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Sale of Student Loans Bill

Volume 478: debated on Monday 23 June 2008

Lords amendments considered.

I must draw the House’s attention to the fact that privilege is involved in Lords amendments Nos. 2, 3 and 15. If the House agrees to these amendments, I shall ensure that the appropriate entry is made in the Journal.

Clause 1

Sale of student loans

Lords amendment: No. 1.

With this, it will be convenient to consider Lords amendments Nos. 4 to 6, 8 and amendment (a) thereto, 9 and 10.

Before I start on the detail of the amendments, I should like to place on record my appreciation of the constructive way in which hon. Members have contributed to the development of the Bill. Opposition Members will recognise among the amendments topics that we first discussed in this House, on which further debate followed in another place. The positive engagement across all parties in both Houses, but particularly between the two Front Benches, has helped fundamentally to improve the Bill, which meets our shared aim of providing an effective framework for a continuing programme of loan sales and offering full protection for borrowers.

May I take this opportunity, even though it is very early in the Minister’s speech, to pay him the compliment of saying that he has dealt with these matters with great professionalism? I am grateful for his kind remarks, but they are also due vice-versa. I entirely endorse his view that the Bill has been improved by that engagement.

I thank the hon. Gentleman. One can always sense when constructive engagement has taken place because the Back Benches are empty on both sides of the House, which is what we see today.

I should like to proceed by commenting on the first group of Lords amendments, which relates to the effect of the sale on borrowers. Lords amendments Nos. 1 and 4 cover the notification of sales to borrowers and, as I underlined in Committee, we have always intended to let borrowers know when their loan has been sold. Having listened to the arguments, we have strengthened that intention—in Lords amendment No. 1—into an obligation for the Secretary of State to take reasonable steps to let all affected borrowers know within three months that their loan has been sold.

Lords amendment No. 4 would mean that, in the unlikely event of an onward sale of the legal title to the loans, the initial loan purchaser would be obliged to take reasonable steps to let the borrower know that their loan had been sold on. Lords amendment No. 5 also relates to onward sales. As I said in earlier stages of these proceedings, the borrower’s primary protection in the sales programme lies in the fact that purchasers cannot change the repayment terms, which remain governed by regulations. That is an important protection, but we want the added safeguard that the Secretary of State can enforce any protections contained in the sales contract, including after any onward sale, however unlikely that might be.

The Bill has from the outset enabled the Secretary of State to insist on being a party in some form or other to onward transfers. Having listened to the arguments put by hon. Members here and in the other place, we have made it a requirement in amendment No. 5 for the Secretary of State to ensure in the initial sales contract that he is party to any subsequent contract transferring legal title to the loans.

Amendment No. 6 clarifies how the Bill addresses onward sales, putting it beyond doubt that the provisions of clause 3 relate only to the transfer of legal title of the loans. Without that clarification, potential purchasers and investors may be deterred from participating in loan sales in the mistaken belief that the Secretary of State will need to be a party to all transfers and the onward transfer of equitable rights that can take place in the context of a securitisation. That has never been our intention. Seeking to regulate this division of equitable interests would be unnecessary and unworkable, given the complexity of the structures. Only the legal owner has a relationship with the borrower and the student finance system as servicer, so the Secretary of State only needs to be able to regulate the legal owner’s dealings with the loans.

Amendments Nos. 8 and 9 will mean that, when making or amending the loan regulations or regulations under section 186 of the Education Act 2002, the Secretary of State must seek to ensure that borrowers will not as a consequence of the amendments be in a worse position simply because their loan has been sold. This provision will apply to all changes in regulations after any loans have been sold, not just where an undertaking may have been made. That represents a strengthening of the statement already made on the record that borrowers will not be adversely affected by their loan being sold. It will, I believe, give borrowers confidence that the commitment is intended to stand the test of time.

Finally, amendment No. 10 is a minor drafting improvement, expanding a cross-reference in clause 5(4) into a reference to the whole of clause 2 rather than just clause 2(2). That will indicate more clearly that the transfer arrangements in general may provide for exceptions to the presumption that all moneys relating to sold loans should be paid to the purchaser. Such an exemption could cover, for example, penalties relating to compliance with the tax system.

I am also aware of the Opposition amendment to Lords amendment No. 8, tabled by the hon. Member for South Holland and The Deepings (Mr. Hayes). I know that the Opposition wish to speak to that amendment, so I will respond to what is said about that later.

Overall, the amendments in the group represent valuable strengthening and clarification of how we will ensure that the borrowers’ interests in the loan sale programme are protected. On that basis, I commend the amendments to the House.

It seems quite a long time ago that we were last here debating this Bill. In fact, it was last January. It was such a long time ago that my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) has advanced another year—in fact, he does so today, so I hope that everyone will join me in wishing him a very happy birthday.

The long time for which the Bill has been in the other place seems to have been extremely well spent, as it appears that there is much for us to agree on today. I think that we can largely welcome what is before us, although, as would be expected of a diligent Opposition, we will wish to explore a few issues in further detail. I hope that I will not detain you for too long, Mr. Deputy Speaker; after all, lengthy periods of detention are Government policy, not Opposition policy, are they not?

Let me deal first with Lords amendments Nos. 1 and 4 together. They were proposed in response to another amendment tabled in the other place by Baroness Sharp. In moving Government amendment No. 1, Baroness Morgan said that it had

“always been our clear intention to let borrowers know when their loans are sold. Having reflected on the argument that it would be better to strengthen that intention into an obligation, we propose Amendment No. 1. The Secretary of State would have to take reasonable steps to let all affected borrowers know that their loans have been sold within three months of the transaction.”—[Official Report, House of Lords, 2 June 2008; Vol. 707, c. 47.]

Conservative Members have raised these matters on several occasions, so it would be extremely churlish of us not to welcome these amendments. They build the Government’s intention to inform borrowers directly into the Bill, exactly where it should be, and they also give the purchasers of the loan an obligation to do the same. Letting those affected by changes know within three months is appropriate and welcome. However, it would be extremely helpful if the Minister clarified what will constitute “reasonable steps” in those circumstances, both for the Government and indeed for the loan purchasers.

As the explanatory notes state, amendment No. 5

“would oblige the Secretary of State to ensure that initial sale contracts contain provision for the Secretary of State to be party to any onward sale contract.”

Conservative Members particularly welcome that concession by the Government. The Minister will acknowledge that it follows considerable pressure from us, not least from my hon. Friend the Member for South Holland and The Deepings, who referred to those matters in his opening remarks. Following debate on Second Reading and in Committee about onward sales, Conservative Members tabled an amendment on Report that would have ensured that the Secretary of State would indeed have to be party to onward sales. A similar amendment was tabled by the hon. Member for Hayes and Harlington (John McDonnell).

