States Meeting Transcript - 06/06/2007

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 6th JUNE 2007

APPOINTMENT OF MINISTERS, COMMITTEES AND PANELS..........................5

1. Resignation of The Deputy of St. Martin - Chairman of the Education and Home Affairs Scrutiny Panel....................................................................5

The Bailiff :....................................................................................5 1.1 Deputy F.J. Hill of St. Martin : ...........................................................5

PUBLIC BUSINESS (resumption).............................................................5 Connétable A.S. Crowcroft of St. Helier:......................................................5

2. Student Loans for Higher Education: Introduction (P.52/2007)........................5

2.1 Senator M.E. Vibert (The Minister for Education, Sport and Culture):...................6 The Bailiff :....................................................................................6 Deputy J.A. Martin of St. Helier:..............................................................6 Senator M.E. Vibert :...........................................................................6 Deputy G.P. Southern of St. Helier:............................................................6 The Bailiff :....................................................................................6 The Deputy of St. Martin:......................................................................6 Senator M.E. Vibert :...........................................................................7

1. Deputy C.J. Scott Warr en of St. Saviour:...............................................11
2. Deputy P.V.F. Le Claire of St. Helier : ..................................................11
3. Deputy R.C. Duhamel of St. Saviour:..................................................12

4. Deputy K.C. Lewis of St. Saviour:......................................................13
5. Deputy S.C. Ferguson of St. Brelade : ..................................................14
6. Deputy J.A. Martin:....................................................................14
7. Deputy C.F. Labey of Grouville :........................................................15
8. Deputy P.J.D. Ryan of St. Helier : ......................................................15

9. Deputy A.D. Lewis of St. John : ........................................................16
10. Senator B.E. Shenton: ...............................................................17
11. Deputy J.B. Fox of St. Helier : .......................................................17
12. Deputy P.N. Troy ofSt.Brelade:....................................................19
13. Deputy G.P. Southern : ..............................................................19
14. Deputy D.W. Mezbourian of St. Lawrence:..........................................21
15. Senator M.E. Vibert :................................................................21 Deputy S.C. Ferguson:........................................................................24 Senator M.E. Vibert :..........................................................................24 The Bailiff :...................................................................................25

3. Student Loans for Higher Education: Guarantees (P.53/2007)........................26

1. Senator T.A. Le Sueur (The Minister for Treasury and Resources): ....................27
2. Deputy P.J.D. Ryan:....................................................................27

3. Deputy P.V.F. Le Claire: ...............................................................27
   4. Deputy S.C. Ferguson:..................................................................27
   5. Senator T.A. Le Sueur:.................................................................28 The Greffier of the States (in the Chair):......................................................28

4. Composition and Election of the States Assembly: Election Dates for Connétable s (P.54/2007)...............................................................................28

4.1 Connétable D.F. Gray of St. Clement:..................................................28

1. Connétable K.P. Vibert of St. Ouen:....................................................28
2. Deputy G.C.L. Baudains of St. Clement : ...............................................29
3. Senator L. Norman: ....................................................................29
4. The Deputy of St. John:................................................................29
5. Connétable T.J. du Feu of St. Peter:....................................................30
6. Senator M.E. Vibert :....................................................................30
7. Senator P.F.C. Ozouf :..................................................................30 The Greffier of the States (in the Chair):......................................................31

5. Draft Criminal Justice (Miscellaneous Provisions) (No. 2) (Jersey) Law (P.56/2007).32

5.1 Senator W. Kinnard (The Minister for Home Affairs):..................................33

1. Deputy R.G. Le Hérissier: ..............................................................33
2. Deputy J.J. Huet of St. Helier : ..........................................................33
3. Deputy G.C.L. Baudains:...............................................................33
4. Senator W. Kinnard:....................................................................33 The Greffier of the States (in the Chair):......................................................34 Deputy D.W. Mezbourian (Vice-Chairman of the Education and Home Affairs Scrutiny Panel):..................................................................................35

6. Commissioners of Appeal for Income Tax: Re-Appointment (P.59/2007).............36

1. Senator T.A. Le Sueur:.................................................................36
2. Deputy P.J.D. Ryan:....................................................................36
3. Deputy G.W.J. de Faye of St. Helier:...................................................36
4. Senator T.A. Le Sueur:.................................................................37 The Greffier of the States (in the Chair):......................................................37

7. The Disciplinary Panel of the Law Society of Jersey: Appointment of Lay Members (P.62/2007)...............................................................................37

Senator F.H. Walker (The Chief Minister):...................................................37

1. The Connétable of St. Ouen (Assistant to the Chief Minister):..........................37
2. Deputy R.G. Le Hérissier: ..............................................................37
3. The Deputy of St. Martin:..............................................................38
4. Deputy G.W.J. de Faye:................................................................38
5. The Connétable of St. Ouen:............................................................38 The Greffier of the States (in the Chair):......................................................38

8. The Jersey Council for Safety Health at Work: Appointment of Chairman (P.67/2007) ...........................................................................................38

8.1 Senator P.F. Routier (Minister for Social Security):....................................38 The Greffier of the States (in the Chair):......................................................38

9. The Jersey Consumer Council: Appointment of Chairman (P.69/2007) ..............39

Deputy A. Breckon:..........................................................................39

1. Senator P.F.C. Ozouf :..................................................................39
2. Deputy K.C. Lewis :....................................................................40

3. Deputy J.A. Martin:....................................................................40
4. Deputy C.J. Scott Warr en: ..............................................................40
5. Senator P.F.C. Ozouf :..................................................................40 The Greffier of the States (in the Chair):......................................................40

PUBLIC BUSINESS - CONSIDERATION OF DEFERRAL OF NEXT ITEM ..............41

10. The Greffier of the States (in the Chair):................................................41

1. The Connétable of St. Clement:........................................................41
2. Deputy G.W.J. de Faye:................................................................41
3. Senator T.A. Le Sueur:.................................................................41 The Greffier of the States (in the Chair):......................................................41
4. Deputy J.B. Fox:........................................................................41
5. Deputy J.A. Martin:....................................................................41
6. Deputy G.C.L. Baudains:...............................................................42
7. Deputy J.A. Hilton of St. Helier:........................................................42
8. Deputy S. Power of St. Brelade : ........................................................42
9. Senator T.J. Le Main: ..................................................................42 The Greffier of the States (in the Chair):......................................................42 10.10 Deputy C.J. Scott Warr en: ..............................................................42 10.11Senator P.F. Routier: ...................................................................42 10.12Senator J.L. Perchard:..................................................................42 10.13Senator F.H. Walker :...................................................................43 10.14 Deputy R.G. Le Hérissier: ..............................................................43 10.15Senator T.J. Le Main: ..................................................................43 The Greffier of the States (in the Chair):......................................................43

The Greffier of the States (in the Chair):......................................................43

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS ....................44

11. The Greffier of the States (in the Chair):................................................44 Deputy G.C.L. Baudains:.....................................................................45

1. Senator F.E. Cohen:....................................................................45
2. The Connétable of St. Clement (Chairman of the Privileges and Procedures Committee): 45
3. Deputy S.C. Ferguson:..................................................................45
4. Deputy A. Breckon of St. Saviour:......................................................45

APPOINTMENT OF MINISTERS, COMMITTEES AND PANELS.........................45

12. Senator M.E. Vibert :....................................................................46 The Greffier of the States (in the Chair):......................................................46

1. Deputy S. Pitman of St. Helier:.........................................................46
2. Deputy S.C. Ferguson:..................................................................46
3. Deputy D.W. Mezbourian :..............................................................46
4. Deputy P.V.F. Le Claire: ...............................................................46
5. Deputy P.N. Troy : ......................................................................47 The Greffier of the States (in the Chair):......................................................47
6. The Deputy of St. Martin:..............................................................47 The Greffier of the States (in the Chair):......................................................47
7. Deputy G.P. Southern :..................................................................47
8. Senator W. Kinnard:....................................................................48
9. Senator M.E. Vibert :....................................................................48 12.10 Deputy R.G. Le Hérissier: ..............................................................48 12.11 Deputy P.J.D. Ryan:....................................................................4812.12Senator J.L. Perchard:..................................................................48 The Greffier of the States (in the Chair):......................................................48

