PARLIAMENTARY DEBATE
Student Loans - 18 March 2026 (Commons/Commons Chamber)

I inform the House that the Speaker has selected the amendment in the name of the Prime Minister. I call the shadow Secretary of State.

I beg to move,

That this House calls on the Government to set the interest rate on Plan 2 student loans at a level which ensures that balances will never rise faster than RPI inflation; further calls on the Government to stop the freeze on repayment thresholds; and also calls on the Government to create more apprenticeships for 18-21 year olds, funded by controlling the number of places on university courses where the benefits are significantly outweighed by the cost to graduates and taxpayers.

In June 2023, the then shadow Education Secretary, the right hon. Member for Houghton and Sunderland South (Bridget Phillipson), proclaimed, “Graduates, you will pay less under Labour”. Well, it turns out that that was not true; under Labour, graduates are paying more. So far, under this Government tuition fees have gone up twice. This is a long way from the abolition of tuition fees offered up by a fresh-faced candidate for the Labour leadership just a few years ago—I wonder what happened to him.

It is no wonder that students feel misled by this Government. Not content with hiking tuition fees when they said they would not, this Government also froze the thresholds for repayments, making loans even more expensive for graduates. As with everything this Chancellor touches, she makes it worse. Her choice to freeze the repayment thresholds has left young people paying more and sooner. What did the Chancellor say when challenged about the threshold freeze in January? She said that the student loan system is “fair and reasonable”. To be clear, this was the stance—that the student loan system and the threshold freeze were “fair and reasonable”—of the Labour Government as recently as January. Tell that to the graduate forced to pay an extra £24,000 because of the Chancellor’s changes. The Chancellor is wrong: it is not fair or reasonable.

Given that plan 2 tuition fees were introduced by the Conservatives in 2012, that they froze the repayment thresholds in 2016 and that they abolished the maintenance grants, was that fair then?

The hon. Gentleman is missing the fact that Labour has made it worse. Even now, the Chancellor has changed her tune—no surprise given the track record of this Government. She now says that the system is “broken”, but young people are apparently not at the “front of the queue”. I did not see that on the front of the Labour manifesto. We on the Opposition Benches think that young people should be at the front of the queue, because thanks to Labour, Britain’s youth unemployment rate has topped the eurozone for the first time ever. Graduates coming out of university cannot get jobs. Graduates in work are seeing their student debt mounting up.

I have been contacted by many students in Epping Forest who are deeply concerned about their future debt and by many graduates who are worried about ballooning debt on these plan 2 loans. Does my right hon. Friend agree that the Labour Government have an opportunity to step in and relieve the pressure on young people and adopt the Conservative plans to scrap real interest rates on these plan 2 loans?

My hon. Friend is absolutely right. We have a chance today to create a new deal for young people. I hope that some Government Members vote for it.

I must declare an interest as someone in the first year group to have a plan 2 student loan under the broken system introduced by the Conservatives and the Liberal Democrats that we have today. Will the right hon. Member apologise to my generation for £9,000 tuition fees, for the broken system she created and for failing to introduce the Renters’ Rights Act 2025 that this Government have acted to introduce?

If the hon. Lady thinks the system is broken, I invite her to vote for our motion.

Every metric for young people has got worse since this Government came in. It is crystal clear that for young people, as for the rest of the country, Labour is not working.

My right hon. Friend will have noted, as I have, that the hon. Member for Hastings and Rye (Helena Dollimore), the hon. Member for Hartlepool (Mr Brash) and other Labour Members wish to talk about the past. Our constituents, and graduates who are paying these outrageous sums, want to talk about the future. At the general election, they listened to Labour’s promises on lowering costs for graduates, but the Government are doing exactly the opposite. By deflecting and talking about the past rather than accepting responsibility for the government that they are delivering, Labour Members are letting down all those young people, whose aspirations should be respected.

My right hon. Friend is quite right: not only did Labour mislead the public, but it then made things worse. Now, Labour Members will not vote to fix it. That is Labour all over.

We need a plan to fix the problem, but it is not enough to fiddle with one part of the problem. We need comprehensive change, and that is exactly what we Conservatives have come up with: a new deal for young people. The plan, which could be implemented today, would reverse the threshold freeze, make interest rates for plan 2 loans inflation-only, stop dead-end degrees, and boost apprenticeships so that young people have real choice when they leave school, not a future weighed down by debt.

The right hon. Lady talks about a comprehensive plan and giving people choices, but this is not a comprehensive plan for student loan reform; it is a plan written on the back of a fag packet. It basically revolves around restricting university access, which is always the go-to solution for the Conservatives. In truth, it will mean that people like me—I was the first person in my family to go to university—will not get to go to university. People who go to Brunel University in my constituency will face restrictions in course levels. That is not a widening of opportunity and choice, but a restriction of them.

No, the plan would massively widen choice. At the moment, the number of young people who want to start apprenticeships is much smaller than the number of apprenticeships available—we need to change that and the system. It is not good enough for the Government to table an amendment to our motion stating that they will make the system fairer and financially sustainable, when they are making it less fair and less financially sustainable.

At the moment, the system is punishing aspiration, and that is demoralising for young people. They leave university having done everything that was asked of them. They work hard and get a promotion, and then the interest on their loan goes up. They pay back far more than they ever borrowed. A typical plan 2 graduate needs to earn £66,000 a year just to keep pace with the interest. Young people should not be punished for doing the right thing.

The right hon. Lady talks about making the system fair. Will she comment on what her party did in government? The Conservatives abolished the maintenance grant, which means that low-income students have bigger debts and have to pay back more. This Labour Government have acted to bring back the maintenance grants that her party took away.

The Chancellor said that the system was fair and reasonable—what a joke! The Government do not recognise the scale of the problem, but we do, and we have come up with a plan to fix it. What is their plan? It does not exist.

Vacancies for graduates have gone down precipitously this year compared with the same time last year. That should worry those of us who are interested in the future. How can we rebalance the offer to young people so that they are not sold a pup—as they have been by consecutive Governments over many years—in relation to what a degree will mean for their future career prospects? How can we ensure that our incredibly valuable further education sector is supported—probably at the expense of some of our lesser universities?

My right hon. Friend is absolutely right: there is nothing progressive about letting a young person take a university degree that has negative returns for them. That is not fair or right, and we should fix it.

The problem is not just the loans, but a system that funnels young people into university courses that do not get them jobs and do not allow them to repay their loans. The Institute for Fiscal Studies says that 30% of university degrees have negative returns for those who study them. It is not just that they do not help, but that they have negative returns. It is worse for those students to go to university—that is not progressive.

Some 75% of the value of loans for creative arts courses is not paid back. Creative arts is an engine of the UK economy, but too many courses just do not deliver jobs in the industry that they purport to serve. It is a mis-selling scandal where brochures promise a glittering career, but the courses deliver nothing but debt and a dead end. That is not right. Of course, creative arts courses that actually lead to jobs should continue, but those who are selling a lie do not have any place being taxpayer funded.

The consequences of this broken system are already becoming clear. According to the Centre for Social Justice, more than 700,000 graduates are currently out of work and claiming benefits. That should concern every Member of this House.

Is my right hon. friend also concerned by the fact that, last year, the Office for National Statistics said that 257,000 people left the UK, up from an expected 77,000? Three quarters of those people were under the age of 35. That shows that young people are fleeing this country to look elsewhere for work. Does she share my concern that that is the case?

My hon. Friend is, as ever, absolutely right. Opportunity should be created for young people here, not in other countries, and that is what we want to create.

It is a long time since I went to university, but there was a belief then that the least important things we got out of it were degrees and job prospects. There was a value in education itself. The right hon. Lady seems to think that the only reason to go to university is mercenary.

It seems like the hon. Gentleman was at university only yesterday. If we are asking young people to take on a mountain of debt, it is important for them to know that they will get a job and have prospects afterwards. I do not think that is an unreasonable proposition, and it is one that I will argue for.

I was of the Tony Blair generation. We were told that unless we went to university, we were a failure, and that everyone should be able to go to university. That was fundamentally wrong; it led to a two-tier system where those who did not go to university were asking why not. I remember young people at my sixth form asking, “Am I not as bright? Do I not have the same prospects?” They should have been encouraged and supported. For example, my brother went into carpentry while studying philosophy at Birmingham. He could have started his career at a much earlier point. By rebalancing, we are giving the right recognition to the skills and training needed earlier, rather than pushing people into unnecessary debt traps.

My hon. Friend is spot on. It is not well known that apprenticeship degrees are more oversubscribed than Oxford and Cambridge. These are things that young people want to do, and that is why we are trying to expand them. Instead of celebrating the expansion of low-value degrees, the Government should ask whether it is right to continue pushing young people down a path that leaves them with debt but no clear prospects.

I call John Slinger. [Hon. Members: “Hear, Hear!”]

I am grateful to hon. Members for giving me such support. The right hon. Lady makes the point that creative arts subjects are perhaps not providing young people with job prospects. Would she not concede that we need people with creative arts skills and experience in our society and economy? The sector contributes £124 billion to our economy. What we need is what this Government are doing: investing in the creative arts sector. We need people who are skilled and trained in that sector so that they can do those jobs. She is offering only a litany of woe.

I do not know whether the hon. Gentleman was listening when I covered that point. The whole point is that those degrees do not lead to jobs in the creative arts industry. It is a mis-selling scandal. They promise a glittering career in the creative arts and do not actually deliver it. I think that is a problem, and I am sad that the hon. Gentleman does not think that.

