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House of Commons

Friday 20 October 1989

The House met at half-past Nine o'clock


[Mr. Speaker-- in the Chair ]


Tuition Fees and Student Loans

9.34 am

Mr. Graham Allen (Nottingham, North) : It is appropriate that on this day I should present a petition from my constituents of Nottingham, North, and from the Bilborough college, which is headed by the names of Tom Anderson and Lucy Dilheart, against the imposition of any student loans and tuition fees. This petition comes from the city that has already had to suffer a city technical college absorbing money from the education system rather than having that money put towards tuition fees and student loans.

To lie upon the Table.

Mr. Lorrain Osman

Mr. Chris Smith (Islington, South and Finsbury) : I wish to present a petition relating to the circumstances and the fate of Mr. Lorrain Osman who has been held on remand without trial in Pentonville prison for nearly four years--the longest serving prisoner without trial in this country this century.

The petition is signed by 500 people, including hon. Members from both sides of the House. The signatories also include Sir Hugh Casson, Margaret Drabble, Germaine Greer, Richard Hoggart, Alan Plater, Simon Rattle, Sir Roy Shaw and Jill Tweedie. The text of the petition reads as follows :

The humble petition of residents of the United Kingdom sheweth That Lorrain Osman has now been held in Pentonville prison for 1,341 days without trial ;

That the original arrest warrant against him in Hong Kong has been quashed by the Appeal Court of Hong Kong ;

That the cases in Hong Kong against all his co-defendants save one have been

dropped or dismissed ; that there has been widespread prejudicial publicity in Hong Kong, some of it racialist in tone ; and that should he be returned to Hong Kong and convicted he would, in 1997, be handed over to the authorities of the People's Republic of China whose recent barbarous acts are known to the whole world. Article 6 of the European convention on human rights, by which the United Kingdom is bound, requires that accused persons should be brought to trial promptly. The petition states

that the law of Scotland defines "prompt" as 110 days.

It then concludes :

Wherefore your petitioners pray that your Honourable House will ask the Home Secretary to comply with the treaties by which the country is bound and that he will exercise that discretion which he possesses to end Mr. Osman's inhumane and unjust incarceration.

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I have great pleasure in submitting the petition to the House. To lie upon the Table.

Tuition Fees and Student Loans

Mr. Max Madden (Bradford, West) : I wish to present a petition signed by Paul Wilkinson of Pemberton drive, Bradford, president of the University of Bradford union and 700 constituents, including students. The petition reads :

The Humble Petition of citizens and students of Great Britain and Northern Ireland sheweth that any proposals to introduce the payment by students of tuition fees and student loans, whether partially or fully, will further limit access to higher education.

Wherefore your Petitioners pray that your Honourable House do reject any proposals to introduce the payment by students of tuition fees or student loans.

My constituents and the petitioners urge the Secretary of State for Education and Science, whom I am pleased to see in his place, to understand that young people, especially those from working class backgrounds, will be discouraged from going into higher education because they will fear that they will be unable to get a decent job enabling them to-- [Interruption.]

Mr. Speaker : Order. It is not in order to make a speech when presenting a petition.

Mr. Madden : The petitioners also believe that young people will not want to incur a lifetime of debt to pay for excercising their right to enter higher education.

To lie upon the Table.

Mr. Mike Watson (Glasgow, Central) : I wish to present a petition on behalf of some 600 constituents at Glasgow college, a central institution within my constituency. It has been signed by Donna MacKinnon of 51 Camphill avenue, John Watt, and by some 600 others. The petition reads :

The Humble Petition of citizens and students of Great Britain and Northern Ireland sheweth that any proposals to introduce the payment by students of tuition fees and student loans, whether partially or fully, will further limit access to higher education.

Wherefore your Petitioners Pray that your Honourable House do reject any proposals to introduce the payment by students of tuition fees or student loans.

My constituents are particularly concerned that the White Paper does not mention that the proposals would hit students in Scottish institutions and colleges proportionately harder were they to be introduced, given that Scottish courses traditionally last four rather than three years.

To lie upon the Table.

