Oral Answers to Questions

Nicholas Dakin Excerpts

Thursday 8th November 2012 Commons Chamber

[Mr Willetts]

I congratulate that company on its performance. UK Trade & Investment is running export week in the next week, with more than 100 events throughout the UK, which is a great opportunity for businesses to get further advice about exporting. The automotive sector, of which the company in my hon. Friend’s constituency is an example, is now running its first balance of payments surplus since 1975.

[Nic Dakin (Scunthorpe) (Lab)]

4. What estimate he has made of the proportion of loans for students starting courses in 2012 with fees of £9,000 a year which will not be fully repaid.

[The Minister for Universities and Science (Mr David Willetts)]

We estimate that around half of all borrowers will have some part of their loan written off, as repayments are contingent on their future income. Our reforms are more progressive than the previous system, because people start to repay only once they are earning over £21,000. The new system helps reduce the deficit and is affordable and sustainable for the Government, while offering protection to those who may not go on to high paid employment.

[Nic Dakin]

I thank the Minister for that response but, despite what he says, some estimates put the cost of the Government’s higher education funding policy at £1 billion more than anticipated, completely wiping out any expected savings. How will he plug that gap?

[Mr Willetts]

There is no such gap. That report was an eccentric interpretation of the evidence. Our figures have been checked by the independent Office for Budget Responsibility, and the independent Institute for Fiscal Studies has produced its own estimates and reached conclusions that are very similar to ours.