LUNCHEON ADJOURNMENT................................................................50 The Greffier of the States (in the Chair):......................................................50

PUBLIC BUSINESS (continued) .............................................................50

13. La Pouquelaye Old School Site: Purchase (P.55/2007).................................50

1. The Connétable of St. Helier:...........................................................50
2. Senator T.A. Le Sueur:.................................................................53 Deputy G.P. Southern :........................................................................55
3. Deputy J.A. Martin:....................................................................55
4. Deputy K.C. Lewis :....................................................................57
5. Deputy S.Pitman:......................................................................57
6. Deputy G.W.J. de Faye:................................................................57
7. The Deputy of St. John:................................................................59
8. Deputy S.C. Ferguson:..................................................................59
9. Senator M.E. Vibert :....................................................................60 13.10 Deputy C.J. Scott Warr en: ..............................................................60 13.11 Connétable M.K. Jackson of St. Brelade:...............................................61 13.12Senator P.F. Routier: ...................................................................61 13.13Senator B.E. Shenton:..................................................................61 13.14 Deputy J.B. Fox:........................................................................62 13.15 Deputy J.A. Hilton:.....................................................................64 13.16 Deputy P.V.F. Le Claire: ...............................................................64

13.17Senator P.F.C. Ozouf :..................................................................66 13.18 Connétable J.Le.S. Gallichan of Trinity :................................................67 13.19 Deputy J.J. Huet:.......................................................................68 The Bailiff :...................................................................................68 Deputy J.J. Huet:.............................................................................68

The Bailiff :...................................................................................68

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS (continued)....70

14. The Bailiff :.............................................................................70

14.1 Senator M.E. Vibert :....................................................................70

1. Deputy G.P. Southern : ..............................................................70 The Bailiff :...................................................................................70
2. Senator M.E. Vibert :................................................................70
3. Deputy G.P. Southern : ..............................................................71
4. Deputy G.W.J. de Faye: .............................................................71
5. Senator P.F.C. Ozouf : ...............................................................72
6. The Connétable of St. Peter:.........................................................72 The Bailiff :...................................................................................73

ADJOURNMENT................................................................................74 The Bailiff :...................................................................................74

The Roll was called and the Dean led the Assembly in Prayer.

APPOINTMENT OF MINISTERS, COMMITTEES AND PANELS

1. Resignation of The Deputy of St. Martin - Chairman of the Education and Home Affairs Scrutiny Panel

The Bailiff :

Before we continue with public business, may I inform Members that I have received notice of resignation from the Chairman of the Education and Home Affairs Scrutiny Panel, the Deputy of St. Martin , and the Deputy has asked me to convey that to the States this morning.

1.1 Deputy F.J. Hill of St. Martin :

As you know I have sent you a personal statement, which it is your prerogative to decide whether I can or whether I cannot say it; and as you have decided, Sir, that I cannot say what I would like to say, clearly the Members of the House do not know why I am resigning and, more importantly, I do not think the public will know why I am resigning if I am not allowed to make my personal speech. It does grieve me, Sir, because the whole incident which has led me to have to make this decision to resign has been deeply upsetting and it puts me in a difficult position because members of the public will be asking me why I have resigned.

The Bailiff :

Deputy , you have had very clear advice from the Greffier as to what it is proper for you to say and what it is not proper for you to say and you may certainly say what it is proper for you to say.

The Deputy of St. Martin :

Well, if I am not proper to say in here, Sir, it may well be proper for me to say it outside so Members will want to know and no doubt they will have to find out via the media. Thank you, Sir.

The Bailiff :

I am sure that you will conduct yourself as a Member of the States honourably should, Deputy .

PUBLIC BUSINESS (resumption)

Connétable A.S. Crowcroft of St. Helier :

Before we start the business could I ask through you, Sir, the leave of the Assembly to attend a D-Day commemoration service today which I understand you will also be attending, so that if P.55, La Pouquelaye School site purchase should be reached on the agenda before lunch I will not be here to move this and I would request leave of the Assembly for later items to be done in advance.

The Bailiff :

I am sure Members will agree to allow the Connétable to attend the ceremony at 12.00 p.m. Greffier, it reminds me that it is a matter for Members to decide when to fill a casual vacancy; that is the vacancy in the Chairmanship of the Education and Home Affairs Scrutiny Panel. The States has the option of doing it today or at the next meeting and no doubt Members will give some consideration to that during the course of the day.

2. Student Loans for Higher Education: Introduction (P.52/2007)

The Bailiff :

Now we come back to Public Business and the next item on the Order Paper is Projet 52 - Student Loans for Higher Education: Introduction, in the name of the Minister for Education, Sport and Culture and I ask the Greffier to read the proposition.

The Greffier of the States:

The States are asked to decide whether they are of opinion to agree that with effect from 1st September 2007 a new student loans facility should be introduced by the Minister for Education, Sport and Culture in consultation with the Minister for Treasury and Resources, and that the loan facility should be available to all students who meet the residential and academic criteria for student grants and who are following programmes of higher education in institutions which have determined to increase their fees through the additional variable fee charges, top up fees.

2.1 Senator M.E. Vibert (The Minister for Education, Sport and Culture):

Before I start, may I first ask you for a ruling on possible conflicts of interest particularly as it may concern Members who may have a young person who has just embarked or is about to embark on a university education as a proposition being debated could alter the support available to such young people.

The Bailiff :

Well, I am not sure it is open to me to give a generalised ruling in terms of Members' individual circumstances. If Members are concerned about their own particular position then they should say so, but as Members will know if the interest is a generalised one shared by a large section of the community I would not have thought that it necessitates any declaration of interest and withdrawal from the Chamber.

Deputy J.A. Martin of St. Helier :

Before we get underway with business and education, as a procedural matter - and I really do not want to hold anything up - when you come to ask if this would be liked to pass to Scrutiny it seems to me we do not have a constituted Education Scrutiny Panel. I just do not know procedurally where that leaves us, Sir, and that is really a question.

Senator M.E. Vibert :

Perhaps I could help in that this is not a law. It is a proposition and the fully constituted Education and Home Affairs Scrutiny Panel issued a statement saying that it decided not to scrutinise this area.

Deputy G.P. Southern of St. Helier :

Nonetheless, is it not possible for any Member to ask the Scrutiny Panel - but there is not one - to reconsider its decision?

The Bailiff :

The Minister is quite right that there is no requirement for the matter to be referred to Scrutiny as there is with legislation, and it is a matter I think that Members can consider during the day as to whether it is desirable to reconstitute the Scrutiny Panel sooner rather than later.

The Deputy of St. Martin :

If it would help, I think the Minister knows that we have already discussed this on our Scrutiny Panel. As indeed is our want on our Panel we discuss every proposition and we inform the Ministers whether we are going to scrutinise or not and we have already informed the Minister that it is not a matter that the former Panel were to scrutinise.

Senator M.E. Vibert :

Can I say how up until now I have had great support and co-operation from the Education and Home Affairs Scrutiny Panel and its predecessor which had a longer name and may I thank the resigning Chairman for his help and support in dealing with that.

Deputy R.G. Le Hérissier of St. Saviour :

Can I declare an interest that I am involved with one of the courses that is the subject of this debate?

