill. We are getting accustomed to the Government misusing the concept of choice in education. The choice that they suggest for school students and their parents frequently turns out to be choice by schools of students. Here we have the supposed extension of choice and opportunity to students. It is, however, clear that the choice will be exercised by banks and private institutions.

The Bill is an enabling Bill, without detail on the way in which the Government intend to act. It is without detail because there was not adequate preparation before it was introduced. The Bill was introduced in a tremendous rush, and that rush was born of one concept only—how to ensure that the Government could write into the budgetary forecast £100 million of savings from privatising an expensive part of the student loan provision. This first piece of legislation of the Government's last full parliamentary Session, the pathfinder of the Government's legislative programme, is sadly off course and is proving an appalling augury of the Government's Bills this Session.

Before the Bill was discussed in Committee, the Minister said that the whole issue was about breakneck speed and the necessity for extreme urgency in implementing the Bill. That urgency was, of course, born of an attempt to deliver £100 million of savings in the public sector in 1996–97. In Committee, the Minister admitted that the game was up for this year and that the Bill's real impact would be postponed until after the next general election, whenever that might be.

Why should Parliament indulge a Government on their last legs who seek to condition the actions of future Governments, against a background of their having manifestly failed to produce details of how the scheme should work and of there being no convincing sign that anyone supports the Bill, apart from Ministers and Conservative Back Benchers? Is there a single interest group concerned with higher education or any group concerned with the welfare of education that has had a good thing to say about the Bill? Why should the House grant power for subsidies to the private sector when critical assurances have not been given on how the Minister intends that the subsidies should be guarded?

In Committee and today, there has been no explanation of how the Minister will seek to give even limited protection to students—the remnants of a fair deal—before the legislation comes into force. What will dictate the allocation of loans to students will, of course, be straight commercial criteria. There will be no right of appeal for students and no guarantee that public money is being allocated on the basis of fair principles. The Minister believes in caveat emptor for students—they will have to look after themselves when dealing with the banks.

Moreover, the Government have learned nothing from the widely catalogued difficulties of the existing student loans scheme through the Student Loans Company. The present scheme is subject to almost universal criticism, yet the Minister has made no concession at all to that. He gave no concession to any concept that loans should be repaid on the basis of income contingency, and he made no attempt to recognise what is needed to support a learning-centred society.

The Government have thrown away an opportunity to consider how to guarantee the numbers of students in higher education adequately, and to guarantee that students are properly resourced on a fair basis to ensure that the country develops the skill levels that we desperately need. Instead, the Minister has produced a Bill that merely builds on the weaknesses of the existing system. The Bill is modelled on a scheme that has been subject to criticism on every side. Instead of using the opportunity to think afresh and to produce a new and good scheme—of which many models have been put before the Minister in recent years—the Minister has produced two bad schemes. The House should reject the Bill.

9.26 pm
Mr. George Walden (Buckingham)

When I was trying to sell the concept of student loans as a junior Minister in the mid-1980s, one of the many objections I heard was that the scheme was the thin end of the wedge. I was careful at the time not to deny that; frankly, I believe that the wedge has a long way to go.

I disagree with nothing in the Bill, but I would add a footnote. The way in which our universities and higher education establishments are developing means that, one of these days, we will have to drive that wedge in further to sustain the undoubted quality of our system. Hon. Members on both sides of the House will have to start thinking and talking about contributions to higher education fees, and not just what we are discussing in the Bill—student loans for maintenance.

That suggestion is recognised by honest Opposition Members, notably the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who has come up with the notion of a graduate tax. I do not think that Conservative Members should dismiss that proposal out of hand on partisan grounds. As a Chamber, as a House of Commons and as a country, we face the problem of how to finance the tripling in the number of students without going down the road of some of our continental partners, who provide a low-grade mass higher education system. We do not want that.

There are some signs of an increasing lack of facilities, and there is news today of an increase in the drop-out rate. One of the great things about our system was that we had a low drop-out rate, and we should read the warning signs and try to be as honest as we can in electoral and partisan terms about this matter. I am not such a fool as not to realise that that suggestion is electoral dynamite, because we are talking about some form or other of contribution from the middle classes towards the maintenance of the high standard of a system which their children preponderantly benefit from. That was not a very good sentence, and I am sorry about that.