Mr. Nigel Griffiths (Edinburgh, South) : I beg to present a petition from 1,432 students studying at Napier college in Edinburgh, headed by Mr. John Barr of Fernieside gardens and Mr. Ben Kingston of Strathearn road in my constituency. The petition protests against the Government's iniquitous student loans proposals which are so damaging to Scottish education in particular and to education in the United Kingdom in general.

To lie upon the Table.

Mr. Nigel Spearing (Newham, South) : I beg to present a petition from more than 590 medical students at London hospital and Newham general hospital, east London and all hospitals in the London hospital training district. Not

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only are many of these students presently living in east London but their presence sustains the local medical structure and many, when qualified, stay to serve the people of the east London boroughs, who are among the most deprived in Britain.

The petition shows that the introduction of loans into the grant structure will be prejudicial to all students but will have even greater effects on medical students in general and those in London in particular. The reasons for this are as follows. First, medical students have no opportunity for vacation employment during the final three years of their five-year course when they have to pay for specialist personal equipment, essential but expensive textbooks, and more travel to teaching and practice centres.

Secondly, the additional cost of living in London--likely to increase still further--will act as a further deterrent for applicants to the London medical schools and will also reduce the significant proportion of future doctors taking the optional sixth year bachelor of science degree in medical technology. The consequential effects on the quality, variety and coherence of medical education in the University of London will inevitably undermine its status and reputation in, and contribution to, worldwide medicine.

Thirdly, since loans may be more quickly repaid-- [Interruption.]

Mr. Speaker : Order. It is in order to read out the petition.

Mr. Spearing : I am grateful, Mr. Speaker. I should say that the petition is rather longer than my description of it.

Thirdly, since loans may be more quickly repaid by medical employment in sectors other than community care, their introduction will prejudice these services, particularly where teaching links have been established with local community medicine, for example, in east London, where its services to east Londoners will be prejudiced. Furthermore, the introduction of loans will inevitably bear more heavily on students of modest means and women, since the prospect of specific family responsibilities will reduce their capacity for repayment. For medical students of both categories the effects will be disproportionate for the reasons described. Since loans will produce additional deterrents and penalties for these and other groups of students the scheme will have discriminatory effects. The petition concludes :

Wherefore your Petitioners pray that your honourable House will petition Her Majesty's Government to reconsider their plans for students' loans in general and to investigate their likely effects on medical students and medical education in London, and consequential effects on the quality of medical practice and provisions in our capital city.

To lie upon the Table.

Mr. Anthony Nelson (Chichester) : On a point of order, Mr. Speaker. Whatever one's opinion about the merits of the Government's proposals, is it not an abuse of at least the spirit of the procedures of the House that today's debate should be pre-empted by the presentation of a series of petitions? Will there be an opportunity during the debate to draw attention to the attendance of those hon.

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Members who have presented the petitions to discover whether they sit through the debate on a matter about which they profess to be so concerned?

Mr. Tony Baldry (Banbury) rose-- Mr. Speaker : Taking a further point of order will delay the debate, but I shall hear it.

Mr. Baldry : Further to that point of order, Mr. Speaker. Will you confirm the rules in relation to the presentation of petitions? If one is entitled to read out the whole of a petition, as I am my own Member of Parliament, is it in order for me on Fridays, when I want to make speeches early, simply to present a petition on behalf of myself as my Member of Parliament, which is what Opposition Members seem to have done today? That would prevent my having to wait patiently to take part in the debate, as other hon. Members appear to do.

Mr. Dennis Skinner (Bolsover) rose --

Mr. Speaker : We are delaying the debate, but I shall hear another point of order. However, I hope that hon. Members who wish to take part in the debate will not feel unhappy about the delay.

Mr. Skinner : Further to that point of order, Mr. Speaker. Will you confirm that the changes in relation to petitions took place some time ago while the present Government were in power? The decision to change the nature of the presentation of petitions was done in accordance with the wishes of the Government's Chief Whip to facilitate the business of the House. Will you also confirm to Conservative Members who do not often come to the House on Fridays that petitions are presented almost every Friday morning, whatever the debate? Will you also confirm that it might well be an abuse of the House for the Government to table for debate on a Friday an important topic such as student loans when it should be scheduled on another day to allow a vote at the end of the debate?

Dame Elaine Kellett-Bowman (Lancaster) rose--

Mr. Speaker : I could easily answer these matters, but I shall hear the hon. Lady.

