Debates between Lord Willetts and Baroness Berridge during the 2019 Parliament

Wed 21st Jul 2021
Mon 19th Jul 2021

Skills and Post-16 Education Bill [HL]

Debate between Lord Willetts and Baroness Berridge
Baroness Berridge Portrait The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)
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My Lords, I am grateful for the amendment tabled by my noble friend Lord Willetts, and for his thanks. It is a pleasure to engage with noble Lords. This is my first piece of legislation in your Lordships’ House, and I hope that this is the shape of things to come in terms of the tone and the reaction to this legislation.

With £19.1 billion paid out in student loans in the financial year 2020-21, and further increases forecast for future years, it is essential that the Government keep careful control of the student finance system. It is also important that they retain the ability to review and make changes to the student finance system as and when needed, without the potential delays, or the focus on process, that a requirement for a review every five years could impose. I appreciate my noble friend’s comments, but inadvertently, a process may, as the noble Baroness, Lady Sherlock, outlined, become constraining, even if it was introduced with the best of intentions.

We must ensure that the system can remain responsive to the needs of the labour market and the wider economy, and thus continue to deliver good value for students and the taxpayer. We agree that, as the noble Baroness said, there is a need for transparency. A wide range of data on student loans and repayments are regularly produced and made publicly available, which enables the Government, and other interested parties, to monitor the student loans system. These include regular publications from the Student Loans Company and the Higher Education Statistics Agency.

As the noble Baroness, Lady Sherlock, outlined, the Government have updated the student loan offer in recent years, with the introduction of several new loan products, including loans to support postgraduate and doctoral study, and we will continue to make changes as and when necessary. Through the Bill, the Government are also introducing a lifelong loan entitlement that will open up new routes for people to retrain and upskill flexibly throughout their lives.

In relation to some of the questions raised by the noble Baroness, Lady Bennett, the fees cap of £9,250 is frozen for this year and the next academic year. She talked about the burden, and the responsibility, obviously, is to repay a loan, but 30 years is at the moment akin to many of the mortgage products available on the commercial market.

As the noble Lord, Lord Willetts, correctly predicted, I shall take this opportunity to remind noble Lords of the recommendations regarding higher education, including on student loans and graduate repayments, that were made by the independent panel appointed to provide input to the review of post-18 education and funding. The Government are carefully considering these recommendations before setting out a response to the review, along with the comprehensive spending review.

In conclusion, while I am sorry to disappoint my noble friend for the second time in recent days, I hope that my remarks have reassured him, as I know this has been an issue of concern to him for many years. I hope that he will feel comfortable in withdrawing his amendment.

Lord Willetts Portrait Lord Willetts (Con) [V]
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I am grateful to the Minister for her courtesy, as always. I do not think my score on the amendments that I have tabled to the Bill has been very high—and I will, of course, withdraw this amendment. However, I hope that it will be possible to come back and consider this matter further.

I shall comment briefly on what has been said. The noble Baroness, Lady Bennett, came to this from her own perspective, which was interesting. I much appreciated the fact that she too made the case for some kind of structure involving a review every five years. I can assure the noble Baroness, Lady Sherlock, and the Minister, that there is nothing in the amendment that would stop specific changes at specific times. We have had a lot of those, and that may well carry on.

What I am trying to provide for is something more systematic every few years. I am trying to avoid the need for something like Augar—the setting up of a special inquiry—when it should just be natural that every five years we look at what has happened to graduate earnings, at how much of the graduate loan book is likely to be repaid, and at the terms of maintenance support, and we decide whether there should be any changes in the light of changing circumstances—or, indeed, changing political priorities. Providing that kind of health check on the system as a whole every five years would not deprive Ministers of power; it would actually provide an opportunity for a sensible wider public debate on a subject that is often seen as obscure and difficult but should not be because it is of such public interest.

As I said, I will not press the amendment to a vote today, but I hope that perhaps, over the summer, it might be possible to meet the Minister and consider with her not only this but some other amendments that I have tabled, in case we can find a way forward that takes account of the legitimate concerns that she has expressed. I also hope that she recognises that my amendments are aimed at improving the system in line with the Government’s own policy objectives.

Skills and Post-16 Education Bill [HL]

Debate between Lord Willetts and Baroness Berridge
Baroness Berridge Portrait Baroness Berridge (Con)
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My Lords, I shall first resist the temptation to respond to the noble Baroness’s comment that she has been in opposition too long. I pay tribute to all noble Lords who have outlined the role of the Student Loans Company. It has no statutory functions of its own but exists as the student loan delivery arm of the Secretary of State, exercising powers delegated by him or her. The noble Baroness, Lady Sherlock, is correct that my noble friend Lord Willetts is suggesting a fundamental change of role for the Student Loans Company, whether as a post box, a communications agent or a marketing agent. While I thank my noble friend for his amendment, I do not believe it is necessary or wise.

The Government already publish a wide range of data, including earnings information by higher education provider and subject of study up to five years post graduation. It comes from the longitudinal education outcomes database, commonly known as LEO. The database has a wider coverage than the Student Loans Company, as it considers all graduates rather than just those who take out a student loan. Secure access to this data is granted to accredited researchers through the Office for National Statistics, to answer research questions. So while HE providers, although they do some of the best research themselves, cannot access LEO data to look at individual graduate outcomes, the data that is already published is sufficient to meet those research needs. On the point made by the noble Baroness, Lady Sherlock, the LEO database holds data by subject, provider, gender and region—so it does provide good access.

In relation to the comments made by the noble Baroness, Lady Garden, obviously the data that I have outlined is only one factor in the value of a higher-education qualification. I hope that all noble Lords will agree that we see the value immensely of her education, and the roles that some people undertake for very modest salaries are incredibly valuable. We have seen that a lot during the pandemic.