As my hon. Friend the Member for South Holland and The Deepings said during the debate back in January:

“There are legitimate concerns about collateralised debt…History has taught us that loans can easily be repackaged and, in the end, involve a large number of different purchasers, some of whom, if they are known at all, could be outside the jurisdiction of the Secretary of State.”

The logic of such wisdom from my hon. Friend was so powerful that obviously the Minister could not resist.

Although the Minister expressed the need for flexibility in those matters, he conceded that if an amendment tabled in the other place could be worded in such a way as to ensure that the Secretary of State was party to any onward sale, while maintaining flexibility as to the specific mechanism,

“we would certainly consider it.” .”—[Official Report, 23 January 2008; Vol. 470, c. 1558, 1570.]

The Minister has been as good as his word and has confirmed that today, so we are satisfied that this is an appropriate concession that fulfils our expectations.

The explanatory notes make it clear, as the Minister did in his opening remarks, that amendment No. 6 is essentially a technical measure. I therefore do not propose to dwell on it and shall move directly to amendment No. 8. I will also speak to amendment No. 9, and to the amendment in the name of my hon. Friend the Member for South Holland and The Deepings.

Let me be frank: our amendment is probing and it aims to tease out a little more reassurance from the Minister. We would like further explanation on the record about how those loans might end up in circumstances in which a particular loan structure changed. The explanatory notes state:

“Lords Amendments 8 and 9 would require the Secretary of State to give consideration to borrowers whose loans have been sold in making or amending loan regulations, and in making or amending regulations under section 186 of the Education Act 2002, so as to”—

this is the important bit—

“avoid detriment to any such borrower resulting solely from the fact that the loan is sold.”

Essentially, the Secretary of State must make a comparison to ascertain whether a borrower is worse off as a result of any proposed amendment to regulations. That must be compared with no change at all—that is, with what would have been the situation if the loan had never been sold.

Lords amendment No. 8 is specifically concerned with the financial impact on borrowers, about which Conservative Members have expressed unease during previous debates. The Minister said on the record, early on in the process of considering the Bill, that the Government

“want to be able to demonstrate, and for the reality to be, that a graduate repaying their loan finance will see not one iota of difference in the way in which that process is handled, whether their debt is owned by the Government or by the private sector.”––[Official Report, Sale of Student Loans Public Bill Committee, 4 December 2007; c. 14, Q33.]

Conservative Members—and those with loans, watching avidly on BBC Parliament— will welcome that statement, which is to be commended.

However, Lords amendment No. 8 was tabled in response to concerns that Lords amendment No. 2 to clause 2 might leave borrowers worse off. In moving the amendment in the Lords, Baroness Morgan stated:

“No borrower will be in a worse position for their loan having been sold and, in developing the amendment on undertakings, we have reflected on the importance of borrowers being fully reassured on that fact. That is why Amendment No. 6”—

as it was numbered in the other place—

“will mean that, when amending the regulations, the Secretary of State must seek to ensure that borrowers will not be in a worse position as a consequence of their loan being sold.”—[Official Report, House of Lords, 2 June 2008; Vol. 702, c. 54.]

We welcome the amendment and the noble Baroness’s comments, but we have some concerns about the effectiveness of her assurance, and that of the Minister, to borrowers.

In particular, we are concerned about the wording of the amendment, which does not appear to be as strong as it could be. Our amendment would give further certainty by leaving out the words “aim to”. We are uncertain what the Secretary of State would achieve by “aiming to” ensure that no borrower whose loan was transferred would be in a worse position. I would appreciate some clarification from the Minister on what exactly is meant by “aim to”. Would it, for example, be possible under the amendment for borrowers to be objectively worse off, so long as the Secretary of State had aimed to prevent that? Having read the certainty in the Minister’s words, and in those of the noble Baroness in the other place, I notice that Lords amendment No. 8 does not give the same level of reassurance and commitment. Why not? Will the Minister explain fully to the House why that was not possible?

I am also keen to learn the legal status of the current wording. What has the Minister been advised about the steps that would have to be taken to ensure that he had fulfilled his duty under the amendment? What advice has he been given about the possible legal interpretation of the amendment if a transfer were subject to judicial review? By removing the words “aim to”, our amendment would give a copper-bottomed guarantee to borrowers that they would not be worse off as a result of their loan being transferred.

Our main concern is for those who hold loans. We want to ensure that the exercise has no detrimental impact on them whatever. I urge the Minister to consider our amendment carefully and to fulfil his and the wider Government’s earlier reassurances to the House.

Finally, on amendment No. 10 to clause 5, the Government have conceded that the original wording in the Bill was not as clear as it should have been. As Baroness Morgan stated in her letter to Baroness Verma, dated 4 April, the amendment clarifies what the Government had always originally intended, and is “a minor drafting change”. That implies that the matter does not need much debate. But will the Minister put it on record that the provision is what the Government always intended, and that it is indeed “a minor drafting change”?

As the Minister has agreed, there is no doubt that the Bill has been much improved by Her Majesty’s Opposition’s thorough inspection and the Lords amendments. Therefore, I thank the Minister and his colleagues for the professional and constructive way in which they have engaged with us.

May I associate myself with the outbreak of friendly relations between the Government and Conservative Front Benches? All our debates on Department for Innovation, Universities and Skills matters, whether on this Bill, in Question Time or on the speaking circuit outside the Chamber, are conducted in a friendly and well-informed manner.

I welcome Lords amendment No. 1, which was tabled in response to an amendment moved by my colleague Baroness Sharp of Guildford in another place, calling for the borrowers to be included among those who are notified of the change of circumstances and the accompanying information, about which the House will be informed, once a sale has taken place, and for that notification to take place within three months.

Lords amendments Nos. 4, 5 and 6 concern further transfers and onward sales, and stipulate that the Secretary of State should be a party to them to ensure that the Treasury’s interests are safeguarded. They also clarify the fact that the onward sales are of the legal title rather than equitable interest resulting from, for instance, securitisation.

Let me raise again an issue that was raised by me and by others back in January, on Report. I assume that in all these cases the agency that will issue the various notifications on behalf of the Secretary of State will be the Student Loans Company. I do not think we want the borrower to receive multiple notifications about different aspects of his or her accumulated debt from different agencies such as the purchaser of the debt, the Department, the Student Loans Company and, indeed, Her Majesty’s Revenue and Customs. I should welcome the Minister’s comments on how it can be made clear to borrowers what has happened to their loans on graduation.

An audit trail will be necessary. The position could become quite convoluted over time as debts are sold and resold. Good records are important, not just for the borrower but for everyone.

I agree that it is important to have accurate records—and also for them not to be lost by anyone. However, we do not want a large number of agencies to have to keep accurate records of the addresses, income and circumstances of borrowers. Once young people graduate and their incomes start rising, they tend to move about a good deal. Certainly that was my experience after I graduated. Retaining the Student Loans Company as the primary agency to continue the relationship with the borrower seems to me to make good sense.

