Sale of Student Loans: Regulation

Debate between Paul Blomfield and Jim Cunningham

Tuesday 7th March 2017 Westminster Hall

[Mr Jim Cunningham (Coventry South) (Lab)]

I beg to move,

That this House has considered regulation of the sale of student loans.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I think this is the first time I have been involved in a debate when you have been in the Chair. On your past record, I know that you will be fair and lenient.

I have two universities in my constituency, Coventry University and the University of Warwick. I have come across Members who have attended the University of Warwick, and some who have attended Coventry University. Many students at those universities have expressed concern to me regarding the sale of student loans. It is possible that to a certain extent, the Government are heaping more debt on students that they can ill afford, against a background of further education budgets receiving a 27% cut. The education allowance and the bursaries for midwifery have been abolished. Those things raise questions about the Government’s real intentions regarding skills, whether in the national health service or manufacturing.

On 6 February, the Government announced plans to sell off student loans taken out between 2002 and 2006. Conservative Governments have previously tried to introduce that policy, but they have never been successful. Indeed, the former Business Secretary, Vince Cable, scrapped the move in 2014, saying that it would not help the aim of reducing Government debt. Why are the present Government continuing to pursue the policy? With the sale of Royal Mail, we have seen how difficult it can be to achieve value for taxpayers. It could be argued that the taxpayer lost out in past privatisations. It can be controversial if the price paid seems too low, with short-term profit put ahead of the public interest. If the student loans are expected to be profitable, why are the Government not keeping them and helping the taxpayer?

The market has little experience of buying such debt, and it will be priced conservatively. It is therefore questionable whether value for money can be achieved. It has been widely acknowledged that the Government will make a loss on the sale. The price the loans are sold for is expected to be lower than the face value. It has been described by the Financial Times economic correspondent, Martin Wolf, as “economic illiteracy”. As I said, I have two universities in my constituency, so I am very concerned about the proposal, as are the students.

[Paul Blomfield (Sheffield Central) (Lab)]

My hon. Friend knows that like him, I represent two universities. He is a powerful advocate for universities and students, and he will know that students are worried about the impact on their repayments. The Government have given assurances that the repayment terms will not be affected, but there is an enormous lack of trust given that they have already retrospectively changed those terms. Does he agree that the best way for the Government to reassure students would be to use the opportunity of the Higher Education and Research Bill to give a cast-iron guarantee in law that no retrospective changes to terms of repayment will be made?

[Mr Cunningham]

I agree with my hon. Friend. Frankly, retrospective law is always bad law. The three previous sales were of mortgage-style student loans. There have been no sales of income-contingent loans. In 2013, the Government announced that the final sale of outstanding loans had been made to Erudio Student Loans for £160 million. There have been problems with those loans and a number of complaints about their handling. Can the Minister guarantee that the loans we are discussing will not be resold to overseas buyers? What mechanisms will be put in place to protect students?

European Union (Notification of Withdrawal) Bill

Debate between Paul Blomfield and Jim Cunningham

3rd reading: House of Commons & Committee: 3rd sitting: House of Commons & Report stage: House of Commons
Wednesday 8th February 2017 Commons Chamber

[Paul Blomfield]

I am sorry, but the right hon. Gentleman is wrong—and not for the first time. We have made it clear that the economy comes first, but the Prime Minister has said that her red lines are the European Court of Justice and immigration.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend takes a big interest in science and technology and universities, so does he agree that it is important for Coventry and the west midlands economy that we get a proper agreement in relation to the single market? Does he also agree that the Government have guaranteed resources only up to 2020 should we pull out?

[Paul Blomfield]

That is an important point, and my hon. Friend will note that it is highlighted in new clause 2.

Higher Education and Research Bill

Debate between Paul Blomfield and Jim Cunningham

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Report stage: House of Commons
Monday 21st November 2016 Commons Chamber

[Paul Blomfield]

My hon. Friend highlights a new dimension to the challenge facing our universities as a result of Brexit. My wider point about international students existed before 23 June, but we now face a situation in which the 185,000 international students, of some 500,000, from EU countries may no longer choose to come here. However—this is crucial in relation to my hon. Friend’s intervention—30% of the non-EU students who were polled before 23 June said that the UK would be a less attractive destination if we chose to leave the European Union. Our competitors in Europe, adding to the competition that we already get from Australia, Canada and the United States, are seizing the opportunity to teach English-language courses, which will become very attractive.

[Mr Jim Cunningham]

Coventry has two universities. A big concern following Brexit is that international students, in particular from countries such as India, are now looking at north America, given the difficulty they will have in coming to this country when they are treated as immigrants. They should be removed from immigration figures, because the benefits amount to just under £10 billion coming into this country. I hope the Government are taking that seriously.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Gentleman is certainly testing my patience. It is one thing to come in and then ask a question, but it is another thing to stretch it into a speech. The hon. Member for Sheffield Central is being generous with interventions, but we do not want to get into a Brexit debate.

Oral Answers to Questions

Debate between Paul Blomfield and Jim Cunningham

Thursday 14th July 2016 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

4. What assessment she has made of the potential effect of the outcome of the EU referendum on the ability of the UK to meet its climate change commitments.

[Mr Jim Cunningham (Coventry South) (Lab)]

6. What assessment she has made of the potential effect of the UK leaving the EU on the ability of the UK to meet its climate change obligations.

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

The UK’s climate change commitments are grounded in the UK’s Climate Change Act 2008, which commits us to a reduction in emissions of 80% by 2050, from 1990 levels. Our membership of the EU has no impact on our commitment to this Act, as hon. Members will have seen in our decision to accept the Committee on Climate Change’s advice on the level of the fifth carbon budget just two weeks ago.