Senator M.E. Vibert :

If I can get back to the States' debate on the Introduction of Student Loans, the proposition I propose today is designed as the best solution to an issue that I, and I am sure all of us, would rather not have but are forced to deal with. The issue is the rising cost of supporting local students in a higher education. The cost of higher education to Jersey has risen considerably in recent years due to 2 principal developments. One was unwelcome for Jersey and that in the U.K., where the vast majority of our students go to attend higher education institutions, changes to the funding of such institutions were introduced in the form of top-up fees. The other development we should celebrate, in that we are the victims of our own success with more and more local young people qualifying to attend higher education. As an example, Sir, Jersey had 1,413 students at university last September compared with a total number of local university students of just 568 in 1984. Even given the slightly lower population then, it would indicate that student numbers have more than doubled in the last 23 years with now 44 per cent of local students of any age group going on to university. May I say, when I went away to college in the early 1970s there were far fewer even then; so few that every student was interviewed individually by the Education Committee in the premises at Pier Road. So, as I say, in recent years, pressure on the Students' Grants budget has been increasing due to increasing numbers of local people entering higher education and increasing cost of higher education in general. At the same time, there has been the introduction of cash limited budgets for States' department which take no account of student numbers. This requires my department to work within limits to find before the annual costs settlement with the U.K. has been established and before the number of participating students in any given year is known. This led to a budget estimate of £8.9 million being set for a higher education expenditure in 2005 when the actual cost, because of increased number of students and increases from the U.K., turned out to be £10 million. It is estimated in the same year parents contributed at least an additional £6.5 million. In 2006 the situation was made even worse when the U.K. Government decided to allow universities to increase their income through the introduction of additional variable fees known as top-up fees. Prior to 2006, the additional fee charged by universities had been fixed at £1,200 per annum per student. When this was introduced in the 1990s, the Education Committee of the day met this increased cost within the arrangements for student grants. Up until then, Jersey had managed to support increasing numbers of its young people to university through a partnership between the States and parents, both of whom contribute towards the cost and it is intended to

maintain our grant system, not do away with it. But with rising costs we feel it now needs to be modified and a third contributor - the student - included. The reason this change is required now is that, as I have said, from 2006 onwards universities were given the opportunity to increase their income by making an additional charge of up to £1,800 per student. With the exception of 2 or 3 institutions, all U.K. universities opted to charge the full amount of £1,800. In response, my department worked with the U.K. universities' representative body - Universities U.K. - to negotiate a lower increase for students from the Islands of Jersey, Guernsey and the Isle of Man. The negotiated figure was £1,350 instead of £1,800. Given the already difficult financial situation in 2005, it was clear that it was not going to be possible to meet these additional charges by simply incorporating them into the existing scheme of grant aid as in previous years. The burden on both parents and the States would have been too much. It was also recognised that the students themselves are very much the beneficiaries of receiving higher education in terms of generally higher salaries in the workplace for graduates, and that the introduction of a student loan would also give them a direct personal stake in their own higher education. In view of the above, I as Minister for E.S.C. (Education, Sport and Culture) announced an interim arrangement for the financial support of students in higher education for 2006 and initiated a complete review of student financial

support to be completed in time for the 2007/08 academic year starting this September/October. As this matter is of such importance to students and their parents and the community at large, I also insisted that the review should be informed by an extensive public consultation process. To this end, in June 2006 I published a public consultation discussion paper outlining the problem, also inviting written responses to be returned by the end of August 2006. In July 2006, I held 2 public consultation events at which members of the public were invited to express their views. Both meetings were very well attended with around 70 people attending each evening. A copy of the consultation discussion paper was also sent to Scrutiny. The consultation paper and the public presentations outlined the size and nature of the problem and suggested 4 general approaches which might be considered as potential solutions. It was stressed, however, that the solutions offered were not mutually exclusive and that we were willing to listen to alternative suggestions. Members of the public were, in effect, invited to contribute their own solutions to the problem. The 4 broad options set out for consideration were: (1) increasing States' expenditure on student grants, i.e. the States pay more; (2) readjusting the contribution made by each partner and so sharing the burden of cost between the States' and parents, with the parents paying more; (3) taking measures to limit or reduce student numbers either through restricting the choice of courses available or through raising the academic entry requirements reducing student numbers; and (4) the introduction of a third partner to share the burden of increasing costs - the student as a prime beneficiary of higher education - through a student loans facility repayable after graduation, students to contribute to cost. The outcomes of the consultation were published in December 2006 along with the proposals for a new scheme of financial support for students to be implemented this September 2007. If I can turn, Sir, to the consultation results. At the public meetings the most popular solutions were ranked in order and no surprises as to what was the preferred option, and that was increase States' expenditure; but also strongly supported were student loans. There was little support for increasing parental contributions and practically no support at all for limiting student numbers. That was the public consultation at the meetings; and the written consultation, 44 responses were received, 4 of which were from organisations rather than individuals, and although 58 per cent of respondents favoured increased States' expenditure to solve this problem, 79 per cent indicated that they broadly supported the notion of introducing student loans. A separate independent online survey carried out by a parent's action group - and I thank them for the work they did - which attracted a good number of replies also suggested that within the Jersey community there was a significant understanding of the medium and longer term issues surrounding student finance, and an acceptance that a new scheme of support which includes a student loans facility was a reasonable means of meeting the challenge. Having published the proposals for this in December 2006, further public comment was invited to be received by the end of January this year. Following the publication in December of proposals, there were few comments: 7 in total, 4 of which were broadly supportive and one sought to make the case for allowing students to attend universities outside the U.K., an action that I had already approved. I would like to turn now to the discussions we had with the Student Loans Company and the U.K. Department for Education because in anticipation that the introduction of a student loans facility might be a preferred option to address the problem, officers from my department had held discussions with the U.K. based Student Loans Company to ascertain that possibility. Unfortunately, that option was blocked in December 2005 when the U.K. department involved indicated that it would not support the Student Loans Company's involvement in the administration of a scheme of loans for Island students. That meant we had to look at the development of a potential loans facility for Jersey, Sir. So faced with that refusal by the U.K. Government to enter into a partnership, we looked at what we could do for local students ourselves. An officer working group was established to consider how a loans facility could be established in Jersey. The working group comprising officers from my department and Treasury staff consulted with people from the U.K. who had knowledge of this and developed sophisticated software for assessing potential risks of any suggested scheme. The most difficult considerations were how to set loan limits to ensure that anyone capable of benefiting from higher education would have access to sufficient financial resources to enter university without creating a

heavy burden of debt on graduation; also how to ensure repayment of loans from graduates who might not return to Jersey; and how to ensure that the need to repay loans did not act as a disincentive to graduates wishing to return to the Island. The proposed scheme, Sir, has been developed in consultation with the major clearing banks, all of whom have expressed a willingness to take part and can I, at this point, thank the banks involved for not only their willingness, but their support and eagerness to work in partnership with us on this issue. The proposed loan will be available to all full-time students undertaking courses of higher education and it will be guaranteed by the States. Repayments will commence one year after graduation and students will be expected to repay to the participating bank of their choice regardless of whether they choose to return to Jersey or not. Interest will be set at just 1 per cent above base rate; that is 1 per cent above base rate. Currently base rate is 5.5 per cent, so the interest charges payable by the graduate, if the scheme were in operation today, would be at a rate of 6.5 per cent. This would mean if a student took out the maximum loan of £1,500 a year for all 3 years of a normal degree course and decided not to make any repayments until a year after graduation, the monthly repayment for the next 5 years to pay off the loan would be around £100 a month or about £25 a week. The development of a student loans facility as described here should be viewed as an additional optional support for students and their families who are facing increasing costs of higher education. It is not compulsory; it is up to students and their families, if it goes through, to decide whether they want to take out the loan or not. This scheme, along with the existing arrangements for means-tested support for students and parents for both tuition and maintenance costs, meets the objections of ensuring that all who can benefit from a higher education are able to do so. The scheme also helps to lighten the load for parents who already make a large contribution to the higher education of their children; introduces a third party to share the costs; does not place an unacceptably high burden of debt on new graduates, and does not act as a disincentive to return to the Island. Indeed, it may encourage more students to return on graduation for a number of reasons, for example local salaries are generally higher. According to the last survey results available, some 62 per cent of local graduates returned to the Island to work within 10 years of graduation. I believe it would be a good thing to see this figure increase and if States' Members approve the introduction of this student loan scheme today, I will be exploring - and have already started exploring with the