As for Lords amendments Nos. 8, 9 and 10, I was puzzled by the insertion of the phrase “aim to” by the Government, or their draftsmen, in the clause that deals with ensuring that the borrower is not put in an adverse position once his or her debt has been sold on. I am sure that such clauses are always carefully drafted on the basis of good advice from Treasury or other Government draftsmen. No doubt there is a good reason for the Government to “aim to ensure” that graduates are not put in an adverse financial position, rather than to ensure that they are not.

That leads me to wonder how the sales of the debts are selected. I had thought that there would be blocks of debt rather than individual debts. Might not the debt being sold turn out to be that of graduates with a good record of repayments rather than those with a patchier record? I do not think we want to find ourselves in a Northern Rock-like position in which the good debt is privatised and the no-so-good debt remains on the Government’s books.

I suspect that that is exactly what will happen. The debts of those with a secure record of repayment will be by far the most appropriate to sell first, because they will be the most attractive.

I am glad we agree on that.

The insertion of the phrase “aim to” suggests that the Government cannot be sure that they can determine whether borrowers will be adversely affected by either the sale of their individual debt or their inclusion in a block of debt that has been sold. It implies that they cannot be too precise about the conditions. I think that the hon. Member for South Holland and The Deepings (Mr. Hayes) was right to probe the intention of the insertion of the words “aim to”, and I look forward to hearing the Minister’s justification of it.

We have had a constructive debate. First, let me confirm that the proposition in Lords amendment No. 10 was always the Government’s intention, and that this is a minor drafting amendment. We have throughout the passage of the Bill also made clear our current intention that the Student Loans Company will take on the responsibility of the ongoing relationship with the borrower, and that it will take the “reasonable steps” to inform all affected borrowers on behalf of the Secretary of State. On the point about the importance of clarity in that relationship, and the need not to create a multiple set of relationships, we need to be clear that the SLC will carry out that function, and that we do not expect onward sales to take place. Under amendment No. 4, there is the further proposition that the initial loan purchaser will also be obliged to “take reasonable steps” to let borrowers know that their loan has been sold. That is there as a belt-and-braces response, but I do not envisage that way forward as ever being necessary.

The hon. Member for Reading, East (Mr. Wilson) asked what is meant by taking “reasonable steps”. We would expect a letter to be written to each affected borrower at the current address held by the SLC. That is an appropriate response because, importantly, borrowers are under an obligation to keep the SLC informed of their up-to-date address—a fact that is relevant to a point made by the hon. Member for Bristol, West (Stephen Williams).

What is the Minister’s assessment of the current state of the SLC database? For how many borrowers is it sure that it holds an accurate and up-to-date address?

I cannot give an off-the-cuff response, but the hon. Gentleman has asked me several written parliamentary questions on this subject, and if he looks at the record he will see that we are getting substantial income flows to the SLC, and we would not be doing so unless we had a good set of addresses for graduates who have gone through the system. I hope that reassures him.

I seek the reassurance that there will be no cross-checking of graduates’ addresses through Her Majesty’s Revenue and Customs.

There are very clear arrangements for the transfer of data between the SLC and HMRC, which I set out in detail in Committee; significant reassurance was given on that issue then, and I reiterate it here.

Let me now turn to the amendment tabled by the hon. Member for South Holland and The Deepings (Mr. Hayes) to Lords amendment No. 8. As I have said, throughout the passage of the Bill it has been a key Government commitment that the borrower will not be disadvantaged as a result of any sale. It must be appreciated that we are dealing with a complex and technical regime that interacts with the tax system, and where there are a large number of moving parts there may occasionally be unintended consequences, which we would, of course, seek to rectify as soon as we became aware of them. Given that set of circumstances, it would be wrong to render changes unlawful because of a possible minor or technical infringement that it had been impossible to predict. I want to stress that amendment No. 8 does not give Ministers scope to weaken their commitment to the borrower. Under the duty it puts in place, no Minister could knowingly make an amendment to the regulations to the detriment of a borrower whose loan had been sold.

Is the Minister saying that there will be compensation from Government funds if the borrower is inadvertently worse off?

If there is a technical infringement that puts the borrower in a worse position, the Government will have to respond; in those circumstances, they will have to make clear their commitment to borrowers. However, the key point is that under the duty this amendment puts in place, no Minister could knowingly amend the regulations to the detriment of a borrower whose loan had been sold.

Let me now turn to the purpose of the wording.

I shall intervene before the hon. Gentleman moves on, as he might want to amend what he is about to say. It seems to me that the argument he is developing is that the obligation will be to ensure that the Government’s intent was appropriate. What we are concerned about is the outcome. The intent might well be appropriate but if the outcome was detrimental to borrowers, the Government’s intentions would not be of much comfort, would they?

In those circumstances, the Government would have to respond very quickly and put that right. In dealing with this amendment, I asked officials to envisage for me the circumstances that might pertain in such a situation. We find it very difficult to envisage such a situation and to identify the problems that might occur. However, this is a belt-and-braces response that makes it clear that there would be a responsibility on the Government, in those unforeseen circumstances, to put the situation right, but the purpose of the wording is simply to ensure that if any unintended consequence of an amendment to regulations had such an effect, the repayment regime would remain lawful pending correction of the unintended error, which would clearly be a responsibility for Government. Otherwise, there is a risk of potentially important aspects of the intended and proper repayment regime being rendered unlawful because of minor errors. That would not be in anyone’s interests.

Although the Government’s commitment to the borrower is clear, in this context, we consider the proposed amendment to the amendment to be too inflexible to work. Having listened to the concerns expressed, and responded on the parliamentary record to them, I now hope that the Opposition will not press their amendment.

Lords amendment agreed to.

Clause 2

Sales: supplemental

Lords amendment: No. 2.

With this it will be convenient to consider Lords amendment No. 3, Lords amendment No. 7, amendment (a) thereto, and Lords amendments Nos. 11 to 16.

Perhaps I might start by again echoing the spirit evoked by the hon. Member for Bristol, West (Stephen Williams), who leads for the Liberal Democrats, and indeed by the Minister: a determination to ensure that the Bill does what it is supposed to, but, equally, to proceed in a spirit of co-operation wherever possible. I will not say collaboration, but there certainly should be co-operation—and to that end, both in this place and the other place, the official Opposition have done their best to improve the Bill.

It is in that spirit that I speak to the amendment that stands in my name, and that represents the Opposition’s position on Lords amendment No. 2, which was introduced by the Government. It was a significant addition to the Bill and is therefore worthy of detailed scrutiny here. By its nature, it has not been discussed here until now, and I think we might say unusually so. Although it is of course the Government’s privilege—indeed right—to move amendments in the Lords, to do so in such a fundamental way is unusual; I say no more than that.

