Clause 1
Sale of Student Loans Bill
4:00 pm
Bill Rammell (Minister of State (Lifelong Learning, Further and Higher Education), Department for Innovation, Universities and Skills; Harlow, Labour)
I beg to move amendment No. 1, in clause 1, page 2, line 4, at end insert—
‘(4A) Transfer arrangements shall have effect (and, in particular, a provision transferring rights or obligations is sufficient to effect the transfer).’.
I did not say this morning what a pleasure it is to be under your chairmanship, Miss Begg. I hope that all members of the Committee realise that this is a minor and technical amendment. The intention behind the Bill is to give the Secretary of State the legal power to transfer his rights in respect of income-contingent student loans. We have reconsidered the drafting of clause 1 and wish to remove any potential for it to be construed in the commercial sector in a way that differs from the policy intent behind the Bill. We want it be completely clear that the Bill will give effect to transfers in itself, rather than simply giving the Secretary of State the power to make sales under general legislation governing contracts.
Although the Bill as it stands is clear—that is certainly my reading, and it was the view previously, including on Second Reading—it is important that potential purchasers in the commercial sector should be in no doubt as to what it enables the Secretary of State to do. If they thought that there was any question over whether the transfer would have legal effect, they would probably reduce their valuation of the loan portfolio and any securities backed by it, which would clearly damage our prospects of getting good value for money. It is therefore appropriate to remove that uncertainty, however slight it might be, to ensure good value for money for the taxpayer. This technical amendment will put beyond doubt our intention, which is that the Bill, in itself, will enable sales of loans that will have legal effect. I hope that that is uncontroversial and I therefore commend the amendment to the Committee.