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Lord Desai: I must apologise that I was not in my place when the amendment was called. However, my noble friend Lady Lockwood has given an eloquent exposition of what the amendment is about.

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If someone is refused a loan early in life, despite what safeguards one may like to put in place, it will block his creditworthiness for the rest of his life. Therefore, it is important that we should have safeguards in the Bill. We are talking about people who will take a loan when they are 18. It will probably be the first loan they have applied for--I hope it will be the first loan they have applied for; I hope that they are not already in debt. We should ensure that if they are refused a loan by one private agent or another it does not happen on grounds which are unconnected with their true creditworthiness. I can understand that for commercial reasons there are people to whom one would not like to give a loan. But there should not be discrimination on grounds which are irrelevant to creditworthiness and irrelevant to their ability to pursue a career.

I know that the Minister does not like the phrase "cherry picking". Indeed, he probably does not like "level playing field" any more. None of us does. However, it is an established point in economics that when these things are done by the market, the market will not take up "difficult" cases. Who are the difficult cases? They are usually people who are known on objective criteria to be the lower paid. They are lower paid on the grounds of race, sex and disability. We want to ensure that people are not refused loans on those grounds.

I know how these loan applications are processed. One is asked to tick certain boxes on the application form. The young clerks--I do not want to be pejorative--who are supposed to feed the information into the computer add up the score. If one has said that one is black, or a woman, or a disabled person, out one goes before anything further has been asked. I recently had a very nice experience of being asked by one of the Labour Party magazines to apply for a credit card. I applied for the credit card but I did not get one because I did not put myself down as a houseowner. I was honest because my wife is the houseowner and so I could not claim to be a houseowner. But I did not get the credit card. If one is not a houseowner, one does not get a loan. Very crude criteria are used by people who think they are scientific criteria. I bet that some of the criteria on which people would not be given loans are those which I have mentioned. It is very important to lay down these requirements in black and white.

I know the Minister will say that legislation already exists to cover these points. However, I have a suspicious mind about some of these matters. If it exists, fine; adding to it will not make any difference. One would not be imposing extra burdens on the loan givers. Therefore, why not do it? It will be a belt and braces approach. We can be extra cautious. Unless we do so, we will be likely to blight people's careers, especially their careers as borrowers, for a long time.

7.15 p.m.

Lord Henley: I understand the anxieties put forward by both the noble Lord, Lord Desai, and the noble Baroness, Lady Lockwood. I was also interested that the noble Lord should tell the Committee in advance what

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I am going to say. But I shall say it, nevertheless. I hope that in so doing I can persuade the Committee that the steps we have taken are sufficient, and that what is in place is sufficient.

The invitation to tender documents that we have heard so much about this evening ask that the financial institutions bidding should provide details of the credit selection policies and processes they intend to follow. We shall consider that information very carefully in evaluating the tenders. The documents also include a model contract. I can assure the Committee that our contract with successful bidders will include a requirement that they do not commit any act of discrimination rendered unlawful by the Sex Discrimination Act 1975, the Race Relations Act 1976 or the Disability Discrimination Act 1995. Further, I believe that the institutions to which we have sent the tender document are responsible organisations. I do not believe they would be guilty of discrimination or guilty of breaching the law as set out in those three Acts. But if they are, they will be in breach of the law and of our contracts.

I believe therefore that effective sanctions exist to deal with the points that have been raised by the noble Lord and by the noble Baroness. Useful though this debate has been, I hope they will accept that the new clause would add nothing to the Bill and that therefore it is not necessary to press it on this occasion.

Baroness Lockwood: The Minister has, unfortunately, responded in the way I expected. I am sorry about that. He clearly has nothing against the new clause. He did not speak against the clause as such. But he felt that it was unnecessary in the light of the arrangements that have already been made. I am grateful to him for the arrangements that have been made. I hope that the scrutiny will be careful.

No one would expect the financial institutions to discriminate. I certainly would not; and, as I said in my opening remarks, I know that they have had experience of the anti-discrimination legislation already operating. Nevertheless, some of those financial institutions, responsible though they are, have on occasions discriminated, and action has had to be taken. Sometimes it has been taken by the Equal Opportunities Commission and there has been an agreed programme of action to eliminate that discrimination. No matter how established a firm may be, there are still dangers, as I said originally, of indirect discrimination.

I am sorry that the Minister will not accept the amendment. It would add to the Bill and be an additional warning to organisations that they must be absolutely sure that there were no provisions likely to affect one sex or disabled people more adversely than others. However, in the light of what the Minister has said, I shall look at the details of the programme which he is suggesting. If I feel that they are satisfactory I shall leave the matter there. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Addington moved Amendment No. 11:


After Clause 1, insert the following new clause--

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Age discrimination

(". No subsidy may be paid by the Secretary of State under section 1(1A) of the Education (Student Loans) Act 1990 unless the Secretary of State is satisfied that the person by whom the private sector student loan will be made has ensured that the assessment criteria to be used in assessing applications by eligible students do not discriminate on grounds of age.").

The noble Lord said: There are two reasons behind this amendment. It is basically to stop age being used as a ground for discrimination. Ageism is a problem that we are facing more and more in our society. I say that with a certain degree of temerity, realising that I am the youngest person involved in this debate. One may be dealing with people who feel that they have missed out on educational prospects. I hope that that is something we shall never lose sight of in the education system. The other factor which I hope will get a better hearing from the Government is updating skills. For both these aspects we are talking about academic training. In the job market one constantly needs to update one's skills or go through new training processes. With the current level of prejudice against people over the age of 50, it is almost vital that one is up to date.

Currently, one cannot obtain funding for university or higher education courses. The current loan system does not give that support. Surely this is an opportunity to bring in this new provision. We need to bring back in to the system large sections of our society which are becoming almost permanently without hope of employment. If we can retrain them to a sufficiently high level of skills, they will surely stand a much better chance. That, combined with the fact that others may fulfil their life potential later on, is a very good reason why this amendment, or something very similar, should be included on the face of the Bill. I beg to move.

Lord Henley: I believe that there are two points here. First, there is the much wider question as to whether loans generally, either through the Student Loans Company or through the new private institutions, should be extended to the over-50s. I do not believe that that is a matter we should be debating this evening. We have discussed it on a number of other occasions. We have no intention of changing our policy in that regard. I am not sure that this amendment would achieve the point anyway. It would be wrong to press amendments to the Bill which might cast doubt on that policy.

Secondly, on the narrower point as to whether the institutions themselves should have anti-ageist policies, we shall obviously consider the policies of the private lenders on assessing applications when considering their tenders. If we have anxieties on that they will be reflected in our decisions. The noble Lord ought to accept that it is not generally unlawful to take decisions based on someone's age. Therefore, there is absolutely no case for seeking to regulate the private lenders on this occasion as if there were. Therefore, I hope that the noble Lord will feel that it is not necessary to press this amendment on this occasion.

Lord Addington: Although it may not be unlawful to discriminate on the ground of age, I cannot help but feel that at times it should be. I was also trying to introduce a provision to correct a major flaw in the current legislation

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and arrangements. The reasoning behind the amendment was to correct a fault of omission. But the hour is late and I do not believe that I have many allies to my left on this issue.


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