The amendment that we are seeking to amend is about transfer arrangements, particularly undertakings by the Secretary of State about the power to make loan regulations. As you will see, Mr. Deputy Speaker, the amendment goes into some particulars, although I will not discuss them exhaustively. Our amendment is designed to leave out paragraph (a) of the Government amendment that speeds its way here from the Lords, because the powers granted by that amendment are very permissive and wide-ranging. I shall detail the explanatory notes, if I might, Mr. Deputy Speaker, because it is important:

“Lords Amendment 2 would enable the Secretary of State to include in the sales contract with a purchaser undertakings about the exercise of the power to make loan regulations (which include terms and conditions of student loans). Such amendments to the loan regulations would have effect in relation to sold and unsold loans. The intention of the amendment is to reduce the uncertainty about changes which the Secretary of State could make to the terms and conditions of the loans.”

The question of certainty—to whom, and about what—is of great importance when considering the amendment, which has already been subject to considerable debate in the Lords. Members present will have read with some care the record of that debate, but what they may not have been privy to is some of the correspondence surrounding this matter. In a letter to Baroness Vermer dated 4 April, Baroness Morgan, who leads for the Government in the Lords on these matters, indicated that the amendment was principally about value for money. Following discussions with the Government’s adviser on the loan book sale, Deutsche Bank, she argues that it has become necessary for the Government to think again about the precise nature of the likely sale and its circumstances. She says in the letter:

“Because we are legislating for a long-term programme of sales”—

the Minister, indeed all the Government Front Benchers, have made it clear that this is enabling legislation, and we understand that these sales may take place over a considerable period—

“and want to ensure sales achieve good value for money we think we ought to have at our disposal more than one way in which investors can be given confidence that a change in the terms and conditions of repaying the loans will not affect the value of the asset they have bought.”

Let me put that into rather clearer terms for the benefit of the House and, indeed, the record. The gist of it is this. If potential purchasers of part of the loan book were able to suggest that they were buying an unquantified risk, they might well drive the price down, and they might do so in circumstances in which they felt that the Secretary of State could change the loan terms, even though they had bought the product. It is perfectly acceptable for the Government to say, following advice, that that would make the whole process untenable, and that a potential purchaser would—if I may put it in the terms sometimes used in these circumstances—have the Government’s hand twisted up behind their collective back. No salesman wants to be in that situation, and in these terms the Minister is indeed the salesman for the Government, trying to sell the loan book at the best possible price. That is certainly in the interest of taxpayers.

However, having made the judgment that that was perfectly arguable and would justify the kind of amendment that the Government have tabled, Ministers indicated in subsequent discussions in the Lords that the reason for their amendment was rather different. They actually indicated that the amendment concerns the uncertain status of the loan book after sale and whether it would be counted as sold by the Office for National Statistics. In other words, on the one hand we were being told that this is a necessary change to facilitate the best commercial relationship with potential purchasers—to secure the best deal, if I might put it that way—and on the other, we were being told that it is a technical requirement to ensure that the asset had been shifted, so far as the ONS was concerned, from the public to the private sector. In the Lords Committee debate, Baroness Morgan stated:

“We do not want to put future Governments in a position where the only means they have to address the issue of future policy change became something that, under future rules, led to the transaction not counting as a true sale. We know that this is a real risk, as the classification rules have changed significantly since the previous sales of student loans a decade ago and we would not now be able to sell student loans in the way we did then.”—[Official Report, House of Lords, 8 May 2008; Vol. 701, c. 192.]

So I think it fair to say that there is some confusion about the advice that Ministers received from the sales arranger, their adviser Deutsche Bank. Did that advice also concern whether a transaction would count as a true sale or was there separate advice from a separate source that sponsored—encouraged—the Government to construct and propose their amendment? Was the advice only about value for money, an issue to which I shall return in relation to Lords amendment No. 7?

The fact that the sales arranger thought it possible that the terms of the sale needed to be revised raises some questions, particularly in the current financial climate, about whether a good value deal can be secured, especially for the first sale. The essence of my point is to discover which is the more important to the Government: is it, as we have now been led to understand, the technical change that they claim that they have to make to satisfy the ONS—that position is perfectly feasible and supportable—or is it, as we were first led to believe, that the Government fear that they will not be able to sell the loan book, in part or as a whole, at an attractive price unless they make the product altogether more agreeable from the perspective of potential purchasers? If that is the reason driving the Government, the spectre—I do not want to be alarmist in any way, because that is not in my character—of the loan book being sold off at a price that would not be in taxpayers’ interests, at a time that would not be optimal and in a fashion that would not be agreeable to this House or to those whom we represent begins to hover over our otherwise agreeable proceedings.

That explains the reason for our amendment (a). Discussions have taken place on the Floor of the House, in Committee, in the Lords and privately about these matters, but we felt it important to put our concerns on the record in the form of our amendment. Concern was expressed in the Lords about the permissive nature of the Government’s amendment, and I have made reference to that. Our amendment (a) would enable the Minister to give undertakings that are enforceable in law and that bind the hands of his successors. It would enable Ministers not only to give undertakings that the loan regulations will not be changed, but to give undertakings so as to achieve a specific result. Our amendment (a) proposes to remove paragraph (a) from Lord amendment No. 2, but it is essentially a probing amendment, which doubtless comes as a relief to Ministers. It aims to ascertain what undertakings may be made by Ministers in this regard. Could the undertakings have an impact on the threshold for loan repayments or the interest rate for repayments?

My principal concern is, as it has been throughout these proceedings, not only for recipients of student loans, but for taxpayers. We must ensure that we secure best value for money as this asset moves from the public to the private sector.

There are two ways of securing a more attractive selling price. The first is legitimate: the Government should say that they are not going to intervene in an unhelpful way and give as much certainty as possible to the potential purchasers. I think that that is what they are trying to do, and I am interested in hearing my hon. Friend develop the argument. What would be unacceptable to this House is if the other way were adopted. That would involve allowing the buyers to up the amount of money that they take off the students. The Government are desperately trying to balance those matters, so I would be intrigued to learn whether my hon. Friend has had the benefit of any advice from those acting for the potential vendor as to how one maximises the price within those constraints.

The tension between those two imperatives lies at the heart of the matter. I do not wish to complicate our considerations, but may I also add a third: that the Government are obliged to deal with these things rather more hurriedly than they or the House would wish? They have made it clear—Ministers have been straightforward about this—that they need to sell the loan book pretty quickly, because they factored income from that sale into their spending plans.