What are students receiving in return for these enormous fees?

Will the right hon. Lady give way?

I will not. When the hon. Gentleman tried to intervene on me recently, he accused me of jumping on a bandwagon about rape gangs, so he will forgive me for not taking another intervention from him.

Too often, students are receiving minimal face-to-face teaching, limited supervision and a university experience that falls far short of what was promised. This is not a fair system and it is not a sustainable one either.

The right hon. Lady says that the system is unfair. Does she agree that charging interest rates during maternity and paternity leave is also unfair? It disadvantages people in the workplace, especially women, who have worked hard to get into progressive careers through university education, and they are penalised at that point.

I am glad that the hon. Gentleman raises that point. I totally agree with him that it is something that needs to be looked into and fixed.

As I have mentioned, we know that 10 times as many young people want an apprenticeship at 18 as there are places available. The demand is there, but the places are not. To me, it makes complete sense to move from funding dead-end courses at universities to giving young people the opportunity to do an apprenticeship that will get them into a job, and they will emerge from that apprenticeship with no debt. We want fundamental change to the system so that at 18, young people have a choice between a high-quality university place, an apprenticeship or going into work. That is a Conservative choice.

What is Labour’s response to that proposal? Last weekend, the Government announced that they will compensate for some of the mess that they created in the form of youth unemployment when they hiked up employer national insurance contributions, but they are robbing Peter to pay Paul—exactly the sort of economic thinking that we have come to expect. They are punishing employers with a jobs tax, which one of the Cabinet finally admitted this week has caused a huge spike in unemployment, and they are giving back £3,000, but only to those who have been on universal credit for six months. Fiddling with a system that needs fundamental reform and clearing up the mess of the Chancellor’s Budget is almost a full-time job for this Government.

The Conservatives are the only party putting forward a serious plan to help young people, whether by abolishing stamp duty for first-time buyers or through our new deal.

The motion in the right hon. Lady’s name states that

“balances will never rise faster than RPI inflation”.

She was a senior Treasury Minister. Does she share my regret at the decision to suspend routine methodological improvements to the retail prices index, which led to the gap between the RPI and the lower consumer prices index rates more than doubling?

As ever, the hon. Gentleman raises a very interesting point, and I look forward to his bringing it up with the Chancellor at questions.

I say to Labour Members that we all want to get this issue sorted out. When I spoke to the Chancellor during the spring statement, she said that the way that she was going to control student loan interest rates was by controlling inflation, but we all know what is happening in the middle east at the moment. Does my right hon. Friend agree that that policy is wishful thinking and that we need to think about the issue properly in order to change the system?

Exactly. The Chancellor gave it all away when she said that young people are at the back of the queue—that tells us all that we need to know about this Government.

The Government amendment is the usual mishmash of nothingness, and I suspect many Labour Members are disappointed. The amendment welcomes

“the Government’s commitment to make the system fairer and financially sustainable”,

even though the only thing that the Government have done so far, which is the threshold freeze, has made the system less fair and less sustainable for young people. But don’t worry, there is more. Labour Members are today going to welcome a “target”—not any action lines, but a target—even though it is a target that the Government are currently missing, as the share and volume of under-25s starting apprenticeships in the last academic year have fallen. What a mess!

We need a different approach. The Conservatives believe that the system needs fundamental change. We believe that students should not be mis-sold degrees that promise the earth and deliver nothing but debt, that the freeze on thresholds is wrong, that students on plan 2 loans should only pay interest at inflation, and that young people deserve a new deal. That is what we are asking the Government to vote for today, so that young people will be put not to the back of the queue but to the front of it.

I beg to move

an amendment, to leave out from “House” to the end of the Question and add:

“recognises that the Government inherited the current broken student loans system, including Plan 2, which was devised by previous administrations; welcomes the Government’s commitment to make the system fairer and financially sustainable; further welcomes the support the Government is providing to young people through the Youth Guarantee; supports the Government’s target for two thirds of young people to achieve higher level skills by the age of 25, including reversing the decline in apprenticeships under the previous Government; and further supports the reintroduction of maintenance grants, which had been scrapped under the previous Government, to help ensure that background is not a barrier to opportunity for young people.”

I welcome the Opposition’s focus today on opportunities for young people, student loans and apprenticeships. I am pleased that the House has the opportunity to scrutinise this broken system devised by the Conservatives, who tripled tuition fees, introduced plan 2 loans and presided over a decade that saw a 40% drop in young people starting apprenticeships.

We have heard the argument repeatedly that it was the Conservatives and the coalition Government that brought in these changes. I am someone with a plan 2 loan. I was in the generation that Blair told to go to university, and at no point did anyone in that Blair Government talk about how the jobs market would take on so many graduates or, most importantly, who would pay for those people to go to university. Does the Minister agree that the 50% of school leavers who went to university should be paid for by the 50% that did not?

I think it is really relevant to make sure that the public know who created this system—and not only created it, but froze those loans 10 times over the last 12 years—[Interruption.] I know that it is inconvenient for the Conservatives to be reminded of these truths, but we have lived through them.[Official Report, 23 March 2026; Vol. 783, c. 1WC.] (Correction)

I must be suffering from some sort of political amnesia, because I was absolutely convinced that it was a Labour Government that introduced tuition fees in the first place. Maybe the Minister will correct me.

I was talking about plan 2—[Interruption.] The debate today that has been called by the Opposition is about plan 2 loans—a system that was created in 2012 by the Conservatives.

I have read the motion and the amendment. Students today are on a new loan—the plan 5 loan—and Conservative Members have completely forgotten current students. The Government amendment talks about the system in the round. Can my hon. Friend reassure me that the Government are going to look at the system in the round and not just at plan 2, so that all students and graduates have a fairer system?

I thank my hon. Friend for his advocacy on this issue. I know that he represents a number of students, and this is something that he has raised continually. We have heard the concerns about student finance, and it is something that we will be looking at. I am really happy to take that conversation forward.

My constituents are not interested in the past, particularly the distant past; they are interested in the future. They have heard what the Conservatives would do, but we have yet to hear from the Government of the day what they will do. Will the Minister enlighten us?

I think that the past is really relevant. I was a council leader during the last Government and I saw the cuts to local youth services, to early years support and to all our public services. We lived through that time when young people really were at the back of the queue, and we are rebuilding from that through investment in tackling child poverty, in youth services and in schools, and through the historic investment in special educational needs and disabilities provision. Those choices that we are making really matter, and are relevant to the discussion we are having.

In terms of what we are actually doing, we are increasing the threshold to £29,385 this year, which will help to support people this year after the threshold was frozen for four years by the previous Government.

The Opposition talk about amnesia. Does my hon. Friend agree that it is they who have collective amnesia about the system they created? My generation certainly do not have amnesia about the debt repayments we made when Liz Truss crashed the economy and sent interest rates soaring—that is what the Conservatives presided over. We do not have collective amnesia about them abolishing maintenance grants for the lowest income students. It is this Government who are acting for my generation with the Renters’ Rights Act 2025—

Order. I just remind Members that interventions need to be shorter than that.

I’ve got a short one!

I would be delighted to take the right hon. Member’s incredibly short intervention.

The Minister’s hon. Friend, the hon. Member for Leeds Central and Headingley (Alex Sobel), asked a perfectly reasonable question about looking at the thing in the round, and her answer was that she would take the conversation forward. I think we need more than that.

We have acknowledged the issues and the unfairness in the system. The Prime Minister, the Chancellor and the Secretary of State for Education have acknowledged that, and we have said that we will look at it.

I will make progress. Under the last Government, the number of young people not in education, employment or training rose by 250,000. Today, nearly 1 million young people are not in education, employment or training. That is the legacy of the Conservatives, but this Government are turning that around. We are renewing the post-16 education landscape and celebrating routes into vocational education not by restricting university, but by opening up new high-quality vocational routes. We are introducing new V-levels and new foundation apprenticeships and supporting students to get excellent university education across the country.

The Opposition talk a lot about higher education and suggest that too many young people go to university. It is interesting that they can never tell us who should no longer go or which courses they should not study.

I just told you!

Did the right hon. Member tell me who should not go to university? I can tell the Conservatives that when they close the drawbridge, it is pupils from disadvantaged backgrounds who will end up not at university. That is the consequence. We are opening up access to apprenticeships and vocational routes not by closing down university routes, but by opening up other routes.

The Opposition have made the argument that 30% of courses leave people with a negative bank balance. That is the problem that we are trying to solve. We are not denigrating anyone for wanting to choose; this is about ensuring that the quality of the course means that people have a positive life outcome, not a negative one. Does the Minister agree with that principle?

We are absolutely committed to driving up the quality of all university courses, and we are acting on that.

Conservative Members have attacked arts and creative courses as the areas where they would like to see a reduction. We have just seen the British talent at the Brits and the Oscars. This is one of our highest-growth industries. We saw this in our schools when there was a reduction in education in the arts, and we are seeing it now as the Conservatives attack those courses in universities.

Young people in my constituency are looking for a bit of hope. How should they interpret the Minister’s answer to her hon. Friend, the hon. Member for Leeds Central and Headingley (Alex Sobel), and the fact that the Chancellor has said that young people are at the back of the queue? From that very recent mood music, it does not sound as if there is much to hope for from this Government.

I have spent the last few months travelling around the country talking to young people about the investment that Labour is putting in to support young people with special educational needs and to support schools and youth clubs. That is what the Labour party is doing in power, and there is huge hope that comes from that. Those are the areas where we need to prioritise investment.

