Details on the much-anticipated rise in tuition fees were few and far between in the Chancellor’s Emergency Budget last Tuesday, while specific information on the potential sale of the student loan portfolio was also absent.
The student loan book is worth just over £18.1bn and is expected to increase in value to £55bn over the next 10 years. Selling the portfolio would allow the government to sell part of the income-contingent student loans to a third-party purchaser, disclose personal information on the loans to them and make arrangements to sell the student loans.
A programme of sales is seen as the most effective way to manage this large and growing government asset and the government expects to make around £6bn over the next three years if market conditions are right, which as shadow Treasury spokesman as he was then, Vince Cable said, remains to suffer from distressed prices.
“What worries me about the government proposal is that they’re proposing to sell off in very depressed markets, under very depressed markets for land and for shares.
“The student loan book is a slightly easier thing because it’s government backed, but they’re going to get very distressed prices. This is not a good time to sell assets.”
The only other piece of news was the Chancellor’s confirmation that the increase in cider duty rates of 10 per cent above inflation announced in the March Budget will be reversed from 30 June 2010. Nevertheless, secondary legislation will be introduced shortly to increase tax on cheap, strong ciders, while the Government will also review alcohol taxation and pricing and will report in the autumn.
There will also be no increases in the rate of duty on beer, wine or spirits at this Budget but the Government will continue with the plans it inherited to increase the rates by 2 per cent above inflation each year to 2014-15.