My right hon. Friend will know, given his extensive business and City experience, that it is not always wise to sell something at an inappropriate time and it is not always—perhaps never—wise to let potential purchasers know that one is going to do so. That drives the price down, because they then say that the Government have to sell, because if they do not, they will be short of brass. That is what this boils down to. We have a fear about the Lords amendment, so our probing amendment— I reassure the Minister about its nature—aims to ensure that he has the opportunity to clarify, on the record, the nature of the sale that will doubtless ensue as a result of this enabling legislation. My right hon. Friend is right to say that the interests of borrowers and taxpayers have been at the heart of our considerations. We would complain bitterly if, after this period of friendly co-operation, the Government used this legislation at the wrong time and got a lousy deal. If we did not complain in such circumstances, we would not be doing our duty to this House or to taxpayers.

There is a danger that the Government’s Lords amendment will transfer any uncertainty about future repayment terms from potential purchasers of the loan book to borrowers. That would not be a satisfactory outcome. The additional permissiveness at the heart of the amendment may be warranted, but at the very least, we need to know what the Government are thinking, why they are thinking it and who has advised them. I know that the Minister will be anxious to clarify his and the Government’s position at the earliest opportunity.

On Lords amendment No. 3, I should point out that the explanatory notes state:

“Lords Amendment 3 would ensure that the scope of undertakings given by the Secretary of State could extend to regulations under section 186 of the Education Act 2002, as well as to the loan regulations under section 22 of the Teaching and Higher Education Act 1998. Under section 186 of the 2002 Act, the Secretary of State may make regulations enabling the Secretary of State to make repayments on behalf of borrowers, or to reduce or extinguish the amounts owing by them. The amendment would allow the Secretary of State to make binding promises about how this power would or not be exercised.”

Lords amendment No. 7 would insert a new clause into the Bill. I ought to say at this juncture that I am extremely grateful to the Minister for accepting the representations made to him on this subject. The new clause deals with the kind of reporting that would take place after transfer arrangements have occurred. In essence, the Government are saying that parliamentary scrutiny, which we all want in place, will be ensured by a report, brought to this House, on the arrangements pertaining to the sale. The amendment states:

“The report must include information about the extent to which the arrangements give good value”

—for money.

We have been so insistent about this matter for the reason that I mentioned a few moments ago in response to the intervention made by my right hon. Friend the Member for Wokingham (Mr. Redwood): the fact that it is crucial that we obtain good value for money and, moreover, that this House is able to test that in an empirical way. The House deserves proper information about where a sale was made, how it was made, why it was made at a particular time, the prevailing market conditions and so on.

Has my hon. Friend put it to the Minister that selling a book of loans in the middle of a credit crunch is not the normal way to maximise value for the taxpayer? Doing it at the same time as running off a mortgage book at Northern Rock, which the Government strangely decided to buy, is doubly hazardous.

My right hon. Friend’s lucidity is matched only by his assiduity. He makes his point with a force that I would be reluctant to use. I mentioned the possibility of inappropriate sales at an inappropriate time, but as ever he draws the issue into sharp focus. It is entirely possible that the Government might be forced to sell part of the loan book at the least desirable time, in the circumstances that he describes. That would be scandalous, because the loan book is an important public asset. It is right that we should consider selling it—that has been Conservative policy for some years—and we welcome the spirit that lies behind the Bill, but the devil is in the detail. We need to get the terms and conditions right, as well as the circumstances, and ensure that Parliament has the ability to scrutinise the sale.

The report that the Government will bring to the House on the sale will include, as we have argued both publicly and privately with Ministers, any advice given by the Treasury about the assessment of value for money. The Minister has said throughout that a value-for-money framework lies at the heart of the Government’s strategy, and we would simply argue that all hon. Members should have access to that so that they can test the Government’s adoption of the powers in the Bill against the circumstances in which the loans are sold. I am delighted that the Minister has moved a considerable way towards our position on that point by adding an amendment that makes the report a statutory requirement and requires it to be laid within three months of the date on which the Secretary of State enters into transfer arrangements.

So we will get the report, understand the advice that has been given to the Government and see the value-for-money framework. That would mean that the Opposition —indeed all hon. Members—would be able to scrutinise the Government accordingly. Whatever pressure has been put on the Minister by the Treasury, he will be answerable for the circumstances of the sale, credit crunch or no credit crunch.

Our amendment to Lords amendment No. 7 would insert the requirement that

“The report must also include an assessment of the impact of the sale on borrowers.”

The effect on borrowers should also be taken into account, given that no impact assessment was made when the Bill was published and I understand that the Government are unlikely to add one at this late stage. At the very least, a retrospective analysis of the impact on borrowers should form part of the report that the Government make to the House. I have tested the Minister on this point privately. I asked him in writing—I am sure that we would be willing to make that correspondence public—why there was no impact assessment originally, why one should not be made now and why, given the permissive nature of the amendments introduced in the Lords, we should not test the issue even at this late stage.

Sadly, even given the Minister’s eminent sense of fair play and professionalism, he has yet to bring an impact assessment before the House. It is, therefore, all the more important that the impact on borrowers be included in the report that we get retrospectively. I shall be interested to hear his comments on that. We are delighted that this amendment was tabled. We first raised our concerns on Second Reading and in Committee, and pointed out that it would be “useful” to have a provision on value for money that was set in stone. On Report, my hon. Friend the Member for Reading, East (Mr. Wilson) moved an amendment that would have placed value-for-money criteria on the face of the Bill. At the time the Minister described the amendment as unnecessary and I am glad that, following detailed discussions and correspondence, we have been able to find a way forward.

On Second Reading, the Minister explained that the loan book had last been valued at £18.1 billion, and he said that it was the Government’s intention to raise £6 billion in receipts over the next three years—almost exactly a third of the book’s value. I hope that he will be able to give us some idea of the Government’s immediate intentions. Do they intend to sell a third of the loan book over the next six months to a year? If they do not intend to sell a third, what proportion do they intend to sell? We would also like some idea of the timetable, given that these amendments deal with value for money, and it is difficult for us to understand the scale of the issue unless we understand the detail of the Government’s intentions.

My right hon. Friend the Member for Wokingham mentioned the credit crunch and the uncertain financial markets, which have worsened since Second Reading, which was held on 22 November last year. It would be useful to know whether any subsequent valuation of the loan book has been made, because it may well be that the Government need to sell more than a third to raise the stated £6 billion. It could be less, of course—I do not want to be too pessimistic.

I would have thought that the ideal outcome would be for the Government to pass the legislation but await a market improvement. Then the incoming Conservative Government could have the receipts in their first year.

That would be nirvana, a perfect outcome. We would support the Bill with alacrity on the basis that we would spend the cash, and we would, of course, put it to altogether better use than the present Administration. However, I do not wish to be unkind. After all, it is my birthday and I am even more tempted to be generous than my character leads me to be every other day of the year.