The chance to study in higher education for those who want to and who have the ability to changes lives. We are determined to support students who want to go to university to fulfil their aspirations. We must not lose sight of the value that student loans provide in enabling that and levelling the playing field at the point of access. They remove the up-front financial barriers to study and enable students to repay when they are earning.

The Minister is making an excellent and powerful speech on the motion. One aspect of the broken student loans system is the maternity penalty. When someone is on maternity leave, the interest on a student loan continues to accrue, despite income dropping below the repayment threshold. That means that graduates with student loans who take maternity leave face a longer repayment period and a greater total loan amount. Will the Minister take that concern back? Will the Government have a look at this perceived inequality?

I thank my hon. Friend for making that point. As she knows, increasing security for women on maternity leave is a really important part of this Government’s agenda, and that is why we are taking forward the Employment Rights Act 2025. It is important to note that in the system, if income goes below a threshold and someone is out of work generally, they will not have to pay. That is very different from a commercial loan, but I will absolutely take her point back.

The student loan system delivers tuition fee funding—some £10.7 billion in 2024-25—to our world-class higher education sector, a sector that remains by any objective metric one of our nation’s greatest exports and a global beacon of intellectual excellence. It is important that we remember what is at stake here. From pioneering laboratories developing quantum computing and agritech to those at the forefront of advanced manufacturing and genomics, our universities are the primary engines of the research that will define the 21st century, and the impact of our universities goes beyond their pivotal contribution to the economy and the careers of individual learners. By exposing students to diverse perspectives and expanding their social horizons, these institutions help our young people to build the networks, resilience and life skills that define a person long after they have graduated.

I have a creative arts degree. Not only did it give me the opportunity to meet people, importantly, it enabled me to access the fashion industry as somebody growing up outside of London. Does the Minister share my concern that removing those degrees would create London-centric creative industries?

I thank my hon. Friend for that powerful point. Her creative arts degree was of huge benefit in getting her to this place.

Does the Minister think that the creative industries are the exclusive province of universities? If that is what she thinks, can I invite her to visit Trowbridge college in my constituency—an excellent further education college—and see what it is doing with multimedia to give kids the skills they need, as part of the growth in the economy that the Government are sorely lacking?

Of course I recognise the critical role that FE colleges play in supporting children into the creative industries. That is why this Government are backing FE colleges after the previous Government failed to do so. However, we do not believe that closing down routes to university is the best way to support our creative industries. We can have both, and we can have opportunities for both.

Is it not also the case that kids from working-class backgrounds were increasingly shut out of traditional apprenticeship routes under the previous Government because of the artificial entrance requirements, which employers said were blocking them from hiring the best? Employers said that those requirements should be scrapped, but the Department for Education blocked that under its previous management.

We saw a 40% reduction in young people’s apprenticeships over a decade. That was the legacy of the Conservative party.

While the foundational principles of our higher education funding and student finance system might be solid, they are straining after more than a decade of neglect and mismanagement, on top of the structural flaws baked into the system by the Conservatives. First, a legacy of seven years of frozen tuition fees has contributed in no small part to a significant and growing number of English higher education providers facing financial challenges. Analysis published last autumn by the Office for Students indicates that without mitigating action, some 124 providers—45% of those included in the OfS financial sustainability report—could face a deficit in 2025-26.

The Minister is making an important point. The economics of higher education are actually quite complicated; there is a great deal of cross-subsidy, with the humanities and the arts effectively supporting science, medicine and engineering courses and so on. Does the Minister agree that we should be worried that the Opposition parties’ proposals would put jobs and the viability of universities at risk?

My hon. Friend makes an important contribution to this debate.

The Government have taken the tough, immediate action that is required, including by making the difficult decision to increase tuition fees by forecast inflation, balancing the need to give the sector stability with fairness to students and taxpayers. We are also asking more of the sector: we expect higher education providers to demonstrate that they deliver the very best outcomes, both for those students and for the country, in return for the increased investment we are asking students to make. To achieve this, this Government will link future fees increases to university quality, as I have said. This will protect taxpayers’ investment in higher education and incentivise high-quality provision for students without taking away opportunities.

The Minister is typically generous with her time and courteous in the number of interventions she accepts. May I gently take her back to lines 3 to 4 of the text of the Prime Minister’s amendment on student loans, which state that this House

“welcomes the Government’s commitment to make the system fairer and financially sustainable”.

To avoid this sounding like jam tomorrow and to reassure young people—I have a lot of respect for the Minister, and I will be generous—can she give one or two concrete announcements today of specific measures that she is bringing forward that will achieve that commitment?

We are lifting the threshold, which will make a difference this year for students. We have already announced that, and we have said that we will continue to look at this matter as we look at a wide range of issues. We accept that the system created by the Conservatives is not fair.

More broadly, this Government are resetting the contract for young people across the landscape. Beyond our new deal for young people who do not go to university, we will support more young people into work and training through a £2.5 billion investment in the youth guarantee and growth and skills levy over the next three years and—this is incredibly concrete—we will support almost a million young people and deliver almost 500,000 opportunities to earn and learn.

I welcome this week’s announcement of the new deal for young people beyond university. One of the challenges in a seat like Peterborough is that not enough young people get to either apprenticeships or university. Does the Minister agree that one of the challenges we face is that we spend so much time in this place and in the media debating university routes as the path to success, but we do not spend half as much time as we need to discussing apprenticeships? The youth guarantee starts to put that right.

My hon. Friend makes an incredibly important point. We need to open up access to apprenticeships. That is why the Government are making this investment, and it is why we have set that ambitious target for young people to go to university and to access apprenticeships.

On that point, does the Minister agree that there is another way? The Open University also allows people to earn and learn at the same time. The situation is not as simple as university or apprenticeship. There is a middle way and, as a former graduate of the Open University, I encourage the Government to support it.

We are committed to opening up those routes to lifelong learning, and we are setting out plans on that. I welcome that intervention.

With hindsight, does the Minister regret Tony Blair’s announcement in the late 1990s that more than 50% of school leavers should go to university? Would it not have been better to have said that all young people leaving school should either go to university or into high-quality apprenticeships or training?

Opposition Members were accusing me of talking about the past, but I think I was nine years old when that was going on. I do not regret the real focus on opening up access to university, because that opened it up to disadvantaged pupils who might never have had that opportunity. Today, we recognise that we need both those routes. There has not been enough investment or focus on vocational pathways. We absolutely agree with that, and we are putting that right. It is our ambition to have a more sustainable, more specialised and more efficient sector that better aligns with the needs of the economy.

We want young people to have a choice: to go to university, to study, to take up an apprenticeship or to earn and learn. We want that range of routes to be available and for young people to have high-quality careers education, so that they know what the opportunities are in their local communities.

We want higher education providers to go further to give their students the best course and employment outcomes, ensuring that the sector remains globally competitive. The Government are committed to ensuring that higher education is open to all who have the ability and the desire to pursue it. In the 2028-29 academic year, we will be reintroducing targeted, means-tested maintenance grants of up to £1,000 a year, increasing the cash in students’ pockets without increasing their debt. To help students from the most disadvantaged backgrounds, we are already delivering on a commitment to future-proof maintenance loans by increasing them in line with forecast inflation every academic year to try to ensure that support keeps pace with financial pressures. In the academic year 2026-27, care leavers will become automatically eligible to receive the maximum rate of maintenance loans, which will provide vital extra support for one of the most vulnerable groups in society.

I welcome support for people from the most vulnerable groups who are heading to university, but will the Minister acknowledge that by enabling those groups to take the maximum amount of support, the Government are also enabling them to have the maximum amount of debt at the end of their university careers? A frequent problem throughout all this has been the fact that either the people in the middle who do not quite get the support that they need or those at the far end of the system who do need support are saddled with the most debt, because they will not have the parental assistance that would help them to leverage against the loan repayments for the rest of their careers.

I think it important to make it clear—some people watching the debate will be worried about this—that these are not normal loans, in that young people who are not earning, or are earning below the threshold, do not have to pay anything. In the long term, if they have not earned enough by the end of their careers, they do not have to pay the whole amount, and they do not have to pass that on to future generations.

I thank the Minister for giving way: she has been very generous with her time. I think there is a point of principle in this debate, and I should like to hear the Minister’s thoughts on it. Does she believe that there is any degree offered by a university in which it is not fair to invest taxpayers’ money? If the quality is not good enough, surely it is not fair for the individual to be indebted. Will the Minister concede that there probably are some courses, across the country, that it is not fair for the taxpayer to subsidise?

I have made it very clear that we want to increase the quality of courses, and that is one of the conditions that we attached to increasing the fees in a fair way, but we want to do that by ensuring that those courses are of high enough quality, rather than scrapping the opportunity for young people to go on them.

Looking further ahead, I can tell the House that the Prime Minister’s ambition is to see two thirds of young people in higher-level learning by the age of 25. With the lifelong learning entitlement, which will be launched in January 2027—a policy that the last Administration failed, year after year, to deliver—we are transforming higher education from a “one-shot” opportunity into a flexible and responsive system with learners at its centre. As was mentioned earlier, the LLE will allow learners to fund individual modules and reskill throughout their careers, at colleges and universities alike.

