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Lord Morris of Castle Morris: My Lords, I am grateful to the Minister for his reply. He referred once again to the 1990 Act and said that the time taken to repay can be varied by that Act. He has said that before, and I agree with him; it could. Why then is it not varied? Here is an opportunity. Why does the Minister not take that opportunity? The least that I should like him to do this evening is to accept the principle that an income-contingent loan is better than the mortgage repayment scheme and to take away the idea and think about it hard. I ask him to consult the officials who advise him so well and come back on Third Reading with further and better particulars and a better idea than the one we have at present.

The Minister asked me what we should do. My answer is the regular one, that we should not be here in the first place. We should not have got ourselves into this fix. If we had been discussing the matter of loans over a period of years, we should not have found ourselves in the position in which the student bodies are entirely against us and where there does not seem to be a bank, building society, finance house or even Shylock the moneylender who will take us seriously and come to our aid.

Repayments could be over a longer period. This is something that we would certainly want to discuss with student bodies and with the Committee of Vice Chancellors and Principals. I notice that the Minister has still not said anything whatever about the virtue of long-term loans versus short-term loans; I can only conclude that it is something he is determined not to have anything to do with. Our point is that a student should be given a choice about the kind of repayment structure he prefers. That is what we would build into any plans we might have for student loans if it appeals to us, and if and when--and especially when, and may

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it be soon--we come into power. I hope that that will convince the Minister that we on these Benches certainly take the matter extremely seriously and that we have our plans which I am not prepared to divulge in detail at this stage, or over this Dispatch Box, as he will readily understand. He can look forward, concealing his curiosity and his impatience as best he can, to reading what is put forward on these matters by my noble friends and my right honourable friend in the Labour Party's manifesto for the next general election which cannot come too soon. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Morris of Castle Morris moved Amendment No. 11:

Page 3, line 30, leave out from ("above") to ("steps") in line 32 and insert ("shall include provision for defraying in full expenses incurred by institutions at which eligible students are attending courses in respect of").

The noble Lord said: My Lords, I, or we, or all of us, got into a state of mild confusion about this amendment at Committee stage, for which I apologise. I have returned to the matter with the Committee of Vice-Chancellors and Principals between then and now and I hope that I have the facts correctly listed. My understanding is that as originally drafted there was no provision in the Bill for the reimbursement of universities' costs in processing the new private sector loans. In response to CVCP pressure a government amendment was tabled at Committee stage which allowed reimbursement of universities' costs in processing both public and private student loans. That, so far as it went, was welcome.

The amendment before us is designed to ensure that universities are fully reimbursed. Under the existing public sector scheme universities are only partially recompensed for processing loans. The point was powerfully put by the noble Baroness, Lady Park of Monmouth, whom I seem to be complimenting all through the proceedings this evening. However, she seemed to me to make such splendid contributions at Committee stage that I cannot resist doing so. Universities want the duty to reimburse them in full to cover the full costs of processing loans made mandatory rather than permissive. Universities would like to see the Bill amended so that there is, first, a firm duty to meet administration costs and, secondly, an agreement that those costs have to be met in full.

Universities are subsidising the Student Loans Company at present to the tune of some £2 million. As we know from the debate that we had on the capital funding of universities and the cut made in it last year, universities are in no position to do this, and there is no reason why they should. It is entirely unjust and unfair that universities, out of money which comes to them from the Treasury, should be handing money back to the Treasury to do something which the Treasury has compelled them to do in the first place. This is economics gone crazy. They should not have to subsidise private sector financial institutions at all. In

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their current financial state they simply cannot afford to do so. It would be absolutely the last straw. I beg to move.

Lord Henley: My Lords, the amendment would require the Secretary of State to meet the full administrative costs of the higher education institutions which are responsible for the certification of eligibility for student loans. However, the duty to reimburse an institution for expenses incurred would not allow for the payment of a fixed fee which might well exceed the level of a purely compensatory payment. Institutions would also need to justify their claim for expenses, particularly in the manner proposed in the amendment. The system which the provision in the Bill is designed to preserve is potentially more generous than the one proposed by the amendment.

However, I understand the noble Lord's concern. It was one raised in another place and one which gave rise to government amendments which were accepted during Committee stage. We made clear that it is our intention that higher education institutions should be paid for the work they do certifying eligibility for both public sector and private sector loans. The level of the current fee for the certification of eligibility is a matter for the higher education institutions and the Student Loans Company to determine. It is for the higher education institutions to put their case forward if they think the fee they receive is not sufficient. The HEIs' role in relation to public sector loans will not change; they will continue to be reimbursed by the Student Loans Company. I see no reason to change the fee setting arrangements. I believe that the arrangements ensure a good deal for the taxpayer and a quality service for students.

As far as private sector loans are concerned, it is our intention that higher education institutions should agree with private lenders the terms and fees of any certification work they do. However, we hope that most applications will be handled without specific reference to the higher education institutions. This will mean that the Bill does not create any additional work for them; indeed we expect their workload to decrease. Where such work is required by regulation, we shall ensure that the regulations provide for the payment of fees. That was the reason behind the amendments I brought forward at Committee stage. I believe that these arrangements will complement and enhance the current arrangements for the determination of fees and will ensure that the loans scheme continues to deliver a good deal for both students and the taxpayer.

Lord Morris of Castle Morris: My Lords, before the noble Lord sits down, I am delighted by part of what he said. He said at the very end that where private sector loans involved higher education institutions the latter would receive payment of fees. Does that mean full payment of fees?

Lord Henley: My Lords, as I made clear, the amendment proposed by the noble Lord is defective in the way it refers to expenses. That would create more trouble for the institutions because they would have to itemise the expenses and then justify them. We believe that a fee system is much better. Under the arrangements

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for the Student Loans Company it is for the higher education institutions and the SLC to negotiate an appropriate level of fees. Where fees are necessary in relation to the private sector, we believe that regulations will be the appropriate way to provide for payment of fees. Fees are the better way forward rather than expenses, which is what the noble Lord's amendment is asking for if he can accept the distinction between the two. Expenses would create a major problem for the higher education institutions, and one I think they would come to regret.

Lord Morris of Castle Morris: My Lords, I am grateful to the noble Lord. The distinction between expenses and fees is one which I shall have to consider, but in so far as the payment of fees means the full payment of fees I am content with what he said which seems to be more or less "yes", or at least a categorical "may be". It is important that we should be as clear as possible and as we are juggling several terms together I reserve the right to come back to the matter at Third Reading when I have read our exchanges carefully in the cold light of dawn. It is rather wet in the Derbyshire Peak District at the moment. I need to be satisfied on this point. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Trusts of Land and Appointment of Trustees Bill [H.L.]

7 p.m.

The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.--(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Lockwood) in the Chair.]

Clauses 1 to 5 agreed to.

Clause 6 [General powers of trustees]:

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