We do not know whether the value of the loan book has gone up or down since November. We can guess, based on market conditions, but it would be useful if the Minister could give us a little more detail. He has told us on numerous occasions that if value for money cannot be ensured, the sale will not go ahead. This amendment will ensure that proper parliamentary scrutiny takes place, but it is also important that we have some idea of the effect on borrowers. Our amendment would ensure that borrowers had that certainty about their future circumstances.

As I said, it is unusual for the Government to table as significant an amendment as Lords amendment No. 2 to a Bill after its Commons stage. When the Bill was introduced, a full impact assessment was not conducted because, as I argued, the Government did not feel that it was necessary. They said that no aspect of the Bill would

“create a material impact on borrowers, higher education institutions or employers”.

However, the new provisions will allow the Secretary of State either to fix or to change regulations in relation to those loans that are to be sold, with a consequent material impact on borrowers. Given that Lords amendment No. 2 changes the terms of the Bill, one possible way forward would be for the Government to conduct a retrospective assessment of the impact of each sale on the holders of student loans. The permissive nature of the amendment has created considerable uncertainty about the potential impact of sales and a full assessment would provide much-needed clarity on that point and thus might allay Opposition concerns, as I said when I wrote to the Minister about these matters.

I want to say a few words about Lords amendments Nos. 11 to 14. The explanatory notes on the Lords amendments say:

“These amendments would make drafting changes to the clause on sharing of information with purchasers and potential purchasers. Lords Amendments 11 and 12 would make explicit that HMRC information may be disclosed in relation to loans that have not yet been sold, as well as those that have been sold. Restrictions already contained in the Bill restrict the disclosure of personalised data to actual purchasers and their agents.”

The Minister has repeatedly made it clear that data would be anonymised in as much as they needed to be shared—for example, for accounting purposes. The explanatory notes go on:

“Amendment 13 would define the permitted onward disclosure of anonymised HMRC data by reference to the purpose of disclosure—in connection with loans that have been or may be transferred—rather than by reference to the identity of parties who may receive such data. Amendment 14 would make explicit that the narrow group to which onward disclosure of personalised HMRC data is permissible does include loan purchasers’ auditors.”

It would be useful if the Minister said a further word about all that.

There have been doubts about the maintenance and transfer of personal data. I do not want to raise again the issue of the failures and errors of the Government in handling data. To do so would perhaps be harsh on the Minister, who has not been personally responsible for such problems. However, he takes collective responsibility for the shambolic behaviour of those on the Labour Front Bench and, as a result, it is important that we have assurances from him today about precisely what will happen in respect of data handling.

We are pleased that the Government have made amendments to the Bill to clarify the provisions on who will have access to HMRC data. We have expressed concerns throughout the passage of the Bill, in the measured way that I have today, about the danger of data falling into the wrong hands, being misused or, heaven forbid, being lost altogether. That danger is particularly acute if the book is broken up into many parts as a result of onward sales.

The Minister said earlier that he does not expect the loan book to be collateralised and sold on. He has made that point repeatedly during our considerations, but I find it hard to believe. It might well be sold on as that is the nature of the sale of debt. I accept his assurances that control can be exercised in respect of the initial sale, but the hon. Member for Bristol, West was right to insist that, because of the potentially convoluted and complex nature of the data that will be held and shared, a clear audit trail is very important.

I am grateful for the Minister’s assurance that the Student Loans Company will be the responsible agency for that information, but once again borrowers will want assurances about not only the accuracy of the data that are being transferred but where the data will reside, who has access to them and who might get access to them by fair means or foul. It is important that the Minister should say a word or two more given the prevailing circumstances, not all of his making, of public doubts about data, their maintenance and their security.

I hope that the Minister will be able to come back specifically on Lords amendment No. 2 and our amendment to it. I hope that he will say a further word about the security of data and that he will also tell us something about the reason for the amendment and the background to it, in order to clear up the uncertainty that has arisen from the original letter from Baroness Morgan and the subsequent discussion. I hope that he might also give us some feel of the value of the book and the Government’s intentions in respect of sales, of how those sales might operate and of how the report to Parliament might shape up in practice. All Members of this House are determined that borrowers’ and taxpayers’ interests should be preserved. This House is the place to ensure that Ministers are held to account accordingly.

I hope that our amendment, our response to Government amendments and the views expressed by Opposition Members in the other place and here have made those matters paramount in the Minister’s mind, so we wait to hear him express his thoughts in a few moments’ time.

The Conservative Front-Bench spokesman, with some help from a distinguished Back Bencher, the right hon. Member for Wokingham (Mr. Redwood), has already well rehearsed the arguments about how the Government must weigh up the interests of the taxpayer while at the same time protecting the interests of the graduates who have borrowed from the Student Loans Company.

I understand that to secure value for money for the taxpayer and to get the best possible circumstances for a successful sale, the Government might want to reduce the uncertainty for any potential purchaser but, none the less, I am worried that Lords amendment No. 2, inserted by the Government, perhaps limits the scope for future Parliaments—or, indeed, for future Governments, as the Government probably have a defined life that may well end quite soon—to alter the terms of loan repayments.

There are four aspects of loan repayments that graduates have to face and it would be entirely valid for this Government or future Governments to reconsider them. There is the threshold for the commencement of loan repayments, which is set at a salary level of £15,000. That threshold has been in place for several years now and, unlike virtually all other effective aspects of the tax code, it is not indexed each year, alongside the personal allowance and higher rate tax bands. It has been left frozen at £15,000 for some time and is therefore quite regressive in its impact. It would be legitimate for a future Government or this Parliament to reconsider that threshold. The repayment rate of 9 per cent. is effectively a flat-rate tax—I understand that there are enthusiasts for flat-rate taxes on the Opposition Benches.

It should certainly be considered. The Minister will be aware, as I am—I represent a constituency with many graduates who face these punitive loan repayments—that concerns have been expressed by individuals and by the National Union of Students about the repayment terms. The rate of repayment, which is 9 per cent. of earnings, is a hefty flat-rate tax to face early on in a graduate career. The cut-off period of 25 years is a progressive part of the loan regime, which we would want to protect, but none the less the discretion of a future Parliament to review it should not be fettered.

The terms of the rate of interest, its calculation and whether it is related to the consumer prices index or the retail prices index has, as I am sure the Minister will know, been the subject of much discussion in student circles in the past couple of years as those rates have deviated from each other. The Government choose one measure of inflation to calculate people’s salary increases—particularly of people in the public sector, who include many graduates—but choose another to uprate the terms of their underlying graduate debt. A future Government may wish to consider all those things; I hope that the Minister is not fettering the scope of such deliberation.