I do not want to criticise the Government and, having been in at the beginning of the process, I understand the circumstances and why they are introducing the measure. This is not the end of the process, however. It is a thin wedge, but if we want to maintain the high quality of higher education, the Government—or Labour, if it takes power—will have to force the wedge in deeper. Funds will have to come from outside the Government, and that will involve some form of contribution towards university fees.

9.28 pm
Mr. Don Foster (Bath)

The hon. Member for Buckingham (Mr. Walden) is right to challenge all political parties as he has done. The sadness is that the Bill does not address that challenge, which must be addressed. It is a desperate measure which has been hastily prepared and introduced. The Bill's passage through the House, as the hon. Member for Hyndburn (Mr. Pope) was keen for me to point out to the House, is a further example of the chaos and confusion created by the Government. [HON. MEMBERS: "Hear, hear."] I thought that Labour Members would like that.

Although there may be some merit in sharing loan risk with the private sector, in many respects the Bill fails. It fails to tackle the real problems of student debt and poverty. Despite what the Minister told us in Committee, student debt and poverty have an impact on the quality of students' learning, and are at least in part responsible for the unacceptably large number of students who simply do not complete their courses, creating a real waste of talent.

The Bill fails to provide support where support is urgently needed, for part-time students in higher and further education. It is particularly important that we should be considering those students this year, which is the European Year of Lifelong Learning.

The Bill fails to consider the possibility of moving from a mortgage-type repayment scheme to an income-contingent repayment scheme, which would be fairer to the borrowers and much more secure for the lenders. The Bill fails to meet the legitimate demands for parliamentary scrutiny, and it even fails to ensure that higher education institutions are properly recompensed for the costs that they incur in the administration of the proposed scheme.

The scheme has failed, above all, to attract the rush by the private sector to become involved with the scheme that the Government assumed would occur. The Government's failure to attract the private sector has meant that, only two months after the Chancellor's Budget, the education budget is now £100 million adrift.

When the Bill was introduced, it looked weak and pallid. As we studied the Bill in much more detail in Committee, it became apparent that it was seriously ill. The building societies and the banks are avoiding it like one would avoid a contagious disease. It is a sad and miserable Bill, and hon. Members should put it out of its misery by declining to give it a Third Reading.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 276, Noes 247.