We now have a responsibility to ensure that the benefits of higher education are maintained for future generations, and to clean up a student loan system in which interest rates have been allowed to spiral and students are confused about what is the right path for them. We absolutely recognise that there are failings in the system, but it is not a system that we built; it was a system that the Conservatives created. We know that student loan repayments are a concern for graduates, which is why we increased the plan 2 repayment threshold last year and why we are increasing it again next month, to £29,385. Borrowers who earn below that amount annually will not be required to make any repayments at all. This threshold is higher than the median graduate salary three years after graduation.

Graduates generally go on to benefit from higher earnings, and it remains reasonable for those who gain the largest financial benefits from their degrees to contribute more towards the cost of their studies than those who have not gone to university, or graduates earning lower salaries. Lower earners will still benefit from the unique protections that student loans offer. Any unpaid loan balance, including interest accrued, will still be cancelled at the end of the loan term at no detriment to the individual, outstanding debt is never passed on to a borrower’s family, and having an outstanding student loan is not a barrier to accessing a mortgage. Student loan balances do not appear on borrower credit records, although regular student loan repayments will be considered, alongside other living costs, as part of the affordability check for mortgage applications.

I want to say how seriously the Government take the cost of living challenges that young people face. Too often this generation have found their challenges ignored. We are working hard to tackle these issues by extending Government-funded childcare, reducing energy bills, freezing rail fares, rolling out free breakfast clubs, building new homes and introducing the Renters’ Rights Act 2025.

Before Conservative Members once again line up to criticise the decisions that we have made, I would like to take a moment to remind them of their track record on this matter. Plan 2 student loans were designed and introduced in 2012 by the Conservative-Liberal Democrat coalition, with a repayment threshold of £21,000 per year and interest rates of up to 3% above inflation. Those are the very interest rates that the Conservatives and Liberal Democrats are now calling to be reduced. Having said that they would increase the plan 2 repayment threshold to reflect earnings, they froze it for four years. The Conservatives then froze it in 2016 and in 2017, and again from 2021 to 2024. In total, there was a decade of freezes by the opposition parties. It is their mismanagement that now necessitates a further freeze to the threshold. I do not remember any of this outrage from those Members when they created and built this system.

As we have heard, the Opposition’s solution is to cut courses and cut opportunities. We will not make reckless and unfunded changes to student loans. Student finance and higher education funding is a complex, interconnected system. We are considering a range of options to make the system fairer, but we must be fiscally responsible and consider carefully how change would be funded. Politics is about choices.

Would the Minister consider doing something about the cost of accommodation in university towns and cities? Where I come from in north Somerset there is no university, and at the moment people do not really have the option to go anywhere except a city, which is incredibly expensive. Would she give some consideration to reducing those costs on ordinary working families?

I thank the hon. Member for that comment, and that is why we are supporting maintenance grants to help students with the cost of living.

I will conclude by saying that our approach to further reform of the system will be deliberate, evidenced and fiscally responsible. We are here not to tear down the house, but to repair the roof that was left to leak.

I call the Liberal Democrat spokesperson.

I am grateful to the Opposition for this debate. In the recent Westminster Hall debate on this topic, we heard powerful testimony about the reality that graduates face in making repayments every month and watching their balance grow, with their plans deferred and lives constrained. I am sure we will hear more of that today, and those stories deserve to be heard and to receive a clear response, not a political runaround.

Parts of the motion are not wrong. The plan 2 threshold should be unfrozen, and while we may disagree on the specific change proposed, the interest structure does need reform, as the Liberal Democrats have said clearly. The motion also calls for more apprenticeships for 18 to 21-year-olds, and we welcome such investment in principle. We would go further by doubling degree apprenticeships in priority sectors and introducing skills co-operatives specifically to help small businesses to pool resources to take on apprentices they could not otherwise afford.

However, the question is whether the motion as a whole represents a serious plan, and I am afraid that it does not. Specifically, it calls for

“controlling the number of places on university courses where the benefits are significantly outweighed by the cost to graduates and taxpayers.”

Let us be clear about what

“controlling the number of places”

means. It means cutting. The courses they have in mind are arts, humanities and creative subjects.

The argument rests on a definition that sounds objective but is not: which courses have benefits that are significantly outweighed by their costs? The proxy appears effectively to be graduate salaries. Graduate salaries are a poor measure of what society gains from a degree. Nursing, teaching, social work and creative arts all underperform on salary data while delivering enormous public value, so what logic are the Conservatives applying? Even on salary terms, cutting arts places would damage science, technology, engineering and maths, not protect it, as one Labour Member mentioned. Arts courses are relatively cheap to deliver and cross-subsidise expensive laboratory provision. The Institute for Fiscal Studies explicitly found that reducing arts funding may, perversely, reduce funding for STEM.

The hon. Gentleman is making a very important point. The Conservatives talk about cutting public funding for courses such as creative arts, but that will not stop the wealthiest students from accessing those courses. Does he agree with me that all that will happen is that people from more deprived parts of our country will not be able to access them, and that there will be one rule for them and another rule for everyone else?

The history of access to university demonstrates that point well.

I am trying to follow the mental perambulations of the left. The argument seems to be that people from working-class backgrounds can go on courses that lead them to have negative outcomes—poor earnings—and that the very course they are on, which does them little good, with so much promised and so little delivered, actually has the opportunity to cross-subsidise other people doing other courses. Both the hon. Gentleman and the hon. Member for Gloucester (Alex McIntyre) seem to think that is a good thing. Can they not see that, in reality, it is not?

I thank the right hon. Gentleman for his intervention, because that is one part of the argument I am making. There is a very important point about that, which is that it could equally be an argument for making the loan system fairer in its repayment terms to reflect that.

There is a deeper problem, too. The graduate earnings premium has declined in Britain, but not because we have too many graduates; it is because we have too few skilled jobs. That is a demand-side failure and a Conservative legacy. Our peers in OECD countries have expanded graduate numbers while maintaining the graduate premium, because they built the industries and invested in the regions that generate high-skilled employment. Cutting student numbers accepts our economic underperformance as permanent. It is, as I have said before, a counsel of despair dressed up as policy.

Then there are the creative industries: over £100 billion a year to the British economy; one of our most successful global exports; built on a pipeline of arts graduates. The answer is not to stop training the people on whom the whole pipeline depends. Ultimately, the value of an education cannot be read entirely from a graduate’s salary. The capacity for critical thinking, empathy and cultural participation are public goods, hidden in plain sight, that show up nowhere in write-off rates. A party that asks only “What does it pay?” has already decided something important about what it values.

On the broader point of principle about the value of certain subjects, I intervened on the Minister and she failed to answer, so I will ask the hon. Gentleman the same question. Does he think that there are some subjects offered by some universities for which the value is quite poor and that it is unfair for the taxpayer to subsidise them? Does he think that in principle it is possible that those subjects exist?

The point is to allow the market and the regulation of that market to decide. [Interruption.] I will make some progress.

Order. To be helpful, the hon. Member might reflect on the fact that the microphone is in front of him; it makes it much harder for Hansard and for the viewing public to pick up his words if he faces the back of the Chamber.

Thank you, Madam Deputy Speaker.

I will turn to the threshold and the interest rate—areas on which we do substantially agree with the Conservative motion’s diagnosis, if not its proposed remedy. In the system as it stands, the interest rate matters financially only for those who repay in full, which most graduates do not. That is by design to share the costs between the graduate and the state. It means that the largest benefit of the Conservatives’ proposal would flow to the highest earners—those who repay completely. As analysis from the Institute for Fiscal Studies has shown, it would be regressive in its distribution, which is why more thought is required on interest structure.

On the threshold, the picture is more straightforward. Before the election, the Education Secretary promised that graduates would pay less under Labour, as the shadow Minister said, and, in their first Budget, the Government left the threshold rising. Then, in their second Budget, the Government froze the threshold for three years from 2027.

Ministers have cited a £5.9 billion figure as the yield of this change, but we should be clear about what that figure is: it is the discounted present value of extra repayments across nearly 30 years, with the bulk sitting in the 2030s, 2040s and 2050s. The annual cash impact during this Parliament is relatively small, and the change barely moves the needle on the Chancellor’s own fiscal rules. Graduates will bear a real and immediate burden in their payslip for the remainder of their loan for a cash-flow improvement that is modest in this Parliament and does nothing at all for the Chancellor’s balanced Budget rule. Of all the choices in November’s Budget, why did they make this one?

I note that the Government’s amendment today welcomes a commitment to making the system fairer, and such commitments should be welcomed. However, graduates are waiting for action. Let me therefore set out what the Liberal Democrats would do. First, we would unfreeze the plan 2 threshold immediately and tie it to earnings, as was originally promised. Secondly, we would restore meaningful maintenance grants. Students from the poorest families can borrow £1,284 less today in real terms than in 2020-21. The £1,000 grant reaches about 10% of students, restricted to specific subjects. I think we can do better on maintenance policy: grants must be available regardless of subject, and the parental income thresholds that have been frozen since 2008 must be urgently uprated.

Thirdly, we would establish a royal commission on graduate finance, including plans 2, 3 and 5—plans 3 and 5 have terms that are, in several respects, even harsher. All those plans should be in scope. It should also have independent oversight of key parameters. That is not to delay, but to look seriously at fairer interest structures, total repayment caps and progressive repayment rates, and, critically, to build the cross-party settlement that is the only real protection against the next Government squeezing graduates again.

The system has been treated as a fiscal convenience rather than a social contract by the previous Government, and now by this one. Graduates deserve better.