The second part of my noble friend’s amendment includes a duty to facilitate universities’ communication with their graduates through the Student Loans Company, without passing on any personal data, unless a graduate has specifically opted out. I noticed the Member’s explanatory statement states:

“This amendment enables universities to use the SLC to communicate with their graduates to encourage greater uptake of lifelong learning opportunities.”

As I have outlined, the SLC is not really there to be used by the universities. It is there for the students and to ensure that there is proper finance. The Student Loans Company should hold data only on students who own or are repaying a loan, so not all graduates are captured. Again, the onus is on the graduate to ensure that the Student Loans Company has their most recent contact data after they complete their studies. It will not surprise noble Lords that, unfortunately, not all graduates do this.

To answer my noble friend’s question, are we really looking now to place a duty on SLC to chase down the graduates for contact information when it does not have it? Such a system, as outlined in the amendment, to facilitate communication between the universities and the Student Loans Company, unfortunately would incur up-front and ongoing costs, plus potential data implications, as the noble Baroness, Lady Sherlock, highlighted. The roles suggested would involve a considerable burden on the Student Loans Company. It is best left to universities to reach out to their alumni directly through existing communication channels. As I mentioned in relation to the Member’s explanatory statement, if the Student Loans Company were to take on a role of communicating about lifelong loan entitlements, would it be after just one university, or three institutions, as the noble Baroness, Lady Sherlock, outlined? This is a considerable administrative, communication or marketing task that we would be asking of the SLC.

The final part of the amendment proposes facilitating the National Employment Savings Trust to communicate through the Student Loans Company, effectively encouraging students to consider saving into the NEST pension scheme once they get towards paying off their student loans. Automatic enrolment has achieved a quiet revolution through getting employees into the habit of pension savings, reversing the previous decline in workplace pension participation seen in the decade before the start of the reforms. As my noble friend Lord Willetts mentioned, it has succeeded in transforming pension saving for millions of workers. Since 2012, workplace pension participation rates for eligible employees aged 22 to 29 increased from 35% to 86% in 2019.

While encouraging graduates to work towards future financial resilience is right, the Government do not agree that this amendment is the right means to do so. A graduate or postgraduate would not be able to join the NEST pension scheme directly. NEST was established to support automatic enrolment and operates under a public service obligation to accept any employer who wishes to use the scheme to meet their automatic enrolment duties. Given that NEST is a workplace pension scheme, this means that most people typically would join through their employer but, in some cases such as self-employment, people can enrol themselves. In addition to operating under a public service obligation, NEST also receives a government loan to cover its running costs. This amendment would be seen as giving NEST an unfair advantage in a competitive pensions market. I am sorry to inform my noble friend Lord Willetts that this too would not be possible.

I have to say that I also agree with the noble Baroness, Lady Sherlock, that this would also take away from the core role. Like any organisation, the Student Loans Company has a limit on what it can deliver at any one time and there is already an ambitious reform programme, including the delivery of the lifelong loan entitlement, which I assure noble Lords will keep all those employees, mainly in Darlington, very busy over the next few years.

Laudable though the aims of this amendment are, the Government’s position is that changing the role of the SLC is not the vehicle to deliver this. It is unfortunately not a treasure trove, as my noble friend Lord Lucas outlined. I thank my noble friend Lord Willetts for his amendment but hope that, having considered these points, he will withdraw it.

Lord Willetts Portrait Lord Willetts (Con) [V]
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My Lords, I am grateful to noble Lords for a very interesting debate. I particularly agree, of course, with the points made by the noble Lord, Lord Adonis, and my noble friend Lord Lucas. I assure the noble Baroness, Lady Garden, that—although it was fascinating to hear her personal biography, which is indeed a reminder that there is more to universities than subsequent earnings—there is nothing in this amendment that says that is the be-all and end-all of universities. It simply recognises that we have this organisation, the Student Loans Company, in place and that we have a problem, which I very much regret was not acknowledged by the Minister: most universities have no means of communicating with most of their graduates. That is a real barrier to the Government’s own objective of promoting lifelong learning, although there are other objectives as well and the point made by the noble Lord, Lord Adonis, about mentoring seemed to me very relevant.

Meanwhile, a separate government agency is communicating with graduates—namely, the Student Loans Company. Of course it is correct that, at the moment, it is simply collecting money from them, but I do not see why that is not also an opportunity to do something additional. I am very much aware of the practical operational problems of the Student Loans Company, having wrestled with them myself for several years, but this request would be under ministerial guidance; Ministers and the Department for Education, together with the Student Loans Company, would have the ultimate say on what messages were communicated. It seems to me that the Minister is in danger of missing out on a really important opportunity to achieve one of her own objectives.

This is the kind of debate that we might have had about NHS data 15 or 20 years ago, when some Health Minister turned out to say, “No, it wouldn’t be acceptable for hospitals to communicate with people who have had appointments or been at the hospital”. The fact is that data and communication matter. We have to be imaginative in harnessing the opportunities that we have to communicate.

I very much regret the Minister’s approach. I will, of course, withdraw my amendment now, but I hope it might be possible to consider further ways in which some version of this thoroughly innocuous amendment can be used to achieve an objective that is shared across the House. It should be done only within the capacities of the Student Loans Company, and only for purposes of which Ministers approve but I think that, if Ministers do not take this chance, there will be a moment in the future when they say, “Why on earth didn’t we do this? It would have been so useful”. We could be providing universities with more information about their graduates; we could be enabling graduates to have more information about what their universities can do for them and what they can do for their university. In the light of the debate so far, however, I beg leave to withdraw this specific amendment now.