Division No. 28] [9.30 pm
Ainsworth, Peter (East Surrey) Cash, William
Aitken, Rt Hon Jonathan Channon, Rt Hon Paul
Alexander, Richard Chapman, Sir Sydney
Alison, Rt Hon Michael (Selby) Churchill, Mr
Allason, Rupert (Torbay) Clappison, James
Arbuthnot, James Clark, Dr Michael (Rochford)
Arnold, Jacques (Gravesham) Clifton-Brown, Geoffrey
Arnold, Sir Thomas (Hazel Grv) Coe, Sebastian
Ashby, David Congdon, David
Atkins, Rt Hon Robert Conway, Derek
Atkinson, David (Bour'mouth E) Coombs, Anthony (Wyre For'st)
Atkinson, Peter (Hexham) Coombs, Simon (Swindon)
Baker, Nicholas (North Dorset) Cope, Rt Hon Sir John
Baldry, Tony Couchman, James
Banks, Robert (Harrogate) Cran, James
Bates, Michael Currie, Mrs Edwina (S D'by'ire)
Batiste, Spencer Curry, David (Skipton & Ripon)
Bellingham, Henry Davies, Quentin (Stamford)
Bendall, Vivian Davis, David (Boothferry)
Beresford, Sir Paul Day, Stephen
Biffen, Rt Hon John Deva, Nirj Joseph
Body, Sir Richard Devlin, Tim
Bonsor, Sir Nicholas Dicks, Terry
Boswell, Tim Dorrell, Rt Hon Stephen
Bottomley, Peter (Eltham) Dover, Den
Bowden, Sir Andrew Duncan, Alan
Bowis, John Duncan-Smith, Iain
Boyson, Rt Hon Sir Rhodes Dunn, Bob
Brandreth, Gyles Durant, Sir Anthony
Brazier, Julian Dykes, Hugh
Bright, Sir Graham Eggar, Rt Hon Tim
Brooke, Rt Hon Peter Elletson, Harold
Brown, M (Brigg & Cl'thorpes) Emery, Rt Hon Sir Peter
Browning, Mrs Angela Evans, David (Welwyn Hatfield)
Bruce, Ian (Dorset) Evans, Jonathan (Brecon)
Burns, Simon Evans, Nigel (Ribble Valley)
Burt, Alistair Evans, Roger (Monmouth)
Butterfill, John Evennett, David
Carlisle, John (Luton North) Faber, David
Carlisle, Sir Kenneth (Lincoln) Fabricant, Michael
Carrington, Matthew Fenner, Dame Peggy
Carttiss, Michael Field, Barry (Isle of Wight)
Fishburn, Dudley Leigh, Edward
Forman, Nigel Lester, Sir James (Broxtowe)
Forsyth, Rt Hon Michael (Stirling) Lidington, David
Forth, Eric Lilley, Rt Hon Peter
Fowler, Rt Hon Sir Norman Lloyd, Rt Hon Sir Peter (Fareham)
Fox, Dr Liam (Woodspring) Lord, Michael
Fox, Rt Hon Sir Marcus (Shipley) Luff, Peter
Freeman, Rt Hon Roger MacGregor, Rt Hon John
French, Douglas MacKay, Andrew
Gale, Roger Maclean, Rt Hon David
Gallie, Phil McNair-Wilson, Sir Patrick
Gardiner, Sir George Madel, Sir David
Garel-Jones, Rt Hon Tristan Maitland, Lady Olga
Garnier, Edward Mans, Keith
Gill, Christopher Marland, Paul
Gillan, Cheryl Marlow, Tony
Goodlad, Rt Hon Alastair Martin, David (Portsmouth S)
Goodson-Wickes, Dr Charles Mates, Michael
Gorman, Mrs Teresa Mawhinney, Rt Hon Dr Brian
Gorst, Sir John Mayhew, Rt Hon Sir Patrick
Grant, Sir A (SW Cambs) Merchant, Piers
Greenway, Harry (Ealing N) Mitchell, Andrew (Gedling)
Greenway, John (Ryedale) Mitchell, Sir David (NW Hants)
Griffiths, Peter (Portsmouth, N) Moate, Sir Roger
Grylls, Sir Michael Monro, Rt Hon Sir Hector
Gummer, Rt Hon John Selwyn Montgomery, Sir Fergus
Hague, Rt Hon William Needham, Rt Hon Richard
Hamilton, Rt Hon Sir Archibald Neubert, Sir Michael
Hamilton, Neil (Tatton) Newton, Rt Hon Tony
Hampson, Dr Keith Nicholls, Patrick
Hanley, Rt Hon Jeremy Nicholson, David (Taunton)
Hannam, Sir John Norris, Steve
Hargreaves, Andrew Onslow, Rt Hon Sir Cranley
Harris, David Ottaway, Richard
Haselhurst, Sir Alan Page, Richard
Hawkins, Nick Paice, James
Hawksley, Warren Patnick, Sir Irvine
Hayes, Jerry Patten, Rt Hon John
Heald, Oliver Pawsey, James
Heath, Rt Hon Sir Edward Pickles, Eric
Heathcoat-Amory, Rt Hon David Porter, Barry (Wirral S)
Hendry, Charles Porter, David (Waveney)
Heseltine, Rt Hon Michael Powell, William (Corby)