I shall not say much about amendment No. 3. Instead, I turn to amendment No. 7, which is about value for money for the taxpayer. That issue exercised us greatly on Report in January, and it was rightly the subject of much debate in another place. It is good that the Government have now conceded that they will make a report to Parliament within three months of any sale. It will include the publication of the Treasury guidance to the accounting officer of the Department for Innovation, Universities and Skills. I wonder who will audit the report. Will there be any external audit? Obviously, the report will be about a substantial part of the Government’s income.

I presume that those matters could be considered by the Public Accounts Committee, for example. Indeed, once the loan book had been sold, I would be surprised if the Committee did not want to consider them in detail.

The hon. Gentleman’s intervention anticipated my next point. As I said on Report back in January, we assume that the transaction is of such magnitude that the National Audit Office will want to consider it retrospectively to make sure that the Government have obtained value for money for the taxpayer. In the ordinary course of events, that will lead to a hearing in front of the Public Accounts Committee, of which I used to be a member, and to another report. Will there be an additional external audit, independent of the National Audit Office, of the report that will come to Parliament? There is often a significant gap between a transaction resulting from a Government action, the National Audit Office’s consideration of that transaction, the Public Accounts Committee’s consideration of it and the publication of the PAC report; often there will 12-plus months in between. It is important that the report that comes to Parliament within three months should be independently verified.

The hon. Gentleman has made an extremely strong point. Will the Government encourage the National Audit Office and the Public Accounts Committee to take a look after the sale of each tranche of the book? The Minister may want to say something about that today. It seems appropriate for the PAC to do that, given the potential delay mentioned by the hon. Member for Bristol, West (Stephen Williams). If we are to have a report to Parliament in three months, why should the National Audit Office and the Public Accounts Committee not scrutinise each report?

The hon. Gentleman’s point is helpful, I am sure. None the less, the independence of the Public Accounts Committee is an important part of parliamentary procedure; perhaps it should not take suggestions from the Government on when it is or is not appropriate for it to consider a particular transaction. I shall, however, be interested in the Minister’s reaction to the hon. Gentleman’s suggestion.

A second, practical aspect of the matter is the time limit of three months. Let us suppose that the Bill goes through tonight and receives Royal Assent shortly. If they wished, the Government could then embark on a series of sales. In three months’ time, I shall probably be in Bournemouth and the Minister may well be preparing to go to wherever his conference is this year. How flexible will the period be?

During the discussion on our earlier string of amendments, we had a debate on the meaning of the words “aim to”; amendment No. 7 refers to a precise period of three months. How will it be possible to make a report to Parliament within three months if Parliament is not sitting?

I turn to the general question of value for money. As Conservative Members have said, this is not a terribly good time for the Government to sell off part of their underlying assets. The Government may well be so desperate to make a sale at the moment that they are seeking to put terms into the Bill that are drafted to be in the interests of potential purchasers. To meet their obligations under the comprehensive spending review, the Government need to raise the proceeds that have already been referred to. In this financial year of the three-year CSR, I understand that the Government have a target to raise £3.4 billion, before the end of March 2009. Will the Minister confirm that? They aim to raise £6 billion overall in the three-year CSR period. Government finances are in a parlous state so will the Government be pressurised into selling this asset, which currently belongs to the taxpayer, to meet short-term financial embarrassments, rather than to make long-term investments in higher education? Such investments would be a much better use of the proceeds that will be realised once the student loan book is partially sold.

I shall not dwell for too long on amendments Nos. 11 to 14; the hon. Member for South Holland and The Deepings (Mr. Hayes) has already diligently read out the guidance notes on the Bill. However, I share his concern that we should make sure that proper data protection procedures are in place so that the data that belong to individuals are not in any way compromised and are held only by those with a direct interest in the individual and their ability to make repayments, and not by any prospective purchasers or any people associated with them.

This group of amendments deals with the process by which the Government may give undertakings concerning amendments to regulations, with how the Government will report on each sale and with how information about borrowers will be handled. Let me start by being explicit about the value-for-money framework. Throughout the proceedings on the Bill, we have made it clear that the sales would not take place unless we could demonstrate value for money. The Government have published forecasts of anticipated receipts of some £6.3 billion from the proposed sales programme over the comprehensive spending review period. However, the key point is that the amounts are forecasts rather than commitments. The Government are committed to the student loans sale programme, but only if any sale represents good value for money. That should be a significant reassurance.

I turn specifically to amendments Nos. 2, 3 and 15, which are about undertakings. They respond to expert advice that we have received from our sales arranger, Deutsche bank, which was engaged after Report and Third Reading in the House. For us to achieve good value for money on behalf of the taxpayer, potential purchasers must understand what is being sold. Financial institutions can model the economic and credit risks that we wish to transfer away from the Government, but not the political risk of Ministers using their powers to change the conditions of repayment—and, consequently, predicted cash flows to the purchaser. If potential purchasers believed that the Government might alter an asset in an unpredictable way after selling it, that would seriously reduce what those purchasers would be prepared to pay.

The Bill already provides the option of offering compensation if future policy changes compromise the value of the transferred asset. However, we have been advised that the Government might achieve better value for money if they could give undertakings about how regulations governing student loans may or may not change terms and conditions in future. The impact that a compensation mechanism may have on the size and timing of future cash flows may contain too much uncertainty for investors. Having the power to give undertakings also gives flexibility to cater for possible changes in the classification rules, which are currently being redrafted by EUROSTAT.

The Minister has been clear about the reasons. If a Minister acted in the way that he describes, terms could be fixed on the part of the loan book that was being sold, but not on the part that was not being sold. That would mean that borrowers in the same circumstances, borrowing the same amount for the same reason, had very different arrangements. Is the Minister uncomfortable about that?

As I have made clear throughout the proceedings on the Bill, we expect the terms and conditions to be the same regardless of whether the student loan has been sold. The impact on the borrower should be exactly the same.

I was referring to the EUROSTAT redrafting process. Changes in the rules, which occur from time to time, can have a material impact on the ability to offer compensation. It would be unwise to have only one means of addressing the issue that might, under rules updated after the current redrafting or a future alteration, prevent a true sale. That would negate part of the purpose of transferring the loans from the public to the private sector. I can give the response that the hon. Member for South Holland and The Deepings (Mr. Hayes) asked for in respect of the comments of my noble Friend Baroness Morgan. She made it clear in the other place that the amendment that gives powers to make undertakings aims to ensure that a sale can yield good value for money and that a true sale can release resources for use on Government priorities. It provides an option for the Government to use in realising both those aims.

I think that the Minister may have misunderstood my first intervention; perhaps I did not make it clearly enough. If the terms were fixed for the tranche of the loan book that was being sold, which is precisely what the amendment gives the Government power to do, it is entirely possible that borrowers whose loans had been sold would have fixed term loan rates whereas borrowers whose loans had not been sold might be subject to the decisions of a subsequent Minister in this Government, or indeed in a different Government, regarding their loan rate. Is that something that we should sanction?