Dame Elaine Kellett-Bowman : Further to that point of order, Mr. Speaker. My students came to see me yesterday and I presented my petition yesterday precisely to save time today because I propose to be here throughout the debate and want to hear what hon. Members have to say.

Mr. Madden : Further to that point of order, Mr. Speaker. I hope that the Government and their supporters are not seeking to intimidate hon. Members in order to dissuade them from bringing petitions, as is their right. It ill becomes Government supporters to belly-ache about the presentation of petitions, the contents of which they dislike, when hon. Members are speaking on behalf of constituents who find Government policies most offensive and unpopular.

I hope that you, Mr. Speaker, will dispel any lingering suspicions that, rather than having television cameras in the Chamber to show people what goes on in this place, their arrival might limit the rights of hon. Members by stifling our right to debate or to present petitions. Therefore, will you make it abundantly clear that we have every right to present petitions? We shall continue to

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present them as long as this Government continue to present offensive and unpopular policies which hit many of our constituents very hard.

Mr. Spearing : Further to that point of order, Mr. Speaker. Will you please confirm that when a petition has been passed by the Table Office as being in order, and if its contents are sufficiently accurate and are in reasonably objective language which is not too lengthy, it is the right of hon. Members to read out either it or a description of it to the House? Will you also confirm that the presentation of petitions is one of the most ancient practices of this House? They can be used to petition the House to initiate action or to bring attention to grievances which have been provoked by the Executive and to which the petitions can be a reaction. Many of this morning's petitions fall into the second category. Therefore, the reasons for the petitions lie with the Government and the initiatives which they have taken, not with any other quarter.

Mr. Tony Benn (Chesterfield) : Further to that point of order, Mr. Speaker. Will you consider the fact that the right of petition is the most ancient right, not of hon. Members but of their constituents. Those who petition the House are protected from punishment outside it, as a case now before the Committee of Privileges establishes. Therefore, were any attempt to be made to limit the right of petition, it would not be hon. Members who suffered but those who seek the protection of the House when complaining about matters that concern them and their welfare.

Mr. Speaker : Let me clarify the issue. The right hon. Member for Chesterfield (Mr. Benn) is absolutely right : the presentation of petitions is time-honoured--indeed, Parliament has proceeded by petition since the earliest times--but nowadays, although it is still the absolute right of an hon. Member to present a petition on behalf of his constituents, he should do so by summarising its contents briefly or reading its prayer. It is not in order for a long speech to be made. Nevertheless, this is a time- honoured procedure, and I hope that it will continue.

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Student Loans

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. John M. Taylor.]

9.49 am

The Secretary of State for Education and Science (Mr. John MacGregor) : I am delighted that we are having this debate. Earlier this week the hon. Member for Blackburn (Mr. Straw) made some ridiculous charges, suggesting that we felt some nervousness about the student loans scheme because we were holding the debate today. That suggestion, however, is easily rebutted by the fact that we are happy to have a whole day's debate on the matter. The hon. Gentleman's charge is even more extraordinary, given that we are doing so in response to a request by the Opposition for a debate in Government time.

It is perfectly normal to have a general debate on a motion for the Adjournment, and this, of course, will not be the only occasion when the House will have the opportunity to debate this subject ; there will certainly be a debate on a substantive motion when the House considers the Second Reading of the Bill. This is not the only curious and irrelevant charge made by the Opposition Front Bench on the issue : I shall deal with others later.

I welcome the debate because it allows me an opportunity to set out what I believe to be the overwhelming case for the introduction of top-up loans for students to supplement their maintenance grants. It also enables me to report progress to the House following the statement on 19 June by my right hon. Friend the Member for Mole Valley (Mr. Baker), then Secretary of State for Education and Science, and to say something about the next stages of work. I remind the House that the scheme is to apply throughout the United Kingdom. Top-up loans will secure three pre-eminent objectives. First, they will spread the cost of student support more widely. Students themselves will join their parents and the taxpayer in bearing the cost of their support, as they do in all other comparable countries. We believe that--not least given the high taxpayer cost and comparative generosity of our system of student support--it is not unreasonable to say now that students should also make their own contribution.

