Student Loans Company

Debate between Lord Johnson of Marylebone and Barry Sheerman

Monday 20th November 2017 Commons Chamber

[Mr Speaker]

The Minister is not known as a considerable boffin for nothing.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister mentioned denigration, but no Opposition Member would denigrate the Student Loans Company. In fact, the SLC has offered a good service to many students and parents. If we compare it with our commercial banking sector, in which so many people should have gone to prison, the SLC has done very well indeed. Is there some secret agenda here? This Government are about to sell off £4 billion of student loans, and who is leading that consortium? It is British banks led by Barclays.

[Joseph Johnson]

I thank the hon. Gentleman for acknowledging the good work that the SLC does—it is important that we all recognise that. The sale of the student loan book is a policy that the previous Labour Government made possible following the passage of the Sale of Student Loans Act 2008, so there is considerable cross-party recognition of the importance of ensuring the sustainability of our public finances. The sale of the student loan book, which was made possible by the previous Labour Government, is something that this Government are quite prepared to continue.

Higher Education Funding

Debate between Lord Johnson of Marylebone and Barry Sheerman

Wednesday 11th October 2017 Commons Chamber

[Joseph Johnson]

I can certainly assure my right hon. and learned Friend that we will continue to bear in mind carefully the taxpayer interest. It is critical to remember that the Labour party’s proposals, were they to be funded out of income taxation, would add about 2.5p to the basic rate of income tax, so it is vital that we bear taxpayers’ interests in mind and we will continue to do so. He mentioned the interest rate, which we of course keep under careful review. It is worth remembering that this is a heavily subsidised loan product overall. The Government write off about 30% to 40% of the student loan book. That is a deliberate investment in the skills base of this country, not a symptom of a broken student finance system. The interest rate cannot be looked at in isolation.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Surely the Minister needs to go back to the Dearing principles. Dearing believed that the expansion of higher education should be based on the student who benefits paying the community through the taxpayer, society and the employer. Can we go back to those principles? I am worried that the Minister and the Prime Minister have already made up their minds about the review they are suggesting. The fact of the matter is that we cannot have a higher education system that is created entirely on a pile of student debt. It is time, cross-party, to think about a radical alternative to what we have at the moment.

[Joseph Johnson]

The Labour party helped to introduce the system we have today and this Government have been building on it since 2010. It is extraordinarily successful at enabling more people from disadvantaged backgrounds to get a chance to benefit from higher education. I am startled that the Labour party wants to roll back all that progress. Why would they want to reverse the changes that have enabled more than 50% more students from disadvantaged backgrounds to get into higher education? That is what the hon. Gentleman’s proposals would end up achieving.

Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Barry Sheerman

Tuesday 12th September 2017 Commons Chamber

[Joseph Johnson]

My hon. Friend has great expertise in this area, through his association with the parliamentary space committee. I can reassure him, as I did a moment ago, that we are committed to continuing to collaborate closely with European countries to develop our space sector to the benefit of all those in employment in this sector in this country.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister probably knows that precision engineering companies in Huddersfield are very much involved in the Mars probes and the space programme, but does he know that they are increasingly worried, as is the University of Huddersfield, about the future of partnerships across Europe and the funding from Europe that makes that exploration and the existence of those cutting-edge companies possible?

[Joseph Johnson]

At the ESA ministerial council in December, the UK committed a record sum of €1.4 billion to ESA. We are committed to continuing to participate in ESA, which, as the hon. Gentleman knows, is not part of the EU but a separate organisation entirely. We see great value in continuing to participate in the programmes it administers.

Sale of Student Loans: Regulation

Debate between Lord Johnson of Marylebone and Barry Sheerman

Tuesday 7th March 2017 Westminster Hall

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate. It provides a useful opportunity for me to set out the Government’s approach to the proposed sale of part of the student loan book. I would like to explain the rationale for the sale and make sure that some important points, particularly those relating to the protection of students and graduates and to our commitment to securing value for money for the taxpayer, are firmly on the record.

We are all aware that tomorrow the Chancellor of the Exchequer will make a statement to the House on the Budget. I have been re-reading the statement he made in November of last year. He set out then his commitment to fiscal responsibility, and as part of that, he was clear that public sector net debt must be falling by the end of this Parliament. It is vital that the public finances continue on the path to sustainability.