Treasury Minister - ways in which incentives could be built-in for graduates to return to the Island. This could take the form of some sort of tax relief on loan repayments for graduates returning within a certain time for instance. Also when graduates were questioned in the survey I referred to, as to the barriers to their return to the Island the number one concern was the cost of housing and, again, I would wish to explore ways in which housing could be made more easily available to returning young people. I hear the Housing Minister saying it is in his plans as well; we speak as one. If I could turn briefly to the position with regard to Scrutiny which was raised at the beginning of the debate, both the initial consultation discussion paper in June 2006 and the Minister's proposals - my proposals - in December 2006 were sent to the Education Home Affairs Scrutiny Panel. In March this year, however, the Panel announced that the proposals for a higher education funding would not be reviewed. The then Panel Chairman, -the Deputy of St. Martin - told the States in a statement that for a number of reasons the Panel had decided there would be very little benefit in undertaking a general view of my proposals. These reasons included the fact that the optimum time for review would have been at the time of the issue of the green paper, the June 2006 consultation document, but unfortunately at that time the Panel already had a full work programme and did not have the capacity to undertake such a review. He also stated that there was not realistically enough time for a meaningful review of the proposed introduction of student loans, but that the Panel will keep a watching brief on the student loans itself as it develops and will monitor the effect of its implementation on the students and their families, which of course my department will be doing very closely as well. Scrutiny also referred to a number of other issues relating to student finance which are also under review, such as the definition of the family for means-testing purposes, and I can assure Members these issues are being actively worked on. If I can return, Sir, to developments since the lodging of the report and proposition and to address student grants and

top-up fees, the current agreement with Universities U.K. on student grants and the top-up fee is determined according to a formula which is based on the teaching grant given to U.K. universities by the U.K. Higher Education Funding Council. Generally speaking, the teaching grant increases in line with U.K. inflation annually. The settlement is usually announced in March or April each year and by the beginning of May the implications for the Island are known. At the moment we know that the increase in fees in 2007 will be 2.7 per cent and we will be publishing the definitive figures this involves shortly. The implication for the student loans element of the arrangements is that the top-up fee - the student's contribution - is likely to rise from £1,350 this year to £1,375 in 2007; a rise of £25. The loans facility of £1,500 agreed with the major clearing banks is more than adequate to support this increase. The proposed loan arrangement sets the interest payable, as I said, at 1 per cent above U.K. base rates. The Bank of England increased its base rate figure in May to 5.4 per cent making the interest rate payable by students at the moment to be 6.5 per cent. This was anticipated when the report and proposition before Members was lodged and, therefore, the details of the scheme as described in the report in proposition are at current rates. I should refer, Sir, to the position of the Islands with respect to the recent U.K. decision on overseas territories relating to students attending university. The Island authorities in fact led by Jersey, and with Guernsey and the Isle of Man agreeing, made representations to the U.K. to be treated similarly to British Overseas Territories when the announcement was made that E.U. (European Union) citizens living in E.U. overseas territories would be treated as E.U. home students with respect to financial support. The U.K. Government agreed to review its arrangements and having completed that review the U.K. Higher Education Minister has indicated that he is not willing to treat Island students on the same basis as students from overseas territories. My department is currently working with the other Islands and the Chief Minister's Department determining when and how to make further representations on this matter. I think, Sir, it is important to look at how other jurisdictions have addressed this problem and if I can turn to Guernsey first, who are very similar to us. Initially Guernsey considered developing a very complicated student loan scheme which involved the replication of the U.K. scheme through the creation of a Guernsey student loans company whose assets would be the student debt. Under this scheme, the loan would have been made directly from the Jersey States' Treasury and would have been set at about £5,000 a year, not £1,500 which we are proposing. Analysis of such a scheme by my officers suggested that it would be costly and bureaucratic. Guernsey has since abandoned this scheme and is now considering other options. We have supplied details of our proposed scheme to our counterparts in Guernsey and it is understood the Jersey approach is attracting a great deal of interest as they wrestle with the same problems faced by us. The Isle of Man has not announced plans to introduce a scheme of student loans at the moment although officers from there have kept a watching brief on events in Jersey and Guernsey, but the Isle of Man - like the other Islands - is faced with the pressure of mounting costs. However, unless they introduce an alternative strategy such as the development of loans scheme, the Manx Government will be required to invest and pay more in order to maintain their present arrangements. References are often made to the position of U.K. students who only have to pay home student fees, but it is interesting to look at the U.K. arrangements, Sir, and that

U.K. student loans are available for tuition which at the moment for 2007/08 is £3,070 and they are also able to obtain a student loan for maintenance of £3,385 and another 15 per cent on top of that for students on very low incomes. So the loans that U.K. students can take out are £6,456 a year, not £1,500. So for the average 3-year degree course for a U.K. student, if they take out that full amount, it will be £19,365 and although repayments attract no interest and U.K. students only start repaying after they have reached a certain amount of income - a very low income of about £15,000 a year - they come out with a debt of nearly £20,000, which led to a debt of between £5,000 and £6,000 under our scheme. Sir, if I can conclude, we, like every other community, are faced with the reality of the rising costs of higher education. Very full consultation has been carried out on this issue. There was overwhelming support for continuing to support local students in higher education and not prohibit their ability to attend by financial constraints. It is vital for the future of Jersey that we continue to encourage our young people to be as well qualified as possible and do not put any disincentives to them returning to the Island. There was also a strong majority acceptance, albeit reluctant by many - including myself - that the way to achieve this was by the introduction of an optional limited student loans scheme. Sir, such a scheme as I am proposing will ensure all local students can continue to access places in higher education with a reasonable contribution from the States, parents and the student themselves. I make the proposition, Sir.

The Bailiff :

Is the proposition seconded? [Seconded]

Deputy G.P. Southern :

Yes, Sir. Can I ask a point of clarification of the Minister, Sir? He referred to a substantial number in favour of this second option. Could he tell me what percentage that was?

Senator M.E. Vibert :

In the proposition it referred all members to R.98 which was the Financial Report for the Students in Higher Education Proposals published on 20th December 2006 which contains all the data, and the data is in different forms, and if the Deputy would like to read through it he will see that different questions were asked and different percentages were given whether it was the parents or from someone else. If I have time, I will pass him a note with the page number.

1. Deputy C.J. Scott Warr en of St. Saviour :

I will be supporting this proposition. On page 5 it does say the facility will need to cater for students following 4, 5 or 6-year courses so I have a question to the Minister. What happens when a graduate who obtains a first or a high degree grade wishes to continue to do a M.Phil and a Ph.D? After that 3-year period will additional time be allowed to continue these studies before repaying the loan or would such graduates need to look for other funding? It is never ideal for graduates or anyone in work to have to repay money at the start of employment. This does seem to be though, for Jersey, the only viable option for Members to endorse and, as I said, I will be supporting this.

