Financial Services Bill

Baroness Fookes Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

Amendment 14 agreed.

[The Deputy Speaker (Baroness Fookes) (Con)]

We now come to the group consisting of Amendment 14A. Anyone wishing to press this amendment to a Division must make that clear in debate.

Amendment 14A

Moved by

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[The Deputy Speaker (Baroness Fookes) (Con)]

I understand that the noble Lord, Lord Stevenson of Balmacara, has withdrawn, so I call the noble Baroness, Lady Kramer.

[Baroness Kramer (LD)]

My Lords, we do not oppose this amendment, particularly as we have the safeguard of the GDPR in place. However, I want to make one comment. One of our major frustrations with the regulator is how slow it has been to pick up on issues—how much information seems to have come its way that there is wrongdoing, yet all its actions seem to be delayed. We went through example after example of that in Grand Committee, Blackmore and London Capital being just two of the latest examples, and I think I have even missed two more scandals that have occurred in the last couple of weeks. I hope there are some other ways in which we can put pressure on the regulator to act and to do so in a more timely manner, and that it will not see this extension as an opportunity to relax and allow more time to pass before it begins to take action when it is needed.

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[Lord Sharkey (LD) [V]]

My Lords, Amendment 15 is in my name and those of my noble friends Lady Sheehan and Lady Kramer, and I am grateful for their support.

The amendment addresses the issue of the provision of sharia-compliant student finance, of which there is none. Because Islam forbids interest-bearing loans, that prohibition is a barrier to our Muslim students going on to attend our universities. We debated this extensively in Grand Committee so I will not rehearse the arguments in detail, but I will remind the House of the timescale involved.

The problem became clear in 2012 when tuition fees were significantly increased, and it became worse when maintenance grants were replaced by maintenance loans. In 2014, the Government published their report on the consultation that they had undertaken. That consultation had attracted 20,000 respondents, a record at the time. The Government acknowledged that the lack of an alternative financial product to conventional student loans was a matter of major concern to many Muslims. The report also identified a solution: a takaful, a well-known and frequently used non-interest-bearing Muslim financial product. The Government explicitly supported the introduction of such a product.

That was seven years ago. There is still no sharia-compliant student finance available, nor have the Government ever offered a detailed reason for this long delay or indicated when it might come to an end. As I mentioned in Grand Committee, I have repeatedly asked the Government the reasons for this lack of action. I have never had a substantive response. There was no substantive response from the Minister in Grand Committee a month ago and no explanation for the delay nor any indication of a date by which the takaful would be available. There was absolutely no sense of urgency. It was as though the plight of these Muslim students was not really important or worth taking seriously.

I made the point that I had written to the Minister on 4 January this year asking for a report on progress and making some suggestions. There had been no response by then, and there was no response until 5.15 pm yesterday evening, 14 weeks after my email. The Minister of State for Universities apologised for the three-month delay without offering an excuse or an explanation and her reply was completely formulaic, containing no substantive answers. It contained no indication of when sharia-compliant student finance would be available. I was struck by the casual contempt for our Muslim community that this response so clearly signalled—an absurdly unfriendly and unfeeling response with no attempt to reassure or comfort the Muslim community. In fact, if you look at the Government’s record on all this, it is very hard to see it as anything other than discrimination against our Muslim community—not just discrimination but a failure to engage and to explain.

Our amendment would oblige the Government at last to fulfil the promise they made to the Muslim community in 2013. It would oblige the Secretary of State to facilitate the availability of Sharia-compliant financial services for students who are eligible for conventional student finance on equitable terms with students accessing these conventional products, and to do so within six months of the passing of this Act so that the next Muslim student cohort did not have to face a conflict between faith and education.

I very much hope that when the Minister responds he will be able to do better than Minister Donelan. I hope he will be able to tell the House when the Government will introduce the sharia-compliant student financial product. I hope he will set a date that will allow the next cohort of devout young Muslims to go on to university. If the Minister cannot do that—if he cannot say when he will fulfil his Government’s 8 year-old promise to our Muslim community—I will seek to test the opinion of the House. I beg to move.

[The Deputy Speaker (Baroness Fookes) (Con)]

My Lords, the noble Lord, Lord Stevenson of Balmacara, has withdrawn so I call the noble Baroness, Lady Sheehan.

[Baroness Sheehan (LD)]

My Lords, I rise to speak in support of Amendment 15 in my name and those of my noble friends Lord Sharkey and Lady Kramer. I felt it only right and the very least that I could do, as the only Muslim speaking in debates on this Bill, to thank my noble friend Lord Sharkey for his determined resolve to ensure that all students, including devout Muslims, can access finance in order to go to university.

Parents who think that it is haram—forbidden—to take out an interest-bearing loan will try to save money to pay for their children to go to university. This has become inordinately expensive and, in many cases, unachievable now, in these financially straitened times. An important point to raise here is that boys will be favoured over girls when money is tight. Access to sharia-compliant student finance will make it easier for all bright boys, and girls, to access higher education.

I note the 2014 BIS consultation—which, as my noble friend Lord Sharkey said, had a remarkable 20,000 responses—and the subsequent report, which identified takaful as a suitable, frequently used non-interest-bearing sharia-compliant financial product. In its response to the report, the Government accepted its findings and put forward an alternative finance product based on the takaful model, which would, in the interests of equity, be available to everyone. It was designed so that repayment after graduation and debt levels must be identical to those of a traditional loan, with all repayments to be made directly through the UK tax system. In addition, the alternative finance product must be applied for in the same way as a traditional loan, through the Student Loans Company.

That was six and a half years ago. The enabling legislation has been implemented in the Higher Education and Research Act 2017, but, since then, there has been no further action. In the meantime, a sharia-compliant version of Help to Buy took only five or six months to launch, from start to finish—so the delay in offering a similar scheme to students is quite inexplicable. I hope that the Minister will be able to give categoric assurance that there will be no further delay. In the absence of such assurance, I would be pleased to support my noble friend Lord Sharkey, should he seek a Division.

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[The Deputy Speaker (Baroness Fookes) (Con)]

My Lords, we now come to the group beginning with Amendment 24. Anyone wishing to press this or anything else in this group to a Division must make that clear in the debate.

Amendment 24

Moved by