𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Keir Starmer is under pressure to announce yet another u-turn after Conservative leader Kemi Badenoch humiliated him in Parliament over Labour’s decision to increase student debt repayments. The debt – effectively a tax paid by working graduates rather than students – will increase in real terms following Chancellor Rachel Reeves’ decision to freeze repayment thresholds. The stealth tax means that payments will rise due to inflation, known as fiscal drag. But under pressure from Mrs Badenoch, Keir Starmer told the House of Commons today: “We will look at ways to make it fairer.”

He was skewered by Prime Minister Kemi Badenoch in PMQs as she pointed out that Sir Keir once promised an end tuition fees entirely, when he was trying to appeal to left-wing Labour activists during the Labour leadership contest. Mrs Badenoch said: “To win the Labour ladership, he promsied to abolish tuition fees.” And she asked: “Why is the Prime Minister taking from students to give to benefits street?”

The tax hike on working graduates has proved the final straw for many younger voters who already believed the student debt system was deeply unfair. Conservative leader Kemi Badenoch has pledged to act by offering a “new deal” for younger workers and Martin Lewis, the founder of the Money Saving Expert website, has condemned the increase.

The Treasury and the Department for Education are now understood to be holding talks about the reversing the freeze, announced by the Chancellor in last year’s Budget. Education Secretary Bridget Phillipson has previously hinted she believes the system must change.

The threshold for repayments for students on the “Plan 2” version of the scheme has been frozen at £28,470. Graduates on the scheme pay 9% of any income over the relevant threshold.

In theory payments end when the debt has been repaid, but as there is a maximum interest rate of 6.2 per cent, many graduates never repay the money. Repayments can also end after 30 years, which means that workers can be paying so-called student debt into their 50s – but debts for the most recent students can last 40 years.

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Earlier this week Mrs Badenoch said: “We want to change what is going on with Plan 2, where a lot of young people are paying more and more and they’re not clearing any of their student debt, it’s actually increasing.

“And this is getting worse because of the changes that Rachel Reeves made in the budget, freezing the thresholds, meaning more money is going to be spent effectively on a tax to pay for benefits. That’s not right.

“So we want student loan payments to be inflation only, not inflation plus 3 per cent and that’s something that’s actually going to make life a lot easier for many young people who are coming out with huge debts, they can’t buy a house, they’re not starting families, and they feel like the world is against them.”

Labour’s U-turns have included:

• Announcing a national inquiry into grooming gangs after previously refusing
• Sir Keir claiming that “trans women are women” and then saying “a woman is a female adult” – a definition that appears to exclude trans women
• Scrapping the two-child benefit cap, which Labour previously supported
• Refusing to give compensation to women affected by state pension age increases, even though Sir Keir previously supported their campaign
• Reversing plans to limit winter fuel payments. Some changes were introduced, but far less radical than the original plan
• Reversing plans to limit benefit cuts for people with medical conditions and disabilities. A commission is now looking at the issue instead
• Increasing National Insurance for businesses, despite Labour’s manifesto pledging: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT”
• Extending the freeze on income tax thresholds – effectively increasing income tax for employees – despite previously saying it would “hurt working people”
• Scrapping plans to give workers full legal rights from day one in a new job
• A partial U-turn over inheritance tax on family farms
• Promising support for pubs to offset a huge increase in business rates
• Scrapping plans to make digital ID cards compulsory to prove the right to work in the UK
• Agreeing to release documents relating to the appointment of Lord Mandelson as US ambassador
• Abandoning plans to delay some local council elections

Sir Keir is now under pressure over plans to hand sovereignty over the Chagos Islands to Mauritius, after US president Donald Trump said the agreement was a “big mistake” due to the joint UK-US military base on Diego Garcia.