2. Deputy P.V.F. Le Claire of St. Helier :

I would just like to say that I think the efforts and way that this has been done on behalf of the Minister and the Assistant Ministers for Education is it seems there is obviously more to be heard, but it appears to be a model that should be congratulated. During the elections for Senator that I was unsuccessful in, I was at Grouville when somebody asked a question about whether or not we thought we should be supporting student loans and it had not really been something that I had given much thought to. But as the questions were being answered I stood up and said that I supported the idea that students should be able to have the facility of a loan to help them gain a higher level of education and it did not meet with much favour from the person that put the question and I sat down a bit miffed because I thought people would have been in favour of it. So I was glad that the Minister has explained the consultation process that took place and the rating in preferential order as to what people wanted and also the opportunities that people had in respect of coming up with their own solutions. I think that if one does qualify with the higher level of education as Jersey students consistently do, then their ability to enter the workforce at a higher level, and thereby having the opportunity to repay any loans, is much greater than the situation would they place themselves in if they left school and tried to enter the workforce at the lower levels. I certainly have had experience, albeit a little different. I went to a continuing education within the Armed Forces, but I did think that had a facility like this been available perhaps for myself or my brothers then perhaps we might have gone on to higher levels of education. When a family is financially limited the options for the siblings are also limited. It is a great pity because I remember that although some of our opportunities were limited, they were not limited for my mother's family especially who were extremely highly educated, and to find yourself in a situation

where your predecessors have been extremely highly educated and then you cannot take advantage of those higher education facilities due to financial difficulties or arrangements because we had a large family and a low income We did, however, manage to enter significant levels of appropriate work in our mature lives. But I do seriously believe that although it may be a bit of a burden for students to pick up a loan at the end of their education, I think the education itself will give them that ability to meet that burden much more effectively. I would like to really congratulate the Minister for coming forward which in some certain circumstances some people will not favour this. I think it is probably the right thing to do. My only concern is that perhaps we need to be looking at assisting the Education Minister and his Assistant Ministers in trying to think a little bit more creatively to help them with different ways of tackling this issue and I am sure collectively with the expertise that is within the States, we could possibly come up with something in the future that could be made a little better. What I mean by that is there really does need to be some ongoing thinking, if this is approved today, about the rates of repayment and the interest levels. We have some investment experience within the States Assembly and I am sure we are going to hear from those people; we have some teachers within this Assembly and I am sure we are going to hear from them as well. The rates and repayments that were mentioned by the Minister - albeit that I would say are pretty normal and not horrifying - still do add a burden to the repayments but, as I say, you know, I want to make that quite clear, the burden is much, much more than outweighed by the benefit of the individual to have that certificate and to enter the workforce and pay it back. So I would like to applaud the Minister and his team and his officers for coming up with something that is perhaps not what we really wanted at the end of the day but the world has changed and we have got to make sure that we support the pupils; and we do not want to reduce the numbers of people going on to higher education. I once had to make an appeal for somebody that had not managed to qualify for the numbers that were allocated. The appeal was successful and the individual went on and is extremely talented, passed out extremely highly in his field, and is now working at the top levels of his field in the United States and making a very, very good living for himself and making things that we all watch on a weekly to monthly basis on television. The fact that the Education Department does look at these things seriously; they try to offer the opportunities to the individual pupils, but there are limits. I think we need to make sure that those limits are not increased. We have to fight off the notion that we should decrease the amounts of people that can go on to further education and we have to safeguard the types of education that those people seek to achieve. We should not be saying, you can only do this course and you can only go to this university. We should be able to say, we will give you as much help wherever and whenever we can. I certainly do hope that States' Members will pull together because they are the future and there is some great expertise in this Assembly. Let us get together, work with the Minister and try and come up with a plan - a financial structure - that will reduce the repayments of these loans if

they are needed in the first place.

3. Deputy R.C. Duhamel of St. Saviour :

I would like to take up where Deputy Le Claire left off. While being broadly supportive of the move towards student loans, I think it is the way of the world and we cannot bury our heads in the sand and ignore decent practices and workable practices for paying for further education that are workable in other places. So, I do support the Minister for bringing forward these proposals. However in terms of interest being put on to the loans I think we have missed a bit of a trick. If we look at the figures that the likely loans are due to come to - this is on page 5 of the report - we are talking at 2007 prices by 2010 a potential liability to the States of £4.6 million moving up to a peak of around about £8.9 million by whenever the period is after 2030 or whatever. If we do the division sums and divide by assume that everyone is going to be on £4,500 maximum loan, I assume that is how the department have worked out their figures, that is getting on for 2,000 people taking out loan facilities. Now, that does not worry me very much but the key issue really is the amount of interest that would accrue on that figure. At the 5.5 per cent rates that we are talking about at the moment, that really comes to around about £250,000 on £4.6 million and by the peak

period that amounts to £490,000: just under £500,000. Now when I think about the various practices within the States Chamber in terms of our spend on this project and that project, I would just like Members to think about how little or how much this figure represents. Certainly to a student who is moving into work adding interest at any particular rate is going to be an extra burden as Deputy Le Claire referred to. So my question really is to the Minister, if we are looking at ways of tinkering with the scheme and making it a little bit more equitable, what is the actual cost to the department? What could it be? It is the cost of another EDAW report. We spent £240,000 on a planning document, we are likely to spend equivalent sums as the time goes on other important documents, but we are talking £250,000. It does not seem like a lot of money and I am really surprised that the department and the Minister have not really looked into whether or not he could commit to a scheme as he indicated along the lines of the U.K. one where he is suggesting that the students do not pay interest on their outstanding loans. I think that would have been a Jersey way - a better Jersey way - of dealing with it while still maintaining the ability of the department to enter into the loans. We would be moving to give students a greater chance to start on their own feet but at the same time giving them a bit of an extra helping hand at what I would consider to be a minimal extra cost to the Exchequer. We do have quite a lot of other examples whereby monies are written-off out of the system in terms of mortgage interest relief or relief on mortgages, and if we look at the figures for the Homes Trust, for example, we have given away millions of pounds because the States pay the difference between - on the old contracts at least - 4 per cent on the current market rate. Now, at the moment the current market rate is 5.5 per cent; we are paying a subsidiary to the Homes Trust of 1.5 per cent on all the millions that we have given them. It seems to me that we could be a little bit more generous and I am heartened by the Minister's suggestion that perhaps this is not the final document that is going to outline the scheme and that perhaps there is an opportunity - perhaps with the Treasury Minister - to take a second look as to whether or not some of the monies that we do have in our coffers, the Rainy Day Fund' or whatever we call it these days; the Strategic Fund or whatever it is called - the Stabilisation Fund. I am not quite sure where we are at the moment, it is only down to name, but I am pretty sure that certainly with the monies that are being invested I asked the Treasury Minister yesterday what we had received by way of income on the monies that we have invested on our capital funds and he said around about 6 per cent in income. Of course, you have to take all the expenses out of that and that does not add up to the capital amount of monies that you are putting back into the scheme which once you have discounted them due to inflation and everything else will be substantially less than the 6 per cent. So I think the key message that I am trying to put across is that I would urge the department - and not only the Education Department but the Treasury Minister's Department as well - to enter into a second round of talks to see if we could perhaps find a way to offset the interest charges and give another encouragement to our students who, once educated, we wish as many of them to come back to the Island. Perhaps, Sir, this could be one way of doing it. Otherwise, Sir, I support the scheme

and hope that these revisions can be made. Thank you.

4. Deputy K.C. Lewis of St. Saviour :

Studying the Minister's papers I see that a student taking a 3-year course will have a loan of up to £5,000; with interest over 5 years repayments will be £6,240. So, I am presuming that if a student was taking a university course such as a doctor - say over 6 years - the repayments over the 10 years will be in excess of £12,500. I wonder if the Minister would confirm that. This would be an extreme burden for a young person leaving university and starting a professional life. I would support the zero interest repayments, also tax breaks for returning students I think is an excellent idea, and would certainly be welcome. I am concerned that Jersey not being a full member of the European Union, but obviously we have a link through the United Kingdom under Protocol 3, I find it bizarre that the U.K. treats us as an overseas territory. Would the Minister confirm whether negotiations with the United Kingdom Educational Authorities are ongoing regarding this? I have parishioners, both with second and third children who wish to go to university, have had to tell the third child that: "I am sorry; I just cannot afford it at the moment." There are at present many Jersey students in the United Kingdom who are taking out loans in the U.K., probably at far higher rates, so I will be supporting this proposition. Thank you, Sir.