Selling assets can reduce fiscal pressures and allows the Government to invest in other policies with greater economic or social returns. The Government’s policy is to sell assets where there is no policy reason to own them and where it is value for money for the taxpayer to do so. There is clearly no policy purpose to continuing to hold the student loan book on the Government’s balance sheet.

When we provide student loans, our purpose is to ensure that people who want to pursue higher education and have the qualifications that come from it are able to do so, regardless of their personal financial situation and with no limit, now, on their numbers. As soon as a loan is issued to support a student as they study, its purpose has been met. As I will explain in more detail, the planned sale would have no impact on the position of students or graduates.

A comprehensive assessment indicates that we have a good prospect of achieving value for money. The sale process is designed to achieve the best possible price to benefit taxpayers. As additional reassurance, I must emphasise that we will only proceed with the sale if market conditions remain favourable and the final value-for-money assessment is positive.

I know there is interest in the reasons why a private investor might be interested in the student loan book. The student loan book generates a long-term, inflation-linked set of cash flows, through an efficient and established collection mechanism. Our engagement with the markets has shown that that is attractive to investors—crucially, at a price that represents value for money for the taxpayer.

[Mr Sheerman]

Could the Minister tell us who the Department has been consulting—which experts, City firms or organisations have been giving the advice that this is a viable enterprise?

[Joseph Johnson]

There has been a process of engagement with the market, which has been conducted on behalf of the Department by a number of financial advisers, including Barclays and Rothschild among others. Our engagement has shown us that this is attractive to investors at a price that represents value for money for the taxpayer.

The private sector is willing to take on the risk and uncertainty of future repayment cash flows because it values this long-dated asset, while Government are looking to transfer that risk and generate cash for reinvestment in policies with greater economic and social returns. I hope hon. Members will therefore agree that there is a strong rationale for selling part of the student loan book. It is good financial management by the Government; it can help support policies with greater economic and social returns; and can be achieved without affecting the position of students or graduates.

Hon. Members, including the hon. Member for West Bromwich West (Mr Bailey), asked whether terms might be changed. I can tell them that investors have no rights whatever to change terms as a result of any sale process.

Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Barry Sheerman

Tuesday 13th December 2016 Commons Chamber

[Joseph Johnson]

Yes, I am happy to provide a brief update. My hon. Friend is an aficionado of space policy and former chair of the parliamentary space committee, so he will be delighted to know that we had an excellent outcome at the European Space Agency’s Council of Ministers. We committed a further €1.44 billion, which has secured the future of the ExoMars programme, among many other things.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I do not want to ruin the Minister’s Christmas celebrations, which are imminent, but if he looks at the deplorable investment in research and development—the figures that came out only this week—does he not see that he needs to wake up and smell the coffee? The fact of the matter is that research and innovation will be deeply damaged by leaving the European Union. He should ask the universities what they think.

[Joseph Johnson]

I know that the hon. Gentleman will welcome the Government’s commitment to research and development, which was underscored in the autumn statement with a further £2 billion by the end of this Parliament—perhaps the biggest single increase in R and D expenditure by any Government in the memory of anyone in this Parliament.

Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Barry Sheerman

Monday 14th November 2016 Commons Chamber

[Joseph Johnson]

We certainly are not turning our back on genuine international students. We welcome them warmly. There are no limits on the number who can come here and no limit on the number who can switch into work after they finish their studies. We want to see more in the years ahead and we look forward to supporting our high quality institutions in recruiting successfully in countries such as the ones my hon. Friend mentioned.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Minister must know what is going on in the universities. They are in turmoil about the future of demand from foreign students to come here. Has he seen what the vice-chancellor of Sheffield University said about the Prime Minister’s visit to India? Why are students still classed as immigrants when they come here merely to study?

[Joseph Johnson]

I advise hon. Members to send out a positive message about how welcoming we are in this country. When we look at the statistics, we see that international students are still coming here in record numbers. Visa applications from non-EU international students to study at British universities are up by 14% since 2010, so let us not paint a completely misleading picture of what is going on. The hon. Gentleman mentioned Sheffield, which is a Russell Group institution. Numbers are up 39% at Russell Group institutions since 2010.