Student Tuition Fees and Maintenance Loans Debate
Full Debate: Read Full DebateLord Davies of Oldham
Main Page: Lord Davies of Oldham (Labour - Life peer)Department Debates - View all Lord Davies of Oldham's debates with the Department for International Development
(5 years, 8 months ago)
Lords ChamberMy Lords, this may be a technical issue but the decision helps to make the Government clean and honest in a crucial respect. The Minister will appreciate that what it does is to end the fiscal illusion of keeping student debt off government books.
The amount is not trivial: the ONS identifies £12 billion, which is just about equal to the sum the Chancellor treated as a windfall from the OBR when he was constructing his Budget. Of course, it gave him the chance to go on a small spending binge, mainly to the advantage of the better-off in our community, rather than those in greater need. Will the Minister explain how the Government will respond to this rupture in their fiscal targets? As I say, it is not a minor figure. What damage do the Government anticipate will be done to future student prospects and the service our higher education community provides? He will know that the decision has occasioned considerable anxiety in those circles. Does he welcome the end to the Government’s rather despicable practice of selling off part of the student loan book for a song, thereby ensuring that government coffers are filled but that the taxpayer foots the bill in the long run?
It is not correct to say that student loans are not on the Government’s books. Of course, the national debt does take into account the full cost of student loans—they are listed there. The question at issue, which was addressed by the ONS, was whether the repayment rates should be reflected in the deficit—the total is in the debt but not in the deficit—and it came down on the side of believing that that ought to be recognised in the year in which the loan takes place, rather than waiting until the end of 30 years to figure that out.
We do not mark our own homework on this. We follow the existing rules, as all Governments have done. The ONS has offered a view and made a recommendation, and we will follow that through.