Eighteen months ago, my constituents in Kettering chose to elect a 26-year-old as their MP. I believe they did so because they wanted a Labour Government, but also because young people in my constituency, and their parents and grandparents, wanted me to speak of my own experience of how tough it has been for my generation.

One of the tasks we navigate as MPs is how best to use our privileged position in this building to influence change.

As often one of the only young people in the Chamber, and almost always the only young woman—[Interruption.] Okay, depending on what we define as young. [Interruption.] Okay, let me say as one of the only women in their 20s in this Chamber, I try to share the perspective of a younger person. I often felt that that was missing in debates when I watched politics as I was growing up. I shall share that perspective in this debate using my own experience, and in doing so I hope to highlight the generational inequalities that have turned into deep-felt frustration—a frustration that made me join a political party, that made me campaign for a change in Government and that drives me in this place every single day.

I declare the fact that I have a plan 2 student loan close to £90,000. Before getting elected to this place, I was working full time for years, just watching my student loan grow. In Kettering, I grew up in a single-parent household. My mum, who is a youth worker, raised me by herself. At school, like so many others, I struggled to work out what I wanted to do and what I wanted my career path to look like. What I knew more than anything else was that I wanted to work hard enough to give myself a better life. It was so clearly communicated to me at school that that route to a better life was going to university. On reflection, I wish someone had spoken to me about apprenticeships and other options.

In the desire that many young people have to build themselves a better life, I and people around me did the things that we were told to do: we worked hard, we went to uni, and we got a degree. There is a lot said about what Gen Z expect from life, but ordinary hope and ordinary aspiration, despite what social media tells us, is not to live in Dubai, or to buy avocados and an iced matcha every day; it is to live in a home that we are not worried we will be kicked out of.

The hon. Lady is giving a powerful speech. On behalf of her generation, is she disappointed that, having promised to reduce the costs for graduates repaying student loans, the Government are making it worse? Is she disappointed that, when challenged over this broken system, the Chancellor of the Exchequer said that the hon. Lady and people like her are at the back of the queue?

There are many levers that this Government can pull to make life better for graduates. I understand that, given the economic situation, some of those levers are easier to pull than others. I am glad that measures such as the Renters’ Rights Act 2026 are coming forward and making a difference for my generation every single day. I have voiced my view that the system is not fair and that I would like my Government to look at it, and I think that that has been heard.

Let me return to what I was saying. We want to be able to live in a home that we are not worried we will get kicked out of, and even one day not to have to live with strangers or parents. We want to be able to make the choice to have a child if that is right, and to decide to go on holiday without maxing out our credit cards. I do not think that that is asking too much. That is hope and aspiration. I want to live in a country where it is reasonable for ordinary young people to want those things and, more importantly, to think that they are achievable.

Of all the damage that the Conservatives did, one of the worst things for me was the damage to hope. I started university in 2016. My tuition fees were £9,000 a year, but my maintenance loan was £12,000 a year. I am now paying back more not because my education cost more, but because I came from a low-income family and needed that support to live.

My hon. Friend is making a powerful speech. This place is much better for her presence, speaking up for people in her situation. It sounds like we had a similar background, but I was fortunate enough to be on a plan 1 system and, under a Labour Government, benefited not only from an educational maintenance allowance to stay on at sixth form, but from grants as well as loans. It sounds like she was not able to benefit from that because of the Conservative party. Does she agree that the restoring of maintenance grants and the uplifting of maintenance loans to match the cost of living will benefit people who come from backgrounds such as ours?

I do not think it has been talked about enough in this debate, or in the debate more widely, just how much is added on for students who have to take out a large maintenance loan because they come from a low-income family. I thank my hon. Friend for raising that.

When maintenance grants were scrapped by the Conservatives, that cost did not disappear.

The hon. Lady is giving an excellent speech, but there is a whole cohort of plan 1 students who experienced the exact situation that she is describing. In 1997, Tony Blair said that he would not introduce tuition fees. In 1998, he did, and the Labour party then also scrapped maintenance grants. I was 16 in 1997 and was suddenly faced with needing to pay fees and get a loan in order to go to university, and had no family support to afford it. It is important that we recognise that it was the Labour Government who did that in 1998, having said that they would not. We can give just as many examples of decisions that the previous Labour Government made as we can of those made by the previous Government.

I was born in 1997, so the hon. Lady will forgive me if I cannot recollect that. I do not think that graduates are arguing that we should not pay. There is an understanding that graduates should pay for their degrees; it is the scale and fairness within the system that I want to highlight.

When maintenance grants were scrapped, the cost did not disappear; it was simply shifted. It was shifted on to students and turned into debt, and the burden was put on those from the lowest-income families. The very policy that enabled working-class kids to go to university gave us the highest debt as soon as we left. That is not fairness, and that is not opportunity. It is generational inequality designed into a system that disproportionately impacts people who do not have a savings account waiting for them when they turn 18, who do not have the money for a house deposit, and who cannot ask for help for childcare.

That is why I welcome this Government taking steps to strengthen maintenance support, including through the return of maintenance grants. If the Conservatives truly cared about those students, I would have expected them to welcome that.

I too welcome the reintroduction of maintenance grants, which, let us be clear, were scrapped by George Osborne when he was left to his own devices in 2015. However, does the hon. Lady accept that £1,000 a year for certain selected subjects will not even touch the sides and suggests that some poor students deserve support but not others? Does she think that that is the right way forward?

I appreciate that it is a start. I welcome our introduction of £1,000, but I do think there is more to do. I also acknowledge that we are in a tough economic environment and this is what the Government have chosen to prioritise.

It is not by accident that my generation have it so hard. Make no mistake: these decisions were taken by the Conservative party when they were in government. They asked my generation to do more with less, to bear a heavier burden, and then left us behind. The Tories calling this debate today, pretending that they have the answers to fix the system that they broke, is insulting to young people across this country.

Would the hon. Lady not find it rather worse if we were not reflecting on our time in power and the fact that we were thrown out and were not trying to come forward with constructive proposals to make things better? The important thing is to listen to people like the hon. Lady and our constituents, reflect and come forward with proposals. That is what we are doing. We are trying to look forward, not play some history game.

The previous Conservative Member who intervened asked me about 1997, so there is some looking back going on. I would welcome the Conservatives reflecting on their time in power, but unfortunately that is not what I have seen today and it is not the tone of the conversation that I hear coming from the party.

The Tories are calling on the Government to change the plan 2 repayment system, when they designed plan 2 student loans; to end repayment thresholds, when they froze them; and to create more apprenticeships, when they left one in eight young people not earning or learning. When we hear the Conservative party now proposing to cut interest rates on student loans, we have to ask: where was this concern when they were in government? Where was this concern for the thousands of young people—my peers, my friends, people around me—facing high student loan payments today?

The reality is that what Opposition Front Benchers are proposing would disproportionately benefit the highest earners—those most likely to pay off their loans in full—do little for the majority of graduates, and do almost nothing for those from low-income backgrounds, who are less likely ever to clear their debts. It is the same Conservative party.

I feel strongly that we now have a chance to say something to young people about their future, because after years of broken promises what we see is frustration, and something more dangerous than that: a loss of belief that working hard will mean people will get on. When that belief goes, opportunity goes with it. The real legacy of the last 14 years is not just high debt but diminished hope. I genuinely believe that it is only Labour that offers the chance to restore fairness between generations—not headline-grabbing tweets—and we are starting to do that by strengthening support for renters, delivering the youth guarantee, expanding childcare and taking steps to ensure that maintenance support works for students, not against them.

It is only Labour that can do something bigger and restore to an entire generation the belief that if you work hard, whether at school, at work, at university or through an apprenticeship, you can build a better life. That is a real life, with a secure home, the ability to start a family and confidence that efforts will be rewarded with opportunity. When my mum encouraged me to pursue education, she believed that she was giving me a better life. That is what young people deserve today: not just to be able to hope for a better future, but to have that within their reach.

Order. There will be an immediate five-minute time limit.

When I woke up this morning and sprang out of bed thinking about my upcoming 57th birthday, I was feeling quite young and sprightly, but having listened to the speech of the hon. Member for Kettering (Rosie Wrighting) I feel particularly ancient and amazed that I have managed to get to my feet to give this speech. The hon. Lady gave a compelling and interesting speech, which gave those of us of an earlier vintage when it comes to university experience much to think about. The House should be grateful to her for what she had to say.

The Government’s prognosis is slightly odd. It seems to be, “It’s a terrible system—it’s broken and it’s not working. We will have a little think about it. I’m not quite sure what we’re going to do or when we’re going to do it. You’re at the back of the queue, but we’re not going to tell you how long the queue is.” It like one of those call centre things where we are told, “Your call is important to us—please wait,” and we are waiting and waiting in the queue, but we do not know for how long. Such policy issues require long-term, settled solutions. It cries out to me as something that would really benefit from cross-party working, which would give some solidity and sense to long-term policy making.

I welcome the motion tabled by my right hon. Friend the Leader of the Opposition, because it starts to address a pressing issue in our inboxes that is of concern to our constituents. Should we go back to the idea of a graduate tax? I do not know. It is clear that all Governments and all parties should view money spent on education in the university sector and elsewhere not as expenditure but as an investment, from which the state and society should have an expectation of a return.

It is crucial that we are sensitive on the point about controlling the number of places available. We do not want to reduce the evaluation of education to a utilitarian exercise, but clearly one has to look at value for money. Education is more than just the end of the process: it is an enriching, personal development, friend-making process providing us with all the keys to life’s doors as we face them.