Mr. Peter L. Pike (Burnley) : Will the Secretary of State give way?

Mr. MacGregor : I will, although I have not yet developed my argument.

Mr. Pike : The Secretary of State has said that students should make a contribution to their education at university. Is it not the case, however, that, as university graduates tend to earn at least 30 per cent. more than other people, they will ultimately pay for their education in any event?

Mr. MacGregor : I shall come to that point in due course. Let me make it clear, however, that we are talking about students making a contribution to their maintenance while at university. Although graduates who are earning more than others may be contributing more in higher rates of tax, that also applies to many non-graduates. It is not unreasonable to expect students to make their own contribution, because higher education benefits not only society as a whole but the individual student.

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Secondly, top-up loans will provide more money for students while they are studying. That is why they will improve access to higher education. I shall return to the question of access in a few minutes.

A third and, in my view, very important point, which has tended to be overlooked in public discussions so far, is that top-up loans will secure changes in student attitudes. They will reduce students' sense of dependency on the state, and will promote a proper sense of self-reliance and responsibility. The most important point, I think, is that students are investing in their own future. Because they are doing so by using what will be, in effect, a part--if only a very small part--of their own money, they will be more inclined to insist that they obtain value for it in their courses.

Mr. Andrew F. Bennett (Denton and Reddish) : Will the Secretary of State give way?

Mr. MacGregor : I will not give way at this stage.

The experience of the countries operating loans schemes brings out the relevance and importance of that last point.

Let me expand on two aspects of the general argument. Taxpayers, the great majority of whom have not received the benefit of higher education and many of whom will throughout their working lives earn less--often a good deal less--than graduates can expect to earn, should not have to shoulder a steadily increasing burden of student maintenance. We also need a fairer share in the balance of the burden between parents and children. Many parents have been bearing an increasing share of the cost of their student children's maintenance, and we know that some parents do not make the full contribution for which they are assessed. When our scheme is fully operational, the parental contribution at all levels on the scale will have fallen by nearly half.

The idea of loans for student support is not new, either as a concept or as a firm proposal. Clearly it is not new in other countries--which are already putting it into practice on a large scale--but it is not new here either. In our manifesto at the last election, we said that top-up loans supplementing grants represented a source of new finance to help students and to relieve pressure on their parents, and we set out our firm proposals in the White Paper of November 1988. It is also worth restating that the Government's plans relate to loans for maintenance--that is, for students' living costs.

Mr. Tony Benn (Chesterfield) : Is the Secretary of State aware that there is a fourth aspect of student loans to which he has not referred? Last Sunday, Price Waterhouse advertised the post of managing director of a student loans company, with a salary of £55, 000 plus bonus and a car, in Glasgow, to be under contract to the Government. The advertisement was drawn to my attention by students at Glasgow university, and, of course, it already anticipates the legislation.

A good deal of money will be made by financial institutions at the expense of students--many of working-class origin--who will depend on top-up loans. That is the pressure and the vested interest behind the scheme.

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Mr. MacGregor : The right hon. Gentleman's last point is absolute nonsense. When I spoke of three pre-eminent objectives, I referred to the overall objectives of the scheme, not the details ; and the right hon. Gentleman has related his question to a very detailed point. I shall say more about that later in my speech, when I come to report on the progress of the scheme.

Let me remind the House of some of the key facts and figures underlying our policy. First there is the question of student numbers. The present awards system was introduced in 1962, when there was no conception of the extraordinary and welcome expansion in higher education that would take place in subsequent decades. I well remember the Anderson report of 1960, as--unlike, I suspect, the hon. Member for Blackburn--I was very much involved in student politics in the years preceding it. I also remember the debate about Robbins. I was therefore also closely involved in the debate leading up to that report.

Anderson, on which the Education Act 1962 was based, envisaged that higher education student numbers might eventually reach some 175,000. This autumn there are over 1 million full-time and part-time students in higher education, and, of those, fully 400,000 are receiving mandatory awards. Their numbers have been growing year by year, and there is every sign that student numbers will be buoyant throughout the 1990s.

