Student Loan Book: Sale Debate
Full Debate: Read Full DebateDepartment: Department for Business, Energy and Industrial Strategy
Philip Hollobone
Main Page: Philip Hollobone (Conservative - Kettering)Department Debates - View all Philip Hollobone's debates with the Department for Business, Energy and Industrial Strategy
Student Loan Book: Sale
Philip Hollobone Excerpts(5 years, 8 months ago)
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Mr Gyimah
I object to the hon. Lady’s point that the loan sales plan was snuck out under the radar. The proposal was set out in a written ministerial statement for the House to see, which is obviously why the Opposition spokesperson is in a position to ask an urgent question today. Student loan sales in this country have happened over nearly two decades. This is not new, and it started with two sales of mortgage-style loans under the previous Labour Government in the late 1990s. It was that Labour Administration in 2008 that passed the enabling legislation for the current sales. As I have said, the sale will not affect borrowers, who will continue to deal with the Student Loans Company.
The National Audit Office did refer to the write-down of the loan book, but anybody who has studied accounting will know that the present value of a future income stream will be lower than the value if one waited 30 years. In capturing some of that money, the Government can invest in vital public services today, and that is the rationale for selling the student loan book—the previous Labour Government saw that rationale as well.
The sale will also be good for the taxpayer. Once people have been to university, it serves no public purpose to have the money tied up. The sale will release that money to invest in other priorities. On the valuation, the face value of the sale is £3.9 billion, but what we will do and how we will look to proceed will ultimately depend on market conditions.
Mr Philip Hollobone (Kettering) (Con)
What is the Minister’s range of estimates for how much money the sale might raise, and will he confirm to the House that any money raised will be reinvested in other public services?
Mr Gyimah
My hon. Friend will be aware that money raised from student loan sales goes to the Treasury, which makes a decision about in which public services to invest that money. This ultimately means that the taxpayer gets some of the reward now, rather than having to wait for 25 years. We are working with professionals on the range of estimates and I am happy to share it with my hon. Friend when we have the answer.