When I went up to university way back in 1987—I do not suppose that the mother of the hon. Member for Kettering had even thought about her then—one in eight did so. That was not a sustainable figure if we wanted to see a growing economy. I had gone to an ordinary state school in south Wales and was the first in my family to go to university. Is 50% of our young a sustainable figure when clearly the job market is changing?

I welcome whatever anybody wishes to do to support vocational and technical education and apprenticeships. There are other ways. I say this—I suppose I must declare an interest—as someone whose eldest daughter is applying to university at the moment, but it is often my fellow sharp-elbowed middle-class parents who push their children towards university and fail to recognise the importance, value and use of apprenticeships and other forms of getting on in life. There needs to be a societal step change. We have to think seriously about that and particularly about supporting our FE colleges. Many of my young constituents attend Yeovil college, just over the border in Somerset. It is a first-class college with great ties to local businesses such as Leonardo, and it provides a good start in life for many young people in North Dorset.

I echo the point made by the hon. Member for Kettering about the benefit of stability that a settled future—putting down roots, starting a family and so on—can bring. We should encourage our young to think like that, but also to understand the wide range of educational opportunities that exist for them. We cannot ignore this any longer. Too many of our university institutions are just about hanging on in there financially, many are tottering on the brink, and we have a model that we cannot sustain, the utility of which is proving even harder to demonstrate to our constituents. I say to the Minister that doing nothing and putting this at the back of the queue is not a sustainable solution.

Will the hon. Gentleman give way?

Of course—it gives me an extra minute.

The hon. Gentleman keeps referring to “the back of the queue”, but my right hon. Friend the Chancellor of the Exchequer did not say “back of the queue”. She actually said, after her Mais lecture:

“we want to make improvements. But is it front of the queue? No, it’s not.”

May I just say—[Laughter.] Right hon. and hon. Members can chunter from a sedentary position, but Conservative Members have repeatedly said “back of the queue”. That is not what the Chancellor of the Exchequer said. Does the hon. Gentleman accept that point?

What I do accept is that the hon. Gentleman is swiftly gaining a reputation in this place as the only Labour Member who would defend a policy of the slaughter of the firstborn. He will defend anything. I seem to remember that he was one of the only Labour Members who stood up and defended Lord Mandelson’s appointment to be ambassador to Washington.

Will he give way?

No, I will not give way; one can be a useful idiot only so often in an afternoon. I say to the Minister: whether it is at the front of the queue, the back of the queue or the middle of the queue, this is an issue that cannot be put aside any longer.

Will the hon. Gentleman give way on that point?

I am just about to give up and I will not get an extra minute. I like the hon. Gentleman very much and in ordinary circumstances I would, but I will not.

We need some urgency on this matter, and I urge some cross-party working to make sure that all our constituents, whether urban or rural, and whether first, second, third or fourth-generation university students, get the very best deal and start in life that they can as they begin their working lives.

It is a pleasure to follow the hon. Member for North Dorset (Simon Hoare). Like him I am a father—I have two children who have graduated recently. I also worked in higher education for a time.

I speak in support of the amendment in the name of the Prime Minister and the Secretary of State. I will discuss three aspects of this important issue: first and foremost, the legacy left by the last Government, which we heard a little bit about earlier; secondly, the measures that are being taken by the current Government to address that; and thirdly, what more might be done to help.

Turning to the legacy of the last Government, we should be quite simple and straightforward about this: the last Government left a terrible mess in higher education. Today, the Conservative party is trying to quite simply rewrite history when it comes to student loans. It was the last Government, supported by the Liberal Democrats, who designed the plan 2 student loans, and the last Government who froze the thresholds for 10 years. They are now the ones complaining about the very system that they devised, when actually, they should be apologising for the mess they left behind. Sadly, we face the ridiculous situation where they are campaigning to resolve the very problem that they created. It is all a little bit rich.

In contrast, the current Government are trying to clear up that mess and to build a better future for young people. I thank the Secretary of State and the Minister for their work to invest in children and young people, whether by investing in Best Start, with four new centres in Reading and many more across the country, or in our schools. It was a pleasure to welcome the Secretary of State and the Prime Minister to a breakfast club recently. We are also investing in school buildings and teachers’ pay, which I remind Opposition Members is an important area of policy, given the mess they left teacher recruitment and retention in when they left office. The Government are also updating the school curriculum and consulting on modernising special educational needs and disabilities provision. These are all important steps forward and examples of real investment in children and young people.

As part of that, I know that the Minister and her colleagues are trying to address some of the issues around student finance, and I welcome the reintroduction of maintenance loans in particular. There have been some thoughtful comments about their power and importance to many people of lower means in encouraging them to get on with studying at university.

The Government are doing wider work to tackle the cost of living, and it is important to see the support for maintenance loans in that context. The freeze on rail fares will help students and young people, as will the move to cut energy prices. We have also heard about the work to support renters. Indeed, the work to build more houses will help young people buy their own homes. The Government are helping our young people in many ways. There remains more to be done, as has been said, and I ask the Minister to continue to look into the effects of the plan 2 scheme. Given my area is in the south-east of England, I would like to highlight the challenges faced by young people living in higher-cost areas.

I know that the Minister cares deeply about this issue, and it was a great pleasure to have her in Reading recently talking to families about special educational needs. She does care and she is looking into this issue, so I hope that we will hear more about it. We have had a terrible inheritance, but action has been taken, and I look forward to hearing more.

A particularly pressing issue of concern is youth unemployment, which has skyrocketed to record levels on Labour’s watch, with the unemployment rate for 16 to 24-year-olds at nearly 16%. Failing the youth of this country is tantamount to abandoning our future. It is because of the political choices made by this Government that young people are struggling to secure employment. We have the lowest graduate recruitment levels on record and 700,000 graduates on benefits. To make matters worse, far too many of those who can find employment are then stuck in an endless cycle of student debt, while taxpayers have to pick up the tab for those who will never be able to fully repay the balance and write off their loans.

I have been contacted by many graduates in Bromley and Biggin Hill who are deeply concerned about the freeze on student loan repayment thresholds. They see it as an unfair decision that heaps additional financial pressure on graduates, who are already struggling with the rising cost of living. In a sense, it changes the rules for graduates after the fact. For many, what was meant to be an investment in education and the future workforce now creates a sense of permanent debt, rather than a manageable contribution based on the ability to pay. This cannot go on, or we will risk undermining trust in the student finance system altogether.

The Conservatives have a plan: a clear new deal for young people—a step-by-step plan to fix what the Government are making worse. It is a plan that I fully support and that would be of huge benefit to young people in Bromley and Biggin Hill. Under our plan to abolish real interest rates on plan 2 student loans, we will ensure that student loan balances never rise faster than RPI inflation. For example, a doctor at Princess Royal university hospital in Bromley in 2029 with £80,000 of student debt would save £58,000 in lifetime repayments and clear their loan sooner. A graduate in Bromley with £40,000 of student debt and on a salary of £50,000 would save £26,000 in lifetime repayments and would clear their loan five years faster than under the current system. It is only the Conservatives who will end the unfair interest rises, fund 100,000 more apprenticeships and encourage young people into work with a £5,000 first job bonus. We have a plan to restore aspiration for young people; the Government are failing them.

I draw the House’s attention to my entry in the Register of Members’ Financial Interests, and in particular to my role as the chair of the all-party parliamentary university group and to my membership of the University and College Union.

I must note my shock and awe at the Conservatives’ decision to hold an Opposition day debate on the current state of student loans. It is a system that they created in government, that they subsequently broke, and that has left a generation of students and graduates utterly and comprehensively beaten. I remember well when they—with the support of the Liberal Democrats—tripled student fees in 2012. At the time, I was a student and the president of a sports club at my university. We saw a huge downturn in involvement with extracurricular activities that year, because of the additional pressure put on new students by the fee increase. Indeed, I remember very well that a friend who worked in the events team at our student union referred to October 2012 as “the death of fun”.

I accept that the sector needed intervention, and I believe that the architect of the policy, now the Lord Willetts, took difficult decisions that he felt were needed to make the university sector sustainable. I do not believe, however, that he had factored into his plan the Tories’ subsequent freeze in fee increases and repayment thresholds, or their later abolition of maintenance grants. Although the initial increase was a blow to students, the following decade of failed Tory policy has left our university sector in tatters. It has left our institutions facing years of staff dissatisfaction and industrial action, and it has created a whole generation saddled with unbelievable student debt. The Tories created, and then compounded, a system that looks like a graduate tax, smells like a graduate tax, and yet provides the uniquely deep personal pressure that sits astride hundreds of thousands of pounds of apparent debt, crushing millions of students who have been to university in the past 14 years. The Tories enacted almost irreparable damage on the university sector, and did immeasurable harm to a whole generation’s experience of university. The death of fun indeed!

I am amazed, then, at the decision to table this Opposition day motion. In choosing to tinker around the edges of the policy cesspit that they created over many years, the Tories exhibit the most unbelievable brass neck. There is not a hint of an apology for the damage that they did, nor a modicum of understanding of the work that this Government are doing to dig us out of the mess they left us in. The Government are taking the tough but fair decisions necessary to protect taxpayers and students now and for the future.