Hicks, Robert Rathbone, Tim
Higgins, Rt Hon Sir Terence Redwood, Rt Hon John
Hill, James (Southampton Test) Renton, Rt Hon Tim
Hogg, Rt Hon Douglas (G'tham) Richards, Rod
Horam, John Riddick, Graham
Hordern, Rt Hon Sir Peter Roberts, Rt Hon Sir Wyn
Howard, Rt Hon Michael Robertson, Raymond (Ab'd'n S)
Howell, Rt Hon David (G'dford) Robinson, Mark (Somerton)
Howell, Sir Ralph (N Norfolk) Roe, Mrs Marion (Broxbourne)
Hughes, Robert G (Harrow W) Rowe, Andrew (Mid Kent)
Hunt, Rt Hon David (Wirral W) Rumbold, Rt Hon Dame Angela
Hunt, Sir John (Ravensbourne) Sackville, Tom
Hunter, Andrew Sainsbury, Rt Hon Sir Timothy
Jack, Michael Scott, Rt Hon Sir Nicholas
Jackson, Robert (Wantage) Shaw, David (Dover)
Jenkin, Bernard Shaw, Sir Giles (Pudsey)
Jessel, Toby
Johnson Smith, Sir Geoffrey Shephard, Rt Hon Gillian
Jones, Gwilym (Cardiff N) Shepherd, Sir Colin (Hereford)
Jones, Robert B (W Hertfdshr) Shepherd, Richard (Aldridge)
Jopling, Rt Hon Michael Sims, Roger
Kellett-Bowman, Dame Elaine Skeet, Sir Trevor
Key, Robert Smith, Sir Dudley (Warwick)
Kirkhope, Timothy Spencer, Sir Derek
Knight, Mrs Angela (Erewash) Spicer, Sir James (W Dorset)
Knight, Rt Hon Greg (Derby N) Spicer, Sir Michael (S Worcs)
Knight, Dame Jill (Bir'm E'st'n) Spink, Dr Robert
Knox, Sir David Spring, Richard
Kynoch, George (Kincardine) Sproat, Iain
Lait, Mrs Jacqui Squire, Robin (Hornchurch)
Lamont, Rt Hon Norman Stanley, Rt Hon Sir John
Lawrence, Sir Ivan Steen, Anthony
Legg, Barry Stephen, Michael
Stern, Michael
Stewart, Allan Walker, Bill (N Tayside)
Streeter, Gary Waller, Gary
Sumberg, David Ward, John
Sweeney, Walter Wardle, Charles (Bexhill)
Sykes, John Waterson, Nigel
Tapsell, Sir Peter Watts, John
Taylor, Ian (Esher) Wells, Bowen
Taylor, John M (Solihull) Wheeler, Rt Hon Sir John
Taylor, Sir Teddy (Southend, E) Whitney, Ray
Temple-Morris, Peter Whittingdale, John
Thomason, Roy Widdecombe, Ann
Thompson, Sir Donald (C'er V) Wilkinson, John
Thompson, Patrick (Norwich N) Willetts, David
Thornton, Sir Malcolm Wilshire, David
Thurnham, Peter Winterton, Mrs Ann (Congleton)
Tracey, Richard Wolfson, Mark
Tredinnick, David Wood, Timothy
Trend, Michael Yeo, Tim
Twinn, Dr Ian
Viggers, Peter Tellers for the Ayes:
Waldegrave, Rt Hon William Mr. Roger Knapman and
Walden, George Mr. Patrick McLoughlin.
Abbott, Ms Diane Corbett, Robin
Adams, Mrs Irene Corbyn, Jeremy
Ainger, Nick Corston, Jean
Ainsworth, Robert (Cov'try NE) Cunliffe, Lawrence
Alton, David Cunningham, Jim (Covy SE)
Anderson, Donald (Swansea E) Dafis, Cynog
Anderson, Ms Janet (Ros'dale) Darling, Alistair
Armstrong, Hilary Davidson, Ian
Ashdown, Rt Hon Paddy Davies, Bryan (Oldham C'tral)
Ashton, Joe Davies, Rt Hon Denzil (Llanelli)
Austin-Walker, John Davies, Ron (Caerphilly)
Banks, Tony (Newham NW) Davis, Terry (B'ham, H'dge H'l)
Barron, Kevin Denham, John
Battle, John Dewar, Donald
Bayley, Hugh Dixon, Don
Beckett, Rt Hon Margaret Donohoe, Brian H
Beggs, Roy Dunwoody, Mrs Gwyneth
Beith, Rt Hon A J Eagle, Ms Angela
Bell, Stuart Eastham, Ken
Bennett, Andrew F Etherington, Bill
Benton, Joe Evans, John (St Helens N)
Bermingham, Gerald Ewing, Mrs Margaret
Berry, Roger Faulds, Andrew
Betts, Clive Field, Frank (Birkenhead)
Blunkett, David Flynn, Paul
Boateng, Paul Foster, Rt Hon Derek
Bradley, Keith Foster, Don (Bath)
Bray, Dr Jeremy Fyfe, Maria
Brown, N (N'c'tle upon Tyne E) Galbraith, Sam
Bruce, Malcolm (Gordon) Galloway, George
Byers, Stephen Gapes, Mike
Callaghan, Jim Garrett, John
Campbell, Mrs Anne (C'bridge) George, Bruce
