Higher Education and Research Bill — House of Lords, 2017-03-13
Topic: Education
George Young (Conservative, Centre-right): My response was that we would not be allowed to under the terms of the amendment. We have flexibility, which the noble Lord would deny us. The amendment would mean that future cohorts of students and taxpayers would have to bear the risks of the scheme, because it would insulate current students from any change. Perhaps that is why the Labour Party did not legislate to prohibit changes to the terms and conditions of existing loans when they introduced the system of income-contingent loans in the late 1990s. As I said, his amendment would prevent the Government making any change to the loan agreement that would favour the borrower, were this ever to be necessary It is also important that the Government should continue to be able to make necessary administrative amendments to the terms and conditions to ensure that the loans can continue to be collected efficiently. An example of this was the repayment regulations having to be amended in 2012 to accommodate HMRC moving to an electronic system to collect PAYE income tax through employers. Not being able to make this type of technical change to the regulations would eventually affect our ability to collect repayments through the tax system Having reflected on the question that the noble Lord asked me twice, the best answer is that I am reluctant to comment on a hypothetical question I turn to the regulation of student loans. The current student loan system is heavily subsidised by the taxpayer, and is universally accessible to all eligible students regardless of their financial circumstances. As my noble friend has just reminded us, taking out a student loan is in no way the same as taking out a commercial loan, and it should not be regulated as if it was. This fact was recognised by Labour when it legislated to confirm this exemption in 2008 The key terms and conditions are set out in legislation and are subject to the scrutiny and oversight of Parliament. Extending a system of regulation designed to regulate a competitive market in personal finance to a system of subsidised loans whose terms are set by Parliament would be impractical, expensive and fundamentally ill conceived. The additional costs of the regulation would need to borne by borrowers and taxpayers and would not be in their interests I return to the point that this is a heavily subsidised government loan scheme, and it remains right that Parliament should continue to have the final say on the loan terms and conditions, as it is best placed to balance the interests of taxpayers, borrowers and students. We are committed to a sustainable and fair student funding system. Our system allows the Government, through these subsidised loans, to make a conscious investment in the skills of our citizens. We are seeing more young people going to university than ever before, and record numbers of 18 year-olds from disadvantaged backgrounds. Our funding system has enabled us to lift the cap on student numbers and, with it, the cap on aspiration I hope that this addresses the concerns raised by the noble Lord, and I therefore ask him to withdraw Amendment 145.