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Baroness Elles: My Lords, I thank the noble Baroness for giving way. Will this exemption apply also to diplomats, in the same way that some of the other exemptions have applied to both service personnel and diplomats? Will it apply in this case?

Baroness Blackstone: My Lords, no. This is specifically for the children of service personnel. Almost without exception, diplomats will get access to the student loan scheme in any case.

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However, the families of the vast majority of British students being educated abroad choose to live and work abroad. Where this is short-term, the temporary absence provisions will meet their needs. Where it represents a decision to make long-term commitments outside this country, the Government believe that they cannot expect the British taxpayer to provide support. That is what would be involved here.

We do not routinely collect information on the number of British nationals who are educated at British schools in the EU. However, we do know that this year about 1,500 British nationals have applied to my department for tuition fee support under the arrangements for EU nationals that I have already mentioned. Some of these applications will have come from pupils from British schools in the EU. If loan support were extended to these students--this answers the question of the noble Baroness, Lady Seccombe--it would cost the taxpayer more than £4.5 million a year. It could also create considerable complications with our European partners, who could, quite reasonably, argue that we were in breach of EU legislation by treating our own nationals more favourably than nationals from other parts of the EU.

As I said, the current rules are both long-standing and clear cut. I have listened to the arguments but I am not sure that there are compelling reasons to change the residence requirements for these applicants. We do not believe that it is right to open up the student loan scheme to people, whether British or not, who have lived and been educated in other parts of the EU. We have therefore decided that the current arrangements for these particular applicants should remain in place.

However, as I explained earlier, if any British national educated at a British school elsewhere in the EU can demonstrate that he or she has a residential connection with the UK and meets the residency criteria, he or she can have access to student loans. That would apply to the grandson of the noble Baroness, Lady Elles. Whether or not he is eligible, I do not know, but I wish him well and I hope that he gets his place.

Baroness Young: My Lords, I thank the noble Baroness for giving way. I listened to what she said with great interest and I shall read very carefully the report of the debate. Although I completely understand and accept the case for the Armed Forces, can the noble Baroness explain to the House why she feels that members of other groups who help the United Kingdom--not, of course, in the same way as does a soldier under military discipline--through business, exports and other entrepreneurial effort, about which we hear so much, should be ranked as members of a kind of second-class category who have merely chosen to go to Europe? Many are sent over by their companies. I do not believe it is quite fair to say that it is purely a matter of choice.

Baroness Blackstone: My Lords, I take the point made by the noble Baroness that there may be some people in this category who are sent to Europe by their companies. However, I believe that such people have

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some choice as to which company they work for. Under normal circumstances, if someone did not wish to move abroad, most companies would prefer to retain a valued member of staff and would allow that person to remain in the United Kingdom. For that reason, I believe that there is a substantial difference between a member of the Armed Forces who can be posted abroad for a long period and who has no choice whatsoever in the matter--a soldier who refuses to serve abroad is subject to court martial--and a member of another group.

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I recognise that the noble Baroness may be a little disappointed with some elements of my response. I shall certainly check again the points that were made in the debate about the way in which LEAs deal with their discretionary powers in this area. I was surprised by the words of the noble Lord, Lord Tope, when he said that LEAs are unhappy with this discretion and with the guidance provided by my department, because this issue has never been raised with us.

        House adjourned at twenty-two minutes past eight o'clock.

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