Campbell, Menzies (Fife NE) Gerrard, Neil
Campbell, Ronnie (Blyth V) Gilbert, Rt Hon Dr John
Campbell-Savours, D N Godman, Dr Norman A
Canavan, Dennis Godsiff, Roger
Cann, Jamie Golding, Mrs Llin
Carlile, Alexander (Montgomery) Graham, Thomas
Chidgey, David Grant, Bernie (Tottenham)
Chisholm, Malcolm Griffiths, Nigel (Edinburgh S)
Church, Judith Griffiths, Win (Bridgend)
Clapham, Michael Grocott, Bruce
Clark, Dr David (South Shields) Hain, Peter
Clarke, Eric (Midlothian) Hall, Mike
Clarke, Tom (Monklands W) Hanson, David
Clelland, David Hardy, Peter
Clwyd, Mrs Ann Harman, Ms Harriet
Coffey, Ann Harvey, Nick
Cohen, Harry Henderson, Doug
Cook, Frank (Stockton N) Heppell, John
Cook, Robin (Livingston) Hill, Keith (Streatham)
Hinchliffe, David O'Hara, Edward
Hodge, Margaret Olner, Bill
Hoey, Kate O'Neill, Martin
Hogg, Norman (Cumbernauld) Pearson, Ian
Home Robertson, John Pickthall, Colin
Hood, Jimmy Pike, Peter L
Hoon, Geoffrey Pope, Greg
Howarth, Alan (Strafrd-on-A) Powell, Ray (Ogmore)
Howarth, George (Knowsley North) Prentice, Gordon (Pendle)
Howells, Dr Kim (Pontypridd) Prescott, Rt Hon John
Hoyle, Doug Primarolo, Dawn
Hughes, Robert (Aberdeen N) Purchase, Ken
Hutton, John Quin, Ms Joyce
Ingram, Adam Randall, Stuart
Jackson, Glenda (H'stead) Raynsford, Nick
Jackson, Helen (Shef'ld, H) Reid, Dr John
Jamieson, David Rendel, David
Jones, Barry (Alyn arid D'side) Robertson, George (Hamilton)
Jones, leuan Wyn (Ynys Môn) Roche, Mrs Barbara
Jones, Jon Owen (Cardiff C) Rooker, Jeff
Jones, Lynne (B'ham S O) Ross, Ernie (Dundee W)
Jones, Martyn (Clwyd, SW) Rowlands, Ted
Jowell, Tessa Ruddock, Joan
Kaufman, Rt Hon Gerald Salmond, Alex
Keen, Alan Sedgemore, Brian
Kennedy, Jane (L'pool Br'dg'n) Sheerman, Barry
Khabra, Piara S Sheldon, Rt Hon Robert
Kilfoyle, Peter Shore, Rt Hon Peter
Kirkwood, Archy Short, Clare
Lestor, Joan (Eccles) Simpson, Alan
Liddell, Mrs Helen Skinner, Dennis
Litherland, Robert Smith, Andrew (Oxford E)
Lloyd, Tony (Stretford) Smith, Llew (Blaenau Gwent)
Llwyd, Elfyn Smyth, The Reverend Martin
Lynne, Ms Liz Spearing, Nigel
McAllion, John Spellar, John
McCartney, Ian Squire, Rachel (Dunfermline W)
McCartney, Robert Steel, Rt Hon Sir David
McKelvey, William Steinberg, Gerry
Mackinlay, Andrew Stevenson, George
McLeish, Henry Stott, Roger
Maclennan, Robert Strang, Dr. Gavin
McMaster, Gordon Straw, Jack
MacShane, Denis Sutcliffe, Gerry
McWilliam, John Taylor, Mrs Ann (Dewsbury)
Madden, Max Taylor, Matthew (Truro)
Maddock, Diana Thompson, Jack (Wansbeck)
Mahon, Alice Timms, Stephen
Marek, Dr John Tipping, Paddy
Marshall, David (Shettleston) Touhig, Don
Marshall, Jim (Leicester, S) Trimble, David
Martlew, Eric Turner, Dennis
Maxton, John Tyler, Paul
Meacher, Michael Vaz, Keith
Meale, Alan Walker, Rt Hon Sir Harold
Michael, Alun Wallace, James
Michie, Bill (Sheffield Heeley) Walley, Joan
Michie, Mrs Ray (Argyll & Bute) Wardell, Gareth (Gower)
Milburn, Alan Wareing, Robert N
Miller, Andrew Watson, Mike
Mitchell, Austin (Gt Grimsby) Welsh, Andrew
Molyneaux, Rt Hon Sir James Wicks, Malcolm
Moonie, Dr Lewis Williams, Rt Hon Alan (Sw'n W)
Morgan, Rhodri Williams, Alan W (Carmarthen)
Morley, Elliot Winnick, David
Morris, Rt Hon Alfred (Wy'nshawe) Wise, Audrey
Morris, Estelle (B'ham Yardley) Wray, Jimmy
Morris, Rt Hon John (Aberavon) Wright, Dr Tony
Mudie, George Young, David (Bolton SE)
Mullin, Chris
Murphy, Paul Tellers for the Noes:
Nicholson, Emma (Devon West) Mr. John Cummings and
Oakes, Rt Hon Gordon Mrs. Bridget Prentice.
O'Brien, Mike (N W'kshire)