Secondly, there is the question of cost. Total expenditure on student maintenance has almost quadrupled in real terms since 1962, rising from £253 million to well over £800 million in constant money figures. But, while total expenditure has increased, the maintenance grant available to the individual student has fallen steadily in real terms. Let me add that that has happened under Governments of both parties. At the same time, the average value of the parental contribution has increased.

The Government's declared policy is to expand access to higher education. When I addressed the Committee of Vice-Chancellors and Principals last month, I looked to roughly a doubling of the number in higher education over the next 25 years, and we are already seeing an increased demand for higher education from those who have the intellectual competence, motivation and maturity to benefit from higher education and who wish to do so.

Mr. Martin Flannery (Sheffield, Hillsborough) : Will the Secretary of State give way?

Mr. MacGregor : I will, but I hope that what the hon. Gentleman is going to say is relevant to the point that I have just made.

Mr. Flannery : The Minister claims that the aim of the Government is to expand higher education. In the Select Committee on Education, Science and Arts we have had to discuss demographic trends because we know that the professions will be competing with each other for a far lower number of 16 to 19-year-olds. That means that it will be difficult to staff the professions, and especially the teaching profession. Far from increasing, the number of young people may fall.

Mr. MacGregor : Obviously, I know about the demographic trends coming through in the early 1990s and, indeed, running through the 1990s. Equally, I know about the demands not just in the professions about which the hon. Gentleman has spoken, but in the economy as a

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whole, for more skilled people. That is why I am so strongly in favour of a policy of expanding higher education. I do not think that I should give way much more, because it is clear that many hon. Members want to speak in the debate. The interjections so far have not been relevant to what I have been saying or have pre-empted what I was about to say.

I was about to say that such an expansion in higher education will be partly driven by economic considera-tions, and it is important for our economic competitiveness that that should happen. Of course, it will have benefits that are cultural and social as well as economic. There is much agreement about the need to expand higher education, and it is also widely accepted--I know by some Opposition Members--that a doubling in student numbers cannot mean a doubling in public expenditure on higher education. A feature of the debate in almost all developed countries is that it is recognised that, with all the pressures on public spending, higher education cannot realistically expect to win a significantly greater share of public spending than it has now.

Student support is a major component in this country of that expenditure. We already spend far more on student maintenance than do other comparable countries. If we are to expand and adequate funds are to be available to students, parents and taxpayers cannot bear the cost alone. Part of the cost must be borne by those who will benefit--the students themselves. Moreover, there can be little doubt about the benefits that individuals receive from higher education. As an Opposition Member has said, in 1985, on average, the male graduate aged between 30 and 39 earned about 30 per cent. more than his non-graduate counterpart.

The analysis set out in the White Paper suggested that the rate of return to society as a whole on its investment in a graduate's higher education, was between 5 and 8 per cent. I have no doubts whatever about the value of that investment, but the benefits to individual graduates are even greater, and the White Paper sets out the analysis. While calculations of this sort have, I know, to be treated with some caution, economists have calculated that the rate of return on the individual graduate's investment in higher education was in the region of 25 per cent. One can argue about the figure, but the principle is clear. That reinforces the legitimacy of arguing that it is only reasonable for the beneficiary to bear part of the cost.

Mr. Andrew F. Bennett : Will the Minister give way?

Mr. MacGregor : No. Many hon. Members wish to speak in the debate and I want them to be able to do so. I have given way three or four times already.

I turn next to the international comparisons that underline the point that in Britain, society as a whole--the taxpayer and students' parents--has been generous in its support for students. The White Paper set out in annex C an impression of the nature of the support regimes in a range of countries. I recognise that international comparisons of this kind give rise to particular statistical problems. There are, for example, differences of definition, and there are problems in attaching value to various hidden subsidies, but with those caveats, I strongly commend to the House the material presented in the White Paper. It makes a powerful case.

