Student Loans
Adam Thompson Excerpts(6 days, 10 hours ago)
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Neil O'Brien (Harborough, Oadby and Wigston) (Con)
In January, the Chancellor was saying that the student loans system was “fair and reasonable”. She now admits —as of yesterday—that it is broken. In one sense, we have won this debate even before it started. The Government say that they are looking at these issues, but they would not be looking at them if it were not for the Opposition raising them, and I do not find the promise to “look at these issues” very reassuring, given their track record.
In the run-up to the last election, the Education Secretary promised: “Graduates, you will pay less under Labour”. Unbelievably, that is still up on her website. Instead, Labour has increased fees so that graduates are paying more, not less. On top of that, the Chancellor has cut the repayment threshold in real terms so that graduates are paying a further £250 a year. Actions speak louder than words.
To get elected as Labour leader, the Prime Minister promised to abolish tuition fees. Instead, he has increased them. He used to say, “We need to end the scandal of spiralling student debt,” but now he is letting it spiral. When the Minister says, “We will look at it,” we are not reassured. I thought the best speech of the afternoon was from the hon. Member for Gloucester (Alex McIntyre), who said in plain terms that he would not prioritise fixing this problem and would spend the money on something else. That kind of blunt honesty is better than the line from the Chancellor, who says “Graduates, your call is very important to us. Please continue to hold, and eventually perhaps we will do something about it.”
This system was set up with the best of intentions, but I have been arguing against it for as long as I have been in this House. The above-inflation interest rates have long been recognised as a problem. That is why our 2022 reforms abolished real-terms interest rates for all future students, but now we need to go back and end these unfair challenges for past students too.
There are lots of different ways to explain how unfair the current system is. Those on plan 2 are paying back far more than they ever borrowed. The typical plan 2 graduate needs to earn £66,000 a year just to keep track with the interest. The total volume of money owed by plan 2 students is increasing every year, even though no new loans are being taken out and they are paying back billions every year. Between the lower and upper interest rate threshold, for every additional £100 a graduate earns, they repay an extra £9, but their debt also accrues an additional £7.20 in interest. In fact, a plan 2 graduate who has £69,000 or more of debt—a doctor or someone like that—sees their debt increase faster as their earnings and repayments increase, because the interest effect outweighs the repayment effect. It is a totally perverse system.
Adam Thompson
The hon. Member talks about the effect of interest over time. Given that the loans are eventually written off under the current system, can he tell me what threshold a salary would have to be at for the proposed changes in interest to make any realistic difference over the course of a graduate’s entire life?
Neil O’Brien
Yes, and I am grateful for that question. Under our proposed reforms, four fifths—80%—of plan 2 graduates would benefit and pay less over their lifetime. The hon. Gentleman can look up all this stuff on the IFS website if he wants to check.
There are so many personal stories here. The other day, one doctor was recounting how she graduated with £75,000 of debt, has worked hard for years and has paid off every year, but she now owes £90,000.
Oral Answers to Questions
Adam Thompson Excerpts(2 weeks, 1 day ago)
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Pat McFadden
Precisely because we are tilting the funding more towards youth apprenticeship starts, we will arrest the decline that happened when the hon. Lady’s party were in power. Change needs to come to the system if we want to do that, and I believe it is the right choice. The effect on young people who come off education and go on to benefits can be lifelong, so it is right that we prioritise them in the system.
Adam Thompson (Erewash) (Lab)
The Secretary of State for Work and Pensions (Pat McFadden)
The right hon. Alan Milburn is making progress on his report. He brings valuable experience as a former Secretary of State for Health and former chair of the Government’s Social Mobility Commission. He is engaging with stakeholders across the country to increase the understanding of what has driven the increase in NEETs in recent years, and his interim report is due later in the spring.
Adam Thompson
With almost 8% of 16 and 17-year-olds not in education, employment or training, Derbyshire is the worst county in the east midlands for NEET. In New Stanton Park in Ilkeston, on the former site of a once-famous ironworks, major investments are bringing good manufacturing jobs back to Erewash. Will the Secretary of State share the work he is doing to ensure that apprenticeships are available to disadvantaged young people so that they can thrive, instead of being left behind?
Pat McFadden
My hon. Friend brings valuable experience to this matter, including his experience of teaching engineering apprentices at the University of Nottingham. We are committed to ensuring that disadvantaged young people have access to high-quality apprenticeships and can benefit from the new jobs being created in places such as Erewash as a result of the changes in how the growth and skills levy is used—as I have explained in response to earlier questions—and the extension of youth hubs in the region to give young people who may not be claiming benefit or undertaking an apprenticeship the chance of finding that vital first job.
Budget Resolutions
Adam Thompson Excerpts(3 months, 3 weeks ago)
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Adam Thompson (Erewash) (Lab)
Undoubtedly my constituents will be watching this Budget debate closely, asking what it means for them and whether it will sort out the cost of living, fix the NHS and help pay down the national debt. What they will have seen from my right hon. Friend the Chancellor and her ministerial team is a Budget with those issues at its heart.
Over 14 years this country experienced the steepest fall in living standards in living memory. The planned rise in the minimum wage next April is just one step towards alleviating those problems for the lowest paid in society. The youngest full-time workers will see a nearly £5,000 pay increase. Coupled with £150 off household energy bills, this Government are literally putting money in people’s pockets. Unlike the Tories and their latest rebrand, Reform, I will be proud next week to back a Budget that backs working people.
There is a simple truth: when workers are paid well, they work better. When working people have more money, the economy grows. I was delighted to hear in the Chancellor’s statement the announcement of the Team Derby initiative, a new roaring engine for the east midlands economy, creating high-paid, good-quality jobs in my home in Derbyshire. For children in Ilkeston and Long Eaton, new free apprenticeships in SMEs will be something to truly aspire to when they come out of school, as good as any university degree.