I think that I answered the hon. Gentleman’s point. We have made it clear throughout that we expect borrowers—graduates—to be treated in exactly the same whether their debt has been sold to the private sector or remains with the Government. There should be—and there will be, as far as this Government are concerned—equality of treatment.

Another point was made by the right hon. Member for Wokingham (Mr. Redwood), who is no longer with us—

Indeed. The phrase, “No longer with us”, has another interpretation that I did not for a minute wish to suggest.

The right hon. Gentleman suggested that we were seeking to make the product more agreeable by allowing purchasers to take more money from students. It is important to put that point right—the Bill is about ensuring that the product does not become more disagreeable. It gives investors the certainty that we will not sell them one product and then legislate to turn it into another product. It is categorically and explicitly not about allowing purchasers to take more money from borrowers, as we made clear with amendments Nos. 8 and 9, which we have already discussed. Amendments Nos. 2 and 3 enable the Secretary of State to give undertakings about the power to make or amend loan regulations under section 186 of the Education Act 2002.

On the Opposition amendment to Lords amendment No. 2, it may help if I say a little more about how we expect the undertakings, which would be included in the contract for the sale of the loans, to work. The aim of any such undertakings would be to provide a degree of certainty to potential purchasers that the Government will not amend regulations after a transaction in a way that would affect the nature of the asset and decrease the value of the asset that had been sold or do so in a way that was not set out at the time of the sale. No one buys a product in the expectation that it will turn into something completely different. Purchasers will be concerned to guard against that, not to seek to improve their position. The undertakings that we envisage will not be about changing or promising to change loan terms to improve the lot of the purchaser but about giving certainty about the current position and the Government’s intentions over time. The exact wording of such undertakings, if given, would have to be worked out as an integral part of the sale documentation.

Through those contractual undertakings, the Secretary of State can set out his intentions not to make particular amendments to loan regulations after a sale or to limit changes to the regulations in particular ways. For example, he might undertake not to propose an increase in the repayment threshold by more than a certain factor in a given year or to change the regulations only to do something that purchasers could predict. Paragraph (a) is necessary—this goes to the heart of the Opposition amendment—to avoid any doubt that such undertakings can be made. The loan terms will continue to be governed by regulations, which are subject to scrutiny and approval in the House. On that basis, I urge the hon. Member for South Holland and The Deepings to withdraw his amendment.

I turn to amendments Nos. 7 and 16. If the Government use undertakings in sale contracts, they will be made public as part of the sale process. That brings me to amendment No. 7 on reporting to Parliament. In this House and in another place, value for money has rightly been at the centre of our discussions. Having listened carefully to the arguments, we propose to strengthen the commitment that I gave on Third Reading that the Government would report to Parliament after each transaction. Amendment No. 7 places a statutory obligation on the Secretary of State to report to Parliament within three months of each transaction. He must inform Parliament about the value-for-money assessment that his Department made that led to the transaction going ahead. The report should reflect any Treasury guidance on the required procedures used across the public sector for assessing value for money. The hon. Member for South Holland and The Deepings referred to the role of the National Audit Office and the Public Accounts Committee. The NAO and the PAC have already made clear their intention to report on these matters. The hon. Member for Bristol, West (Stephen Williams) got it right—this is not a matter to be dictated by Government but a matter for the NAO and the PAC, which have made their position clear.

In response to the Opposition amendment to Lords amendment No. 7, I am happy to put it on record that the report should cover any effect that the transaction would have on borrowers. As we have stressed throughout the passage of the Bill, protecting the position of borrowers is one of our key and fundamental objectives. I acknowledge the diligent efforts of Opposition Members to press us on how we will meet that aim. I believe that the safeguards in the Bill, not least those contained in amendments Nos. 8 and 9, mean that the sales transaction, including any undertakings that may be given, will have no detrimental effect on borrowers. We expect that the report to Parliament would confirm that. I hope that the hon. Member for South Holland and The Deepings will agree that the commitment that I have made on the record is the appropriate response to what he has sought and argued for. I hope that he is therefore reassured and urge him to withdraw the amendment.

The Minister is being typically generous, but will he clarify this point? I appreciate that the Government do not expect there to be any impact on borrowers, but is he saying that an assessment of that would be included in the report regardless of whether there was an impact?

Absolutely; that is my commitment on the record.

Amendments Nos. 11 to 14 make drafting changes to clause 6 on information about borrowers. There must be no doubt about how HMRC information may be disclosed in relation to loan sales. Amendments Nos. 11 and 12 provide a simpler expression that disclosure may relate both to loans being offered for sale and those that have already been sold. Amendment No. 13 describes a class of disclosure of anonymised HMRC financial information, so that it may go to those who have a purpose connected with the loans being offered for sale or that have been sold. We believe that that is the most effective way to ensure that this kind of non-personal data can be given to those who need that information, because across a long-term programme of loan sales we could never create a complete list of the potential purchasers, investors and financial institutions that could provide advice about a transaction. On the much more restricted access to personal data, amendment No. 14 is intended to make it clear that the narrow definition of an actual purchaser or its agent should include the purchaser’s auditor. Without the explicit reference, that might not be understood.

The amendments in this group enhance the Bill. They provide a more effective framework for the programme of sales at the same time as strengthening accountability to Parliament. We have had constructive engagements and we have a stronger Bill. On that basis, I commend the amendments to the House and hope that the Opposition can feel free to withdraw their amendments.

I am grateful for the Minister’s remarks. He is right: this has been a model of good parliamentary dialogue. We have had a useful and constructive series of engagements on the Floor of the House, in the other place, in Committee, and, if I may put it this way, behind the scenes. We have exchanged letters between Ministers and shadow Ministers in a manner that was altogether more co-operative than the public might expect or anticipate. They would be alarmed if they knew quite how friendly our relations have been, because some love to paint us in a less favourable light than we deserve, do they not, Mr. Deputy Speaker?

The Minister has made important changes to the Bill, which in essence give the House the power to assess the Government’s behaviour in an entirely reasonable way. That is to say, it can make an informed judgment based on empirical evidence about whether value for money has been assured. We now hear, and I am delighted that the Minister has said so, that that will include an assessment of the impact on borrowers of just the kind that I asked for in my remarks a few moments ago. On that basis, how could I possibly complain about the amendments before us, or the Minister’s response to them?

The Opposition have fulfilled their purpose. We have scrutinised the legislation with assiduity, and I thank my hon. Friend the Member for Reading, East (Mr. Wilson), other Conservative Members, and indeed, although it is against my instincts ever to be nice to Liberals, I thank the hon. Member for Bristol, West (Stephen Williams). On the basis of those assurances, I am delighted to say that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lords amendment agreed to.

Lords amendments No. 3 to 16 agreed to.