Question accordingly agreed to.

Bill read the Third time, and passed.

Mr. Alex Salmond (Banff and Buchan)

On a point of order, Mr. Deputy Speaker. Have you had any request for a statement from any Scottish Office Minister about some remarkable developments in the Scottish Office information directorate tonight?

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I have had no request for any statements on any subjects.

Mr. Salmond

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Is it a new point of order?

Mr. Salmond

Yes. Is it within the province of the Chair to consider "Questions of Procedure for Ministers", as issued by the Cabinet Office of May 1992? As you may know, this morning the Secretary of State missed an important debate on the cold weather in Scotland to deliver a speech in Scotland which, to many people, seemed to consider some political elements. A section of that speech was subsequently withdrawn by the Scottish Office information directorate, although the text was delivered verbatim by the Secretary of State. The director of the directorate—a former press officer for Westminister City Council—has been forced to apologise—

Mr. Deputy Speaker

Order. The hon. Gentleman has been here long enough to know that that is not a matter for the Chair.

Mr. Salmond

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Is it on an entirely new subject?

Mr. Salmond

It is within the province of the Chair to consider a breach of "Questions of Procedure for Ministers"—

Mr. Deputy Speaker

Order. The hon. Gentleman knows that it is not for him to decide what is within the province of the Chair. That is for the Chair to decide. I call the Minister for Rural Affairs, the hon. Member for Daventry (Mr. Boswell).

Mr. Salmond

On a point of order, Mr. Deputy Speaker. Can the Chair advise me whether it is in order for me to raise what is an admitted breach by the Scottish Office of "Questions of Procedure for Ministers", when the director of the Scottish Office information directorate has been forced—

Mr. Deputy Speaker

Order. I am happy to advise the hon. Member that matters of ministerial procedure are entirely a matter for the Prime Minister and are nothing to do with the Chair.

Mr. Salmond


Mr. Deputy Speaker

Order. The hon. Gentleman has had three bites at the same cherry. That is quite enough for this time of night.

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