Student Loans Agreement

Lilian Greenwood Excerpts

Monday 18th July 2016 Westminster Hall

[Paul Blomfield (Sheffield Central) (Lab)]

Thank you very much, Mr Pritchard: a good choice, but I am sure my hon. Friend the Member for Ilford North (Wes Streeting) will top my contribution.

It is a pleasure to contribute to the debate with you in the Chair, Mr Pritchard. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on introducing it, in her customary way, so comprehensively and with such passion. I am also pleased to see that the Minister still in his place. I am looking forward to long debates with him in the weeks ahead on the Higher Education and Research Bill, starting tomorrow.

The Minister has drawn a bit of a short straw today, because he has to defend something that is, frankly, pretty indefensible. I am very grateful to all the people who signed the e-petition to ensure that we have this debate today—I think the second highest number were from my constituency. I am also grateful to all those who have written me to share with me the impact this change will have on them—not so much financially, but in the way they feel they have been treated by the Government.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sure that my hon. Friend will make a fantastic speech. Like him, I represent many thousands of students in my constituency and, again like him, I have received many emails about this subject. Does he agree with me and indeed with my constituents—Tamsin, Elizabeth, Tom and many more—that these plans are dangerous, unfair and frankly outrageous?

[Paul Blomfield]

My hon. Friend is perhaps making all our speeches redundant: she has summed it up in a sentence. Nevertheless, I will continue.

My hon. Friend makes an important point. Let me cite one of my constituents who has written to me. Rachel Stamper is due to graduate soon from Sheffield Hallam University. She started her degree—a bachelor of arts in early childhood studies—back in 2013. She made careful calculations before she started. She looked at what the Government said—that she would have to pay back on the money she borrowed. Like everybody else, she was told that from April 2017 the £21,000 repayment threshold would start to rise annually with average earnings. She based her decision to go to university on that information, because she thought that she could trust the Government.

Rachel made the calculations about what she could afford on the basis of the trust that she put in the Government. Now, she expects to pay thousands more over the life of her loan, because, given her area of study, she will graduate with an incredibly socially useful degree, fulfilling a positive and useful role within our society, but she is not necessarily going to be a high earner. As Rachel said to me, this is about more than “just money”:

“A retrospective change will destroy any trust I, and future generations, have in the student finance system, and perhaps even more widely, in the political system as a whole.”

This proposal was part of a double whammy announced by the then Chancellor after the election last July. As Osbornomics seems to have been rejected by the new Prime Minister, perhaps we now have a little bit of wriggle room to examine some of its more toxic components. This change is clearly one of them, because the first part of that double whammy was the abolition of maintenance grants, which in many ways overshadowed the decision we are talking about today. Nevertheless, the change in the threshold is important because it will have a genuine impact on graduates.

Why are we here today? Why are the Government proposing this change? My hon. Friend the Member for Warrington North made the point very well. Going back to 2012, the year before the system came in, many of us argued that the proposed new system was not only unfair, but that it had not been properly thought through—there was a back-of-an-envelope calculation of what the cost would be. In particular, we talked about the cost of unrepayable debt—the so-called resource accounting and budgeting, or RAB, charge. I remember the Universities Minister at the time, for whom I had a high regard, arguing on the Floor of the House and in the Select Committee on Education, on the number of occasions we scrutinised him about it, that he was confident that the RAB charge would settle at around 28%. As the conversation went forward over the years, he talked about 30% and then the upper 30s. Then it was 40% and finally, in our last exchange in the Select Committee, he said that the Department for Business, Innovation and Skills was modelling it at more than 50%, at which point the new system was clearly costing us more than the old system, on top of being unfair.

Something had to give, and it was clear before the last general election that something was going to give. I asked Ministers on the Floor of the House for assurances that they would not make students pay for the Government’s own mistakes by changing the terms of the system. I was told, in this great language that people use before elections, that there were no plans to do so. Well, no sooner were the votes counted than the plans were rolled out.