In Erewash, waiting times for GP appointments are a full week longer than the national average. It is fundamentally wrong that people in Ilkeston do not get the same standard of care as people who live here in London. We need to build a truly national health service, ending the postcode lottery for good. In this Budget, we have 250 new neighbourhood health centres. That will hopefully mean that the days of my constituents commuting into Nottingham or Derby for minor scans or blood tests might soon be over.
To address those who say that we can borrow without end or cut Britain to oblivion, or who think that tax cuts for the wealthy would somehow magic us into economic growth—or, if we ask the Greens, perhaps hypnotise us into physical growth—we already know where those ideas lead. All of those options were tried and tested during the 14 long years that the Conservative party were in control of the Government. It left them in the moribund electoral doldrums where they now find themselves. First, they tried to cut their way out of a recession. Interest rates were a fraction of a percent, yet they did nothing to invest in and grow our economy. The NHS fell to its knees, businesses stopped growing and wages went down in real terms. Even their own Back Benchers—what is left of them—and party members were not happy with their approach.
After 12 years of trying one failed scheme after another, and eventually running out of even vaguely credible ideas, the Conservatives tried something new: they made Liz Truss Prime Minister. I think we all remember how that ended, with the abject chaos of the Truss mini-Budget , filled with uncosted spending commitments, tax cuts for the wealthiest and nothing short of an economic Hindenburg. Who paid the price for that chaos and that economic crash? It was working people—families in Long Eaton, Ilkeston and Sandiacre—with mortgages sent sky high, and in some cases doubling, savings wiped out and inflation run amok.
Who supported that vandalism? While Conservative Back Benchers were pulling their collars, nervously sending furtive glances in the direction of their majorities, who instead gave Liz Truss their full-throated endorsement? It was, of course, the fake patriots and faux defenders of working people at Reform UK. They are fake patriots. Simply put, they cannot love this country if they want to sell it out to foreign billionaires—or Russian oligarchs, for that matter. If they want to charge people money to use our NHS, if they want to cut the minimum wage —taking money out of working people’s pockets, so that it can be given back to their bosses, tax-dodging corporations, millionaires, billionaires or shady party donors—and if they want to see a return to years of dredging austerity, they do not love this country.
This Government are investing in Britain, in its people, in families and in our economy fairly and sustainably. We are on the long road towards fighting back against the cost of living crisis, to make life in this country affordable again. We are getting the NHS back on its feet, cutting waiting lists, ending the postcode lottery and putting healthcare back in our local communities, where it can make a real difference. There will be no more squalid years of austerity, and no more failing working people. This Budget puts working people back at the heart of our economy, and I am very proud to support it.
Welfare Reform
Adam Thompson Excerpts(1 year ago)
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Liz Kendall
I hope that from now on, hon. Members will focus on the proposals that we are actually putting forward. Culture really matters—that is why we launched an independent investigation into the carer’s allowance overpayments; we want not just to be told that we are putting things right but for independent voices to say that. Many of our work coaches in jobcentres are absolutely wonderful, but I have heard from other hon. Members about work coaches ringing deaf people. We must start changing that, looking at our training processes and putting all these things right so that everyone is treated with the dignity and respect they deserve.
Adam Thompson (Erewash) (Lab)
In Erewash, there are many disabled and sick people who can never work, but who are forced to jump endlessly through hoops for the benefits they need to survive. I welcome the Secretary of State’s plan to switch off reassessments and end the needless stresses that these people must endure. Will she elaborate on those plans?
Liz Kendall
This is something that is personally important to me and the Minister for Social Security and Disability. We have seen cases in which, unbelievably, people whose disability will never change, or whose health condition will only get progressively worse, are being reassessed. While we switch reassessments back on and make them more face-to-face for people on the health top-up, we really want to ensure that there is dignity and respect for those who can and will never work. I would be more than happy to write to my hon. Friend with more details about that proposal in the Green Paper.
Oral Answers to Questions
Adam Thompson Excerpts(1 year, 1 month ago)
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Alex Ballinger (Halesowen) (Lab)
Adam Thompson (Erewash) (Lab)
The Minister for Social Security and Disability (Sir Stephen Timms)
We will champion disabled people and those with long-term health conditions. Our “Get Britain Working” plan will support many more who were failed by the last Government to enter and stay in work. We will devolve power to local areas for a joined-up work, health and skills offer.
Sir Stephen Timms
My hon. Friend is absolutely right. The manifesto on which he and I fought the election committed us to putting the views and voices of disabled people at the heart of what we do. In the “Get Britain Working” White Paper, we announced the establishment of a disability employment panel to enable us to work with disabled people, ensure that we provide the necessary support and give them the chances that my hon. Friend rightly calls for.
Adam Thompson
In 2019, my close friend and constituent Jim was at his desk, working as a web developer, when out of the blue he felt a sudden pain. Jim was having a spinal stroke. He has never since been able to walk. The pain medication that Jim must take to manage his condition limits his ability to work, but sometimes he has unpredictable bursts of productivity. However, Jim’s benefit arrangements mean that the work that he could occasionally be able to do might result in sanctions to his benefits. What steps will the Minister take to ensure that Jim can get back into work?
Sir Stephen Timms
My hon. Friend’s important point, which to some extent has already been raised, shows how the health and disability benefits system needs to be reformed. Disabled people should have the same right to work and the same opportunities and chances as everybody else. Many disabled people like Jim want the chance to work, but they face barriers, including in the benefits system, that make it very difficult for them to do so. We are determined to change the system to get over those barriers.