5. Deputy S.C. Ferguson of St. Brelade :

I would bring a note of caution to this. The U.S.A. for years has had a student loan system. In fact, they also have a system whereby a number of the jobs on campus are all done by students to earn extra money. I used to grade papers for professors for extra money too. But the U.S.A. has had trouble with defaults, and they have had to rethink their scheme. I am concerned about this. What provision will the Minister be making for repayment for students who for whatever reason do not finish their courses, who leave the university after about a term, or a year? What are the assumptions underlying the possible cost of defaults? I mean, are they realistic? When the Minister mentions risk in this proposition, note 3 on page 5 for instance says: "Do not materially increase risk to the States" but as I understand it - and perhaps the Minister would explain it - I think all the risk is being carried by the States. It certainly will be under the guarantee scheme. I was disappointed to hear him talk about the U.K. reaction to the dependent territories, i.e. the ex- colonies being given preferential rates. It does as a slight non-sequitur occur to me that the U.K. are happy to lean on us in financial matters, but it is not good enough. If they lean on us in one direction, they must make provision for it in others. I hope the Chief Minister and the Treasury Minister will note this. Basically I am happy to support the further education of our young, but again a cautionary note. I question some of the more outré of the subjects studied. We do our young a disservice if they end up with a qualification which is merely a paper on the wall and is no use to them in the wider world. I will, in fact, support further education, but as I say I would like to see the various controls and so forth added to this, because I am worried about all the risk being carried by the States.

6. Deputy J.A. Martin:

[Aside] I think I probably will be minded to support this, but I do have a few very simple - I hope - questions for the Minister for Education. I would like his explanation on the further points that were put by Deputy Duhamel. I have concerns over the one year; how rigid will that be. Some students like to take a year out, but then the first year that they are back they will have to start paying back loans. I live in the real world; I know that these loans have to be paid back. The second question on page 5, and the Minister did say in his speech, Sir, that this may encourage students to return to Jersey. I might be misunderstanding the question but it states: "Starting salaries for Jersey graduates in 2007 are £23,250." I know these are estimates, but could the Minister inform if that is a Jersey graduate coming back to Jersey, or an average wage for anyone who graduates, being it a Jersey or a U.K. graduate working anywhere else presumably in the U.K? The Minister may not be able to answer this, and it may well be in the consultation documents, and I follow on from Deputy Lewis , the cut-off and how I read: "Parents whose income is in excess of £51,440 [and it may sound a lot] will receive no support towards maintenance and will be required to make contribution to tuition fees", which we now know in Jersey will be £1,350. Then you have the highest level of maintenance to low income families with less than £26,750 will be maintained at £5,000, plus obviously they can apply for the student loan fees. I am just curious to know in the next page - on page 7 - where we have all the student numbers, what the actual breakdown is. Of course, anyone looking will know, and we hear this on different things: "People earning x amount should not be getting any help." But is this a family with 2 parents earning about £25,000 each with 3 or 4 children? Is any of this taken into consideration? Then the low income family; is it one parent with one child? Does this make any difference to our student numbers? I think if the actual basis is not right, Sir, whatever the loans be, we could be missing a very I would call middle earners' children who will be debarred because of the extra cost. We may say it falls on the student; we have had the speech, it falls on the student. Well, many of us have children, Sir, and any way we can we always like to help our children out. So, I would say a majority of this will fall back to the parent, rightly or wrongly. What I am saying is, Sir, I would like those questions

answered. I still hopefully will be able to support it, because it is just in principle, but then again we do have P.53 coming up, which is basically I suppose putting it in law from the Treasury, or giving us permission through the Treasury proposition. So, as I say, I need to be convinced that nobody would be disbarred on those incomes around that and the amount of children people have. On the figures again, when we listen to the amount of people who are now in Jersey, and who within the next maybe 10 years will want to send their children to university, are we working with the same figures that we were working with when this went out to consultation? Lastly, I would just like to point out, Sir, the Minister informed the Assembly that this was totally supported by the former Education/Home Affairs, whatever Panel it was called, but there were 3 bullet points that said with the workload that Panel had, with the time, and given that there was public consultation carried out, and some evidence results  have been incorporated  in the background papers, the Scrutiny Panel then as constituted decided not to review this. But, as I say, it has not been given a clean bill of health; there were reasons why this was not reviewed. So, as I say, I look forward to the answers from the Minister, and if they are slightly more detailed than he can provide, maybe his officer outside can let him know. Thank you.

7. Deputy C.F. Labey of Grouville :

I would firstly like to state that I have 3 teenagers currently in local schools, so I come to this debate with a very heavy heart. Having gone through the reasons, and the public consultation periods, and having analysed the details to reach this point, Education, Sport and Culture had various options that the Minister has already outlined, none of which are palatable. Frankly, I wish the U.K. Labour Government had not decided to take this route, but they have. The parents' preferred option of asking the States for more money would have amounted to £3 million per annum and rising. While as a parent this option is very tempting, as a responsible States Member I have to ask: "Is this the best use of £3 million year on year, where only a fraction of the population is going to benefit? Or is this money perhaps better spent on good quality nursery education?" These are the sort of decisions we have to make, and they are not easy. If there is to be a benefit to this proposition, it is that it will give Education, Sport and Culture, the Treasury - and Housing, and I am delighted to hear the Housing Minister being supportive of this - the opportunity to set up incentives to encourage our local graduates to eventually return to their Island. To take up Deputy Le Claire's suggestion for more creative options, I would like to see large Jersey companies, international companies that do their business in Jersey, even smaller ones who make a very nice living in this Island, do more. Some of the bigger firms with multi-million pound turnovers offer one or 2 bursaries per annum, and then ask for many, many more (j)s to complement their workforce. I would ask them: "Is this really enough?" I would perhaps quite controversially like to see an employment levy introduced to encourage bursaries and training, because I really feel that firms that make their living out of this Island - a good living - are going to have to start to contribute more to the workforce that they employ. .As I said, it is with a very heavy heart I come to this debate, and I am reluctantly going to support the proposition, but I will be pursuing the incentives, and an employers' contribution to the Island's local workforce. Thank you, Sir.

8. Deputy P.J.D. Ryan of St. Helier :

First of all I have my youngest child still at university, so I do need to declare an interest. So, having said that I will make my speech, Sir, if that is okay? Returning students over the long-term are usually the highest tax payers, the most pro-active wealth creators, the most prolific job creators and employers. These are the reasons why they are subsidised from central taxation. It is interesting that I follow the Assistant Minister for Education, and I noted her words: "A tiny minority benefit." Sir, I do not believe that is true. I think we all benefit; we all benefit. I believe to say anything else is short-sighted. Are we sending out the wrong message with this proposal to returning graduates? We already have a cost of living equivalent to Central London. We tax single people higher as compared to their disposable income. Now, this may be okay for wealthier families; single university returnees can usually stay in the larger family homes. But what about

