Clause 5

Sale of Student Loans Bill – in a Public Bill Committee am 5:30 pm ar 4 Rhagfyr 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn


Question proposed, That the clause stand part of the Bill.

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

There are issues about who might act as a collector on behalf of the loan purchaser. Clause 5(2)(a) stipulates

“collection by a person acting on behalf of a loan purchaser”.

We have some doubt about that. Some reassurances were offered during our earlier considerations, but it would be useful to put those on the record again here. The anxiety is that the collection agent should be the Student Loans Company, or someone directly accountable to it; that the line of accountability should not be stretched to a point where graduates are disadvantaged.

Clause 5(2)(b) concerns the issue of Her Majesty’s Commissioners for Revenue and Customs. Regarding the repayment of loans by people who are not resident in the United Kingdom, I wonder whether we should firm up the fact that the power to collect student loans lies with HMRC and the Student Loans Company, and not another agent. That was discussed at some length during our deliberations this morning, but these are important matters for popular reassurance. I hope that the Minister will clarify and amplify some of the points that he made during that earlier scrutiny.

Photo of Sarah Teather Sarah Teather Shadow Secretary of State

We discussed this issue this morning, but I was not clear about the answer. I asked the Minister what would happen in the case of a default. He said that there is no need to pass data between the Student Loans Company and the SPV, but what I was asking was whether there is a legal prohibition, either in the Bill or in the data protection legislation, to ensure that that does not happen.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Innovation, Universities and Skills

The latter would come by means of a contract and I hope that that provides a reassurance. In respect of the hon. Gentleman’s questions, we have made it clear that we intend to ensure, by use of contractual obligations, that the private purchasers, through the SPV, use the Student Loans Company to administer the loan repayments on its behalf. We intend the Student Loans Company to carry through its review of the administration of student finance, which is called “Customer First”. That is very much our intention. However, if we were to stipulate in statute today that the Student Loans Company would carry out that task for ever and a day, that would bind our hands unnecessarily and we would have to come back to legislate on that issue when there are already other protections in place.

Photo of John Hayes John Hayes Shadow Minister (14-19 Reform and Apprenticeships)

That was a weak argument when it was used this morning and it is a weak argument now. Many such bodies are specified in legislation. The nature of legislation is that sometimes one has to specify those agents and bodies—those organs of government. The Government would be much more likely to satisfy the doubts and assuage the fears of those who have reservations about this matter if it were to put what the Minister said at the beginning of his remarks in the Bill. That would be something of the order that collection should be by the Student Loans Company.

I understand that the Minister is concerned about fixing that measure in stone, but my goodness, if that view prevailed in respect of legislation, we would pass virtually nothing here. So I am not so sure that that is a very convincing reason not to put this measure in the Bill. At the very least, it would deal with any doubts that exist about people collecting debts who ought not to be.

Photo of Bill Rammell Bill Rammell Minister of State (Lifelong Learning, Further and Higher Education), Department for Innovation, Universities and Skills

I am genuinely not convinced that making that change is necessary. I know that we are in something of a limbo because amendments have not been tabled, but if the hon. Gentleman feels strongly about this matter then, without giving any commitment, he should table an amendment on Report that we could debate and consider, although I do not believe that that is necessary.

The hon. Gentleman’s other point was in respect of those people who are repaying outside of the pay-as-you-earn system. They must undertake those repayments, at the moment, directly to the Student Loans Company. That will continue to be the case whether or not—again, I state this for the record—the debt is owned by the Government or by the private sector.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clauses 6 to 7 ordered to stand part of the Bill.