Under the system, lower-earning graduates will always be protected, with any outstanding loans and interest continuing to be written off after 30 years. I believe it is right that those who can repay their loans do so, and that graduates earning the highest salaries contribute more towards their student loan repayments, but the Government must also repair the damage that was left to us by the Tories. That is why I strongly support the Government’s plan to restore maintenance grants and increase maintenance loans in line with inflation, as I believe should always have been the case. These measures ultimately support low-income students to access, and participate and excel in, higher education. When I was teaching degree-level apprenticeships in electromechanical engineering, I saw what widening participation measures achieved in practice: it allowed access to education for people who did not otherwise have it. I saw the profound good that those measures achieved.

Universities UK still supports the income-contingent loan repayment system, which has facilitated a huge advance in access to university over the past two decades. It notes that more students from disadvantaged backgrounds have been able to enter university, and that the number of pupils who received free school meals and went on to university doubled from 2005-06 to 2023-24. Successive reviews of the higher education finance system have concluded that it is the fairest way of funding higher education. It was Labour policy, made when we were last in government, that achieved those significant improvements.

Although I acknowledge that the Government have a difficult time ahead in solving the Tory mess, I am deeply supportive of the Prime Minister’s huge new target for universities and apprenticeships: that by the age of 25, two thirds of young people should be studying for a degree or taking up a gold-standard apprenticeship. Labour is taking action to ensure that young people are either earning or learning, with 200,000 job and apprenticeship opportunities over the next three years. I also strongly support the £2.5 billion investment that forms the Government’s youth guarantee. We must use it to expand employment support, offer grants to employers who hire young people, and provide a jobs guarantee to create subsidised work placements for long-term unemployed 18-to-24 year olds.

I have said this in the House before, but I will say it again: this is a Prime Minister who promised change and then changed his promise. On this subject, we only have to look at his 10-point plan from 2020. He said:

“My promise to you is that I will maintain our radical values and work tirelessly to get Labour in to power—so that we can advance the interests of the people our party was created to serve. Based on the moral case for socialism, here is where I stand.”

In point 2, he said:

“Support the abolition of tuition fees and invest in lifelong learning.”

He was right that Labour won a landslide election, but, strangely enough, that promise has gone.

It was not in the manifesto.

Exactly. It was not in the manifesto, and the Prime Minister made a promise. He made a promise when he stood to be Labour leader, and it was not there. Worse still, what did he do in his first Budget? He increased student fees from £9,250 to £9,535. And last year, he froze the thresholds. That is important, because he promised one thing and then changed his promise.

When it comes to student loans, we have heard a lot of tittle-tattle on both sides of the House, but all parties—including the Liberal Democrats, wherever they happen to be—have a responsibility. In 1998, it was Tony Blair who brought forward tuition fees. He then increased them in 2004. Then there was an increase in the coalition years, which the Liberal Democrats stood on an election manifesto not to do. And here we are now, having just been over what the Labour Government said they were going to do and now have done.

Does it really matter? Yes, there was an issue hidden in the plan 2 student loan, but it has come to fruition because of what we have seen across the globe. I do not think anyone was raising those concerns back then, but the Government have to deal with things that come up. That is what we are looking for today. That is what students outside this place will be listening for. Two years in, what is the solution? At the end of the day, it is the middle earners who are being squeezed. It is unfair, because no matter how hard they work, their debt is going up. Principally, regardless of our political position, I think we all agree that is unfair.

The question is how we solve it. When the Chancellor was asked that question, she said:

“So, yes, we want to fix it. Yes, we want to make improvements. But is it front of the queue? No, it’s not... Politics is about priorities. I’m not denying there is a problem. I’m not blind to that, but what I do say is there has to be some patience.”

Tell that to the hon. Member for Kettering (Rosie Wrighting) or the people from Hinckley and Bosworth whose debt, no matter what they do or how hard they earn, is going up.

A constituent of mine, who aspires to be a GP, like the hon. Member, left university £44,000 in debt. She is actually paying more in interest than on her loan repayments. Does the hon. Member agree that the system deters graduates from following the very careers that we so desperately need them to follow in this country?

The hon. Member is absolutely right. I expect his constituent will be shocked to hear that this is not a priority for the Government. It is unfair, which is why the Opposition at least tried to put up a solution. I was expecting the Government to turn around and say why it does not work, and perhaps offer us something different. That is what the public and his constituent want to hear, and certainly what mine do.

The Chancellor went on to say:

“If you say to me, ‘you shouldn’t have done child poverty and you should have reformed the student loan system,’ I just strongly disagree with that.”

Actually, that is very honest. I give her credit for that, but look at the wider context and what that means for younger people. As we have heard, unemployment in the UK is at its highest since 2021, and since 2015 for those aged 16 to 24. UK youth unemployment, for the first time ever, is above the European average. Let that sink in. As I said to my right hon. Friend the Member for Sevenoaks (Laura Trott), 257,000 people left the UK last year when it was expected to be 77,000, and three quarters of them were under the age of 35. Those people will not be recorded among the number of young people who are not in employment, education or training because NEET numbers are not calculated to include such cases. So not only do we have youth employment going up, but herds of young people are moving elsewhere. That is a tragedy for our economy and for those young people, because they are having to look elsewhere to find work, the lifestyle they want and their place in the world. To me, that is really sad.

What is the Government’s solution? They have already increased taxes on businesses, introduced more red tape and seen youth unemployment go up, and they have said to businesses, “Do you know what we are going to do? We are going to give you £3,000 to rehire the person who lost their job.” They have created a hole and they are now trying to fill it themselves, but they are only filling it halfway.

The Conservatives have set out a solution in the document that we have brought forward. Agreed, it does not fully cover the entire student loan system, and I agree with my hon. Friends that the whole approach needs to be carefully looked at, but at least the Conservatives are offering solutions and have time to develop them. The Government are having meetings and talking, but I see no solutions, and that is a shame.

I declare an interest as I am a former student with a plan 2 loan. I became a student during the first year that plan 2 loans were introduced. I remind hon. Members that I had a very tough Saturday job when I was growing up, in case anyone is shocked that I am indeed young enough to be a plan 2 student.

Frankly, I am shocked at the brass neck of Conservative Members. When I was at school, I remember having conversations with other working-class kids like me who were thinking about going to university—I was the first in my family—who were being put off because the Conservatives had put up the fees from £3,000 to £9,000. There was no consideration then for what young people were going through. There was no plan for young people, and certainly not for young people like me, who grew up in communities like the ones that I grew up in, with parents who never had the opportunities that all the Conservative Members at that time had got for free.

As a doctor, I was lucky enough to have funding to go towards my education, but I am always surprised to hear people saying that we should put more funding into students on the back of the porters and the receptionists who never went to university. It is those people’s taxes that are supporting those students—that 50% helped to get me where I am. What does the hon. Gentleman say to people like those in his community? They are the ones who are being left behind by paying their taxes for other people to have their time at university.

The hon. Gentleman will be pleased that I am coming to exactly that point later in my speech.

Of course there are challenges with this system. There were challenges with it back when it was introduced in 2012. We pointed out the fact that there are huge generational inequalities: there are hon. Members present in the Chamber who did not pay tuition fees at all and had lower house prices when they graduated, so they could afford to buy a house. Those challenges continue, and part of the reason that I got into politics was to deal with those intergenerational inequalities. We all talk about broken promises, but what happened to the promise about levelling up? In my mind, levelling up was about creating more opportunities for young people in places like mine in Gloucester, but those opportunities were never delivered by the Conservatives.

I want what is best for young people and for the university sector in my constituency. I am delighted to be able to take this opportunity to welcome the brand new university campus that the University of Gloucestershire has opened in the city centre, taking over the Debenhams building and creating a new campus for students, with a public library, so that young people in Gloucester can see what that opportunity looks like going forward.

We need to ensure that we are creating opportunities for all young people, because despite the move towards more people going to university, only a third of people in Gloucestershire will go to university, and in the most deprived parts of my constituency, that number is fewer than one in five. That is why I am proud that the Government are introducing maintenance grants, and why I am backing the new target of two thirds of young people going to university or doing gold-standard apprenticeships, because university might not be the best route for everybody. Generations of young people in my community were left behind by the Conservatives, who had no plan in Government for young people in my constituency.

The hon. Gentleman is making an impassioned speech and we hear where he is coming from, but over the 14 years of Conservative Government, 800 jobs were created every day and unemployment was brought down to near record lows. Since his party has come to power, with the mission that he is describing, what has happened? Unemployment is up by 25% and youth unemployment has now eclipsed even that of Europe. The Government are not delivering. I hope in the next part of his speech, he is going to talk about what the Government need to do now in order to make things better for young people, because at the moment every indicator is going the wrong way, including the cost of student loans.

I am always happy to be educated by privately educated Oxbridge graduates who did not pay a penny for their student fees. The right hon. Gentleman will find that employment levels have actually gone up. The number of people in employment has gone up under this Government—[Interruption.] Well, that’s the stat. If he wants to check, he is more than welcome to.

I welcome the youth guarantee that the Government have talked about this week, introducing more apprenticeships and opportunities for young people and tackling the people in my constituency who have been furthest from employment. My hon. Friend the Member for Kettering (Rosie Wrighting) made a fantastic speech about some of the other things we are doing for young people. It is not just about education; it is about renters’ rights and expanding free childcare.

I am not privately educated, and nor did I go to Oxbridge. I am where I am today because I went to a state grammar school. The hon. Gentleman is making an impassioned speech about breaking down barriers to social opportunity. Would he agree that grammar schools are a key part of that?

Gloucester has a number of grammar schools and they are doing very well for the students there. I went to a grammar school—[Hon. Members: “Oh!] I went to a state school, and my parents worked really hard to get me there. If Members want to talk about my background, where I came from and how I got to this place, I am very happy to do that. It was quite different from the background of a lot of people on the Conservative Benches.