those from poorer families? Now, we see in this report from the Education Minister and from the Treasury a lot of research, but a lot of research basically on the financial implications to the States. But where is the research and comparisons with other countries? The current level of student debt even now using existing loan schemes available from the clearing banks; where is that research? How long does it take the average student to pay it off? Will they still be paying off loans in their mid-30s, as often happens in places like Germany and other places in Europe? What might be the longer term effects on delays to starting a family if that is true? How much do poorer kids have to take, already, part-time work now to get by? Where is the point that that extra working to get by starts to affect their studies? So, Sir, I am disappointed that the relevant Scrutiny Panel does not seem to want to know these answers, and other questions, any more than the Council of Ministers seems to want to know. There is, as I said, plenty of research into the financial implications to the States, and to parents, but there is little on the longer term social implications. Again, we all know that wealthier parents will probably stump up the extra amounts required - and quite frankly, if they are anything like me, are unlikely to want repayment - whereas poorer young people are the ones whose existing debt probably will become worse. So, yes, there is a case for a contribution from the future higher earners. I will accept that. These are the ones that benefit from a university education personally, yes. But to what level and how much are the poorer ones already contributing anyway? Why can we not look at means testing on the same basis as already exists, perhaps even lowering interest rates still further, and even below cost, for the really low income families. We see high infrastructure investment, and rightly so, in education. But are we dealing with the one to one difficulties as well as we should in our education system; I put that to the Education Minister. What will happen in the future? Will the convenient existence of a loan scheme be used by the Treasury to reduce or hold the education budget in the face of further cost increases? Sir, I reserve judgment on the way I will vote on this, and I would urge other undecided Members to do the same. I would like to hear from the Education Minister, or even from Scrutiny, as to whether he will carry out more in-depth research on the longer term social implications of this scheme. Are we yet again just following the U.K. blindly with an unpopular scheme in the U.K? Is this what we do in Jersey? I hear it time and time again from Members that we should not be doing that. But are we not doing just that in this instance? So, it is not what the parents think, but what in reality happens that matters, and is likely to happen, to our young people by increasing their debt levels. Sir, I wait and I hold my breath to hear what the Education Minister will say in his

summing up, and I wait to see how I will vote. I urge Members to do the same. Thank you, Sir.

9. Deputy A.D. Lewis of St. John :

I am going to take a slightly different tack here to Deputy Ryan. I happen to think that student loans are an excellent idea. They have been in place in many other jurisdictions across the world for many years. I accept though that maybe we have not researched that as much as we could have done to see what the effect of that has been. What it also does, it makes students take more ownership of the courses which they embark upon. It will encourage more students to embark on courses that are more likely to lead to employment upon graduation and often at higher salary levels. As our fantastic education system continues to produce greater numbers of successful A level' students who wish to go on to higher education the cost of this success is simply not sustainable, neither is the increase in costs affordable to many parents. I therefore commend the work that the E.S.C. have done on this important issue and I would urge Members to support the proposition. I do, however, have a few questions of the Minister. How was the maximum figure of £1,500 per annum derived? Thinking back to my own college days, to some this would just about pay their bar tab at the Student Union each year. Surely a family that is earning over £51,000 with 2 children in higher education may well need access, or their children need to have access to greater sized loans, provided that they can be guaranteed and sustained, and paid back later on. I would like to know whether the Minister plans to review that figure at all, because it seems fairly low to me. If the students do default, will the period be extended for them to repay the loan? I know there are some figures given in the projets, but if they default over a long period, will there be provision

allowed there for them to pay it back? I believe in the U.K. there are longer periods of time allowed for paying back the loans. Or will we simply be writing it off? I realise that there has been a figure derived at, some £275,000; the predicted number of debts that may have to be written-off. Will students who choose to study in other jurisdictions, such as Commonwealth countries, be eligible both for grants and loans, as an increasing number of our students are going to study particularly in Commonwealth countries. I also want to pick up on a point that Deputy Labey mentioned, and I would very much urge the Treasury to have listening ears on this one. Sorry, the Deputy of Grouville , I beg your pardon, Sir. That the Treasury Minister should perhaps consider further incentives for businesses to offer more bursaries, and perhaps guarantees of jobs upon graduation, not necessarily just in Jersey, but in their sister and parent offices across the world, perhaps with an incentive to then return back to Jersey with even greater skills and experience. I think there is a real opportunity there with the international companies that we have in Jersey to do that. Some do it already, but I believe if they were encouraged through incentives to do more I think an awful lot could be achieved in that particular area. However, Sir, on balance, I commend the work done by E.S.C., and I would urge Members to support the principle of the student loans. Hopefully, it will be an evolving developing process, and we will be looking at this again in perhaps a year, or 2 years time, and re-evaluating the figures and revising them. But for a first starter, I think the E.S.C. have done a fantastic job here, and it is time to move on towards student loans and ensure that our young students have the opportunities to go overseas and to the U.K. and study without having to worry about how it is going to be funded. If they qualify their salary levels hopefully will be much higher, and I think the burden will be negligible in this particular case, giving an example of it costing them only £100 a month. Thank you, Sir.

10. Senator B.E. Shenton:

I would like Members to cast their minds back to approximately 12 months ago when the Education Minister did lodge a proposition to bring in top-up fees last September with no loans scheme in place. This caused a great deal of distress to the public, and especially to lower earning families; they just did not have the money to pay the top-up fees that were being proposed. I brought amendments to that proposition and subsequently the proposition was withdrawn. I have been working, together with Dr. Nigel Minihane, and a number of other people, over the last year or so giving input to the Education Department on this issue. In fact, it was the Jersey Evening Post that phoned me one day to talk about this, where Nigel Minihane's group did not have a name, so off the top of my head I called it the University Funding Action Group, without giving it any thought. Then it was published as U.F.A.G. in the paper. [Laughter] But we have had meetings with Education, and although a number of Members have been disappointed that no scrutiny has been undertaken on this issue, may I assure them that scrutiny has been undertaken on this issue, but not through the normal channels. The University Funding Action Group, as I am sure the Minister will confirm, has done a considerable amount of work on this issue, looking at the effect, not only on the parents, but also the effects on the students, and is very wary of the effect the students will leave university with an element of debt. I personally believe that the level of debt that we are looking to leave the students with is acceptable, and it does give the students some responsibility as they start off in life. You must remember that the States will be heavily subsidising those students that do come from lower income families. Those students that do have wealthier parents, the parents will be paying substantially more towards their university education. This loans system is mainly about top-up fees. So, I will be supporting the proposition. I think it is a good compromise. It is not perfect. It has been forced on us by the U.K. Government, and I will be curious to see whether the Education Minister gives me any thanks during his summing-up speech. [Laughter]

11. Deputy J.B. Fox of St. Helier :

I am not going to speak on behalf of my Minister, but as a fellow Assistant Minister; and much of what the Deputy of Grouville says can be echoed by myself. The Assistant Minister has been supporting our Minister in broadening the horizons of opportunities there are for looking at alternatives, but one of the things that we must recognise is that we were dropped into this very unfortunate situation by the U.K. Government. We went then through the various processes to try and resolve the problems, one of which is obviously through the Student Loan Company. The problem there is that they seem to have had a lack of communication with their masters, i.e. the Education and Skills Department in the United Kingdom, who when consulted at the appropriate time, just said: "No" without any further issue. From the time when I was Chairman of P.A.G.E. some 12 years ago, which is a Parent Action Group for Education involving the P.T.A.s (Parent Teacher Associations) from around the Island. The one thing at that time which was then and still is very important now, is that you cannot change systems for financing which involves parents, or other people - other than obviously government - without it being well thought out, with a lot of time being spent into it, and a long run-in period. The unfortunate thing for the Education, Sport and Culture Department last year was the run-in period was less than a year, and it was totally impractical, and this has already been mentioned by Senator Shenton. The proposition was returned and, working with the Treasury and Education, Sport and Culture, alternative routes were examined and had to be brought into being in order that we can ensure that not one of our young people would suffer as a result, which I think we all agree is extremely important. On the other hand there are a lot of other things that have been brought up, which I do not plan to go into any detail at this moment in time, which could provide future prospects for our young people. We must not forget that our young people are the future wealth and probably the most important asset that this Island has, apart from water, which we discussed yesterday, because without it we will not survive and we will not prosper. The simple way - and which we have been very good at in the past - is just to bring in our education which is being paid for by other countries, or other organisations, and we call it (j) Category. What is happening is that without proper succession planning for our future we will end up with a huge population increase of (j) Category, but a very

poorly qualified local workforce who will tend to drift out of the Island and not return because they do not feel part of their Island. Therefore, we should be proud of the education system that we currently have, but we have also got to recognise that education, like health and social security, is probably the most expensive part that the States have to consider when juggling budgets. When you get a single item discussion, quite rightly, parents, students, and everybody else, say: "Well, it is only half a million. It is only £1.5 million. It is only £3 million, why cannot you just pull your belt in, take away some of the Civil Service, or others, and find the money?" Well, I have responsibility under Education, Sport and Culture for the Youth Service. That is probably about £1.5 million a year. Then we have got our cultural aspects with the Heritage Trust, running libraries, and everything else, and that is without going into our education core responsibilities of our schools, Highlands College, and indeed further education, higher education. The skills base that we are recognising is probably the most important thing that we have got to get to grips of

The Bailiff :

Deputy Fox, I am sorry to interrupt you, but the Greffier draws my attention to the fact that the Assembly is no longer quorate. Perhaps I may ask some Members in the precincts to return to their seats, otherwise the debate may have to come to an end. You may continue.