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Several points stand out. First, taken as a whole, public expenditure on higher education in the United Kingdom campares favourably with expenditure by our competitors. Secondly, based on the latest up-to-date figures we are nearly top of the league in the proportion of full-time higher education students receiving Government assistance, second only to the Netherlands. Thirdly, fully 20 per cent. of our recurrent expenditure on higher education is devoted to student support, a far higher proportion than is to be found elsewhere. We have the most generous system of support for students in the western world, yet--and this is a very important point in relation to access--in other countries with much less support, demand for admission to higher education is no less buoyant than here ; rather the contrary. One reason is that demand is less constrained by the cost to the public of supporting students' living expenses. Another fact that the international comparisons bring out is that while public funding of students is more generous here than elsewhere, the maximum amount of support available to students from public and private sources combined is in many countries higher than in the United Kingdom. In that combination I am including loan schemes which, in the first instance, are financed by Government. In Denmark, Holland, Norway and Sweden, for example, which also have fairly high proportions of students receiving support as we do here, the maximum sums available under their Government schemes are larger than in the United Kingdom. Those are Government schemes that include loan schemes as well as grants.

The figures for the latest year available show that in 1987 the amounts were about £2,300 in Denmark, £2,500 in Sweden, £2,900 in Holland and £3,600 in Norway, but with a very high emphasis on loan schemes. That compares with £2,040 in England and Wales at that time for students outside London. Yet public expenditure through grants on student support is, as I have already stressed, lower elsewhere. In these countries, students have access to more cash, but the bill for the taxpayer is lower. It is the loan that makes the difference. In addition, those countries are getting the benefit of the different attitudes that a mix of grant and loan brings about. I talked about that earlier. Therefore, we have a higher proportion of our funding going on student maintenance and we are unique in putting such a total focus on grants.

At the same time participation levels in higher education do not reflect the taxpayer's heavy investment in student support. Thus the message of international comparisons is clear. Neither the taxpayer nor the student is getting a good deal. The taxpayer does not see the participation that his investment would lead him to expect and the student does not receive the support available to his counterparts elsewhere. We must spread the load and increase the resources available to students if we are to achieve, as we must, much improved access to higher education.

Mr. Simon Hughes (Southwark and Bermondsey) : The Minister has not said that the Governments of Denmark, Sweden, the Netherlands and West Germany have either implemented or are implementing moves away from loans towards a greater proportion of grants. Can the right hon. Gentleman explain the fact that there is no evidence anywhere to suggest that access is improved by loans rather than grants? The European trend is very much against the Government's proposed direction.

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Mr. MacGregor : There is evidence that access is higher in many other countries. It is also the case that those countries are retaining loan schemes. We are talking about a balance. Under our schemes as set out in the White Paper, it is clear that loans would still play a much smaller part in the overall mix than in most of the other countries about which the hon. Gentleman is talking. Our critics assert that loans will impede access to higher education. I do not think that that will be so. The question of access is important and requires careful thought, not knee-jerk reactions.

First, the way to bring into higher education more students from the groups that are under-represented there at present is to continue to persuade more of them to remain in the education system--in school or in further education--beyond the age of 16. The GCSE and the national curriculum will undoubtedly help many more young people to reach the necessary standards, and this year's A-level results are an encouraging pointer. Once that barrier has been broken for the individual pupil and his or her family, enthusiasm to go on to higher education is much more likely, and I do not think that a top-up loans scheme to support the other funding will at that stage prove to be a barrier.

I say that because, secondly, as I have already outlined, the experience of other countries is that access is not impeded by their use of loans schemes. I suggest that all those interested in this aspect should read annex C of the White Paper, which sets out information on that subject.

Thirdly, financial help can, of course, be helpful. That is why we are increasing, with the top-up loan, the total resources available to students while they are studying. That is why we have devised a loans scheme with generous terms : instead of overdrafts at commercial rates, graduates will have student loans at a real interest rate of zero. This is a much better deal for those students who are currently topping up their maintenance, including those who are not getting full funding of their parental contribution, by taking out loans at what will be full commercial rates of interest. That is why we shall arrange to defer a graduate's repayments if income is low at any time for any reason. And that is why we shall establish the access funds as an additional way to help students for whom access is particularly difficult for financial reasons. Let me make one final point on the so-called disincentive effect of a loans scheme to those contemplating higher education. Future graduates should not be discouraged by the prospect of loan repayments. As I have already shown, most graduates can expect to earn high incomes in their future careers, but some will choose to enter less well-paid occupations, while others will work at home for long or short periods, perhaps raising a family, or will stay at home, not working. Our loans scheme will not penalise such graduates. Repayments will be deferred if a graduate's income is low at any time for any reason.

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