MP, Labour’s Shadow
Secretary of State for Education, commenting on the
Government’s written statement on the latest student loan sell
off, said:
“After being told that student loan sales do not strengthen the
public finances, and without even having a Universities Minister
in place, this Government is privatising assets at a loss, and it
will be taxpayers who lose out in the long run.
“These loans have been sold at less than half of their face
value, a similar loss to the previous sale, when the Government
lost hundreds of millions of taxpayers’ money. This is a scandal.
The Government must reveal exactly how much more public money has
been lost to serve the Conservatives’ ideological obsession with
privatisation.
“Selling off student loans does nothing for students and does not
strengthen the public finances in a meaningful way. Labour will
take action to support students and universities, scrapping
tuition fees and bringing back maintenance grants as part of an
education system for the many, not the few.”
Ends
Notes to Editors:
- Written Ministerial Statement
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-12-04/HCWS1137/
- · The National Audit
Office found that last year’s sale of student loans, at less than
half of the face value and around three quarters of the book
value of the loans, cost taxpayers £600 million in future
receipts
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-12-04/HCWS1137/
- · The National Audit
Office found that last year’s sale of student loans, at less than
half of the face value and around three quarters of the book
value of the loans, cost taxpayers £600 million in future
receipts, p4
https://www.nao.org.uk/wp-content/uploads/2018/07/The-sale-of-student-loans.pdf
- The Office for Budget responsibility said that the recent
sale of £3.5 billion of loans for £1.7 billion does not
strengthen the public finances.
“When selling student loans, the Government is simply swapping
an uncertain flow of future revenue for a certain – but smaller
– upfront sum. In effect, it is simply securitising a portion
of future income tax receipts and then selling them at a
discount to their expected value. (The sale of the first
tranche of Plan 1 loans, which took place in November 2017,
involved the Government exchanging loans with a face value of
£3.5 billion for £1.7 billion in up-front cash. Only part of
the £1.8 billion difference reflected the size of the expected
write-offs.) This does not strengthen the public finances in
any meaningful sense – it is simply an alternative way to
finance the budget deficit, and a relatively expensive one at
that given current borrowing costs.”
Office for Budget Responsibility, Economic and fiscal
outlook: October 2018, p187
https://cdn.obr.uk/EFO_October-2018.pdf