Deputy J.B. Fox:

Obviously my speech is having an effect on the audience. [Laughter] I am glad you have still been listening to it from outside. Therefore, this current predicament that the Island finds itself is being forced on us from outside. It is being well scrutinised by very many parents. Unofficially by the Scrutiny Panels that I know have looked at it, and by various student groups who it also affects, and future student groups. Therefore, I think the point that I would like to conclude by is to say this is the immediate response to an immediate problem, but this is not a problem that is going to be left here. I know that the Minister, and certainly his 2 Assistant Ministers and the department, are working very hard at finding a broader base for the future well-being of this Island in its education of its young people. I have got no doubt that alternatives and additional viewpoints will come to the fore which will help us to make a much more successful future education system to improve our workforce and provide less reliance on bringing in people such as (j) Category when we should be educating our own to fulfil those experienced and senior jobs, along with all other aspects within the skills base within the Island. Thank you, Sir. .

12. Deputy P.N. Troy of St. Brelade :

I accept that the higher university costs have been passed on to us by the U.K. Government, and we have not had the funds in our education budget to take this on ourselves. So, what we are doing here, of course, is passing the fees over to the student. What I hope is that this is not the thin end of the wedge. I hope that in the future we do not see that a higher proportion of fees might be passed on to students, because I think there could always be the temptation for Education to leave their grants at the same levels, or not increase them by inflation and so on, so that you would end up with a real drop in the grants available in real terms and then students would be picking up higher levels of fees. I think that is something I would hate to see happen. I would hate to see this become a mechanism for us to take more and more money out of the student over future years. I hope that the Minister can confirm that there are no intentions to pass further costs over beyond this sort of limit that has been put in at the present time. This interest is going to be charged at one over base, and really is there not a way that we can do something where it is cost neutral, or at a very low cost to the student. Again, I recognise that that would involve perhaps some additional subsidy to that rate, which would have to come out of our budgets. But, really, I feel that it would be useful if we could organise this so that students are not paying interest on top of the money, if it is at all possible, or certainly if possible at a very much reduced rate of interest. But I do also see the opportunity of looking out into the future of perhaps expanding the scheme so that in future years loans could be made to students and perhaps to parents guaranteed for the element that is not covered by the grant. I mean there are many families around the Island who do not qualify for the full grant. What is happening, as Senator Shenton found through that group, there are many people who do not receive the full grant, and there is a financial cost passed on to the family, and some families, especially those with more than one child, find it very difficult to cover all those costs. This scheme in the future could be expanded to become a full scheme which would take account of those who do not fully qualify on the grant side. Certainly, I know that there are many families

who find it a strain when they have got several children and they have to fund the fees themselves. My daughter, for example, is at Edinburgh University, she is studying Japanese  [Aside] [Laughter] there, and I think that it personally cost me probably £13,000 to £14,000 a year to send her there. If she were on a medical course it would be even more. Those can be up to about £30,000 a year I think. [Aside] [Laughter] I understand medical courses are very expensive to attend. I am very proud of my daughter; she is doing very well there. But I think that there are ways that this scheme could become something better than it is. It can be a starter to take things out into a wider area. As long as the burden is not pushed on to the students to a greater degree; that would be my main concern.

13. Deputy G.P. Southern :

How glad I am to be alive in today's new Government - Ministerial government - which is joined- up and working to a co-ordinated Strategic Plan. If only! If only that were the case, it would indeed be a rapturous day. However, we are obviously not. Strategic Plan, strategic aim 1.4: "Maximise the potential of the Island's workforce." Strategic Plan, aim 2.6: to "Produce a skilled, motivated and qualified local workforce able to meet the Island's economic and social objectives and reduce our demand thereby for imported immigrant labour." What is before us today? Is it joined-up? Does it attempt to achieve either of those aims? Or does it in fact get in the way? In particular, for the high skilled university graduate sector of those 2 very laudable aims. Does it get in the way? Of course it does. As a young person considering higher education, perhaps the first in the family to attempt to get a degree, to get a higher qualification, as I had that opportunity 30-odd years ago. As far as I know in my extended family, including all the grandparents, aunties and uncles, cousins, et cetera, the first one into university, back in the 1960s. It was a significant element. If then, or if today, that person is facing the choice of: "Shall I go off and maximise my potential? Shall I go off and undertake a graduate career?" If I was looking at these sort of figures, but I had to take on debt, and pay it back at an interest rate of 6.5 per cent, at least because it is going to go up in this coming month, make no doubt about it, it will have to be adjusted and had to take on a loan of up to £5,000, would I have gone? Would I have gone? It was hard enough having to write home in those days and have my mother send me a £20 note through the post, if my father had had some overtime in the month before and there was something spare. If I had equally been offered this as the opportunity of the way forward, take on what looks like a substantial loan for a 17 year-old, would I have taken that challenge as the alternative? I do not know. Perhaps like many I would have been put off. Maybe the cost would have been too risky for me. Let us go out and take an apprenticeship which was the alternative at that time and give up thoughts of this. That will be the effect in many, many households, particularly among those who do not have relatives - parents - who have already got a degree. Make no doubt about it. The Minister seemed to suggest that this would not affect take-up, and further said: "And it might encourage people, university graduates, to come back to the Island because our earnings in the Island are in general higher than in the U.K." Given that this debt is repayable within 5 years at that interest rate wherever you are to the bank concerned, so there is no motivation to come back, I doubt that that will happen. This is not intended to produce a greater than the 62 per cent return we currently get. So, it will not achieve that either, and to pretend otherwise is just completely false. If this scheme, as proposed, had already negotiated a tax release for returnees, or the housing advantage in some way, if that had already been negotiated, and was contained here, then perhaps I might be encouraged to vote for it, because that would be at least attempting to meet those aspects of the strategic aims, and may have encouraged a few more returnees earlier. But it does not. It is the usual: "We will sort this out later, do not worry, we will have something in place some time down the line." In the meantime we are asked to vote for this scheme. Quite frankly, this scheme, laudable in its aims, is not good enough. It is not good enough because yet again we are playing catch-up. We have set a budget, as the Minister said, and then a U.K. decision later on threw that budget into disrepair, the extra amount. Now, I remember the bad old days when the Treasury Minister had a contingency fund so that when budgets got thrown into disarray by other people's decisions they could accommodate it and say: "Right, well, hang on; I have got a contingency fund. We have got an emergency, urgent demand, fresh demand we were not expecting, unanticipated; we can deal with it and give ourselves a breathing space to work things out." In new Ministerial government, streamlined government, quicker, better, cheaper - certainly, cheaper - we do not have a contingency fund. I keep asking the Treasury Minister whether he thinks that, with hindsight, abandoning the contingency fund was such a great idea. But here we are having to bring something in, in a relatively short term - we are looking at September, it is June now - make your mind up, we have got to get it in place. A bit of pressure. No space to do it. We are playing catch-up again. Then we are told a substantial number of parents involved in the consultation were in favour of loans. I did question it earlier and I have gone to the figures on page 9, and we are talking about 4 options, graded presumably one to 4, in terms of what you think we should do. The top answer was that the States should find additional