Overcoming