I am proud to stand here, as the son of a train conductor, talking about opportunities for young people in my constituency who have been left behind for generations, written off and, quite frankly, talked down to by the Conservatives, who talk about making sure that the arts are only for the wealthiest who can afford to go to university and not be spread out, as if education is not actually a benefit to everyone in society and should only be in the purview of those who can afford to pay for it. It is disgraceful, it is taking us back generations and, quite frankly, I am sick to death of hearing about it.

Politics is the language of priorities. As I have said, there are undoubtedly challenges with this system, but the Conservatives left behind so many messes after 14 failed years in government that we cannot fix them all in the first five years of a Labour Government. We are going to need at least a decade. We said that in the manifesto. We talked about a decade of national renewal, and we are committed to that because we cannot afford to fix all the messes that you left behind straight away because you left the economy in a mess as well—[Interruption.] Sorry, Madam Deputy Speaker. They left the economy in a mess—you had nothing to do with it.

I would say to the Minister, as a parent and as someone who is on plan 2 and has spoken to lots of my residents, that if there is money available and if there is an opportunity, we need to look at the expansion of free childcare. We are talking about priorities and how we can support young people at the moment, and the 30 hours of funded childcare is very welcome, but it does not cover the cost of childcare for people who are working full time throughout the year, not just in term time. That is preventing young people from starting their families and getting on, and this could be a really good opportunity if there was money available. This is about priorities and about how we can support young people. I welcome what the Government are doing, but if I were to give them a gentle nudge in any direction, I would encourage them to look again at what we can do to expand the offering of free childcare.

I am not going to take lectures from the Conservatives on young people. They had no plan for young people during their 14 years. They did not care about young people like me when they were in government. Quite frankly, they wrote me off and I had to fight my way to get here today—[Interruption.] Yes, I did go to a grammar school and I am proud of that. I did quite well for myself, but my parents sacrificed a lot for me to get here, so I am not going to take lectures from the Conservatives on that. This Government are fixing the mess that they left behind. Of course there are challenges in the system, but I welcome the measures that the Government have taken so far, and long may that continue.

Education is one of the few forces of life that allows a person not only to imagine a different future but to reach it. It is more than a qualification. It is more than a certificate. It is more than even a career. It is the moment where circumstance loosens its grip and possibility takes hold. A good education does not simply serve the individual; it strengthens families and it uplifts communities. It is the most powerful engine of social mobility we possess, and it is the surest path by which talent can rise, irrespective of where it begins. However, if we are to be true to that belief, we must confront a most uncomfortable question. What does it say about us as a nation if the very ladder we offer is weighed down by a burden that grows faster than the lives it is meant to lift?

Today, far too many graduates look not at opportunity, but at a balance that rises year after year, and not simply with the cost of living but more than that. This is a system in which interest is not just keeping pace with inflation, but outstripping it, and where the cost of learning risks becoming a source of anxiety that follows people into their working lives, their families and their futures.

This is not just an economic issue, but a moral one. Education should open doors, not cast longer shadows. The reforms that the Conservatives support are a simple settlement, yet they are profound in their principle. They would ensure that student loan interest rises only with inflation, not above it, moving from RPI plus 3% to RPI alone, and preventing the trap of pushing low to middle earners to pay more than the threshold.

I wonder whether the hon. Gentleman has read the IFS report evaluating his party’s proposal. It states that the proposal would do zilch, nada, zero when it comes to monthly repayments, and the IFS shows that lower and middle earners would not benefit at all. It is a plan for higher earners, isn’t it?

If the hon. Member does not want to tackle the problem of the inadequacy and inequality between a high earner on £150,000 who will pay off their debt of around £46,000 over an 11-year period, and a lower or middle-income earner on £50,000 who will pay off their debt of around £80,000 over a much longer period of time, then I am afraid the public watching this debate will have serious questions about the Government’s resolve in tackling this issue.

Will the hon. Member give way?

I will make a little progress.

The changes that the Conservatives propose would not remove responsibility for the student or change the process by which graduates repay, but they would fundamentally restore a sense of fairness. This is not about numbers on a balance sheet; frankly, it is about a young person deciding whether it is worth taking the risk of going to university. It is about a graduate wondering why their debt grows despite doing everything right, and it is fundamentally about trust that if people work hard, play by the rules and invest in their future, the system will be fair in return.

We return to the timeless understanding that education is in the interests of us all, not just because of what it gives to an individual, but because of what it gives to society as a whole. I think of the words of Benjamin Franklin, who said:

“An investment in knowledge pays the best interest.”

This Opposition debate brings to mind the old proverb that the best time to plant a tree is 20 years ago, and the second-best time is today. During this debate, we have heard from Opposition Members who were part of the Government who planted that tree and proceeded to do absolutely nothing while it grew wildly out of control, until today apparently. I will come on to their motion. Whether those Opposition Members are Conservatives, Liberal Democrats—whose leader was a Minister in the coalition Government—or Reform, which is starting to look the part of a 2019 Tory tribute act, it is down to them, because they planted that tree.

That irony is not lost on me, and graduates in Stevenage and across this country understand that context all too well. Graduates face interest rates that begin accumulating from their first day of study. They see their loan balances rising even as they make repayments year after year, and they tell us time and again that the situation feels hopeless. They shape real decisions about work, housing and family life. They affect the very people powering our economy, raising the next generation and driving the growth that this Government are creating. Some Opposition Members have the audacity to look at this misshapen, neglected tree and ask why it offers so little shade to the graduates standing beneath it.

This Labour Government have taken on the task of fixing 14 years of mistakes and failures with the commitment and energy that is required. As Full Fact’s manifesto tracker has confirmed, two thirds of our pledges are either already delivered or on track—far more than can be said for the previous Government. One of the key missions in the manifesto on which I stood was to remove barriers to opportunity for our young people. Millions of our young people did everything we asked of them—they studied, they trained and they invested in their futures. They kept their part of the bargain, and they deserve a Labour Government who support them, rather than a Government who quietly undermine their ambitions, as happened for so many years.

I am probably one of the very few people in this House who benefited from not going to university—I did Open University later, so luckily I did not have a student loan, and I am probably a little on the old side as well. However, there is something fundamentally unfair about the Government’s policy. Does the hon. Gentleman not accept that the young people who he talks about so passionately are being penalised by his party? He has talked about track records, so can he explain why youth unemployment is going up under this Labour Government?

I thank the hon. Lady for her intervention. [Hon. Members: “Right honourable.”] Yes, right honourable —I remember her time as Chief Whip. Like her, I did not have the burdens that people who went to university after me had to face, so I am very conscious of my responsibility to those generations and the generations to come. I am glad that the right hon. Lady has raised the issue of young people, because this Government recognise the extra pressures that young people face. That is why we are taking measures to help those who are feeling the pressures of the cost of living, whether on transport, childcare, or so many other things. We are helping our younger people and looking at how we support our students into the future—we are bringing back the maintenance grants that I benefited from all those years ago.

Will the hon. Gentleman give way?

One more time.

The hon. Gentleman said that the Government are helping young people, and mentioned transport. Bus fares have gone up by 50%, from £2 to £3; for somebody who travels every day to work and back, that is £500 a year out of taxed income. That is not helping. Fuel duty is going to go up in September—that is not helping. The cost of heating oil is going through the roof, and there is going to be nothing for anyone who goes to work—that is not helping either. Can the hon. Gentleman start to look at the reality of what is happening? It is not good for young people, and unemployment among young people is going up, not down.

I respectfully disagree with the right hon. Gentleman. He took me to task on transport; I come from a constituency where we desperately need more bus services. That is why we now have the Bus Services Act 2025, which I believe he would probably have voted against. We are making a difference for young people, and indeed all people who need to use those services.

The greatest responsibility we owe to the generations that will come after us is providing them with opportunities and lifting them up, not holding them back. We need to look at the tough issues and find answers to them. What the Opposition have tabled today is a motion that suggests that they can fix their own broken plan 2 loan system by

“controlling the number of places on university courses where the benefits are significantly outweighed by the cost to graduates and taxpayers.”

How on earth are they going to find out what those courses are? The shadow Secretary of State, the right hon. Member for Sevenoaks (Laura Trott), plucked some of them from the air—“Oh, we’re not sure about some of these creative arts courses.” How is she going to evaluate that? Are we going to have a commission? Is the party of the free market going to control the market? How is it going to do that?

I am afraid that I will not give way, because I want to explore this a bit further.

The Opposition really have not thought this motion through at all. Are they going to have a commission saying, “We have worked out that this degree is going to produce this value”? How is that going to affect the economy at a time when we perhaps need more creative degrees? How is this all going to work? There will be more bureaucracy and more costs, and the price is going to be paid by our young people who cannot choose their own futures. That is what would happen if this really misguided motion were implemented. This plan is not even half-baked—it is as oven-ready as Boris Johnson’s pathetic Brexit deal, which this Government are trying to fix.

We cannot change the moment when the tree was planted by Opposition parties, but we can tend that tree now. I have full faith that this Labour Government will do just that.

Royal Assent

I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Acts:

Supply and Appropriation (Anticipation and Adjustments) Act 2026

Finance Act 2026

House of Lords (Hereditary Peers) Act 2026

Universal Credit (Removal of Two Child Limit) Act 2026

Industry and Exports (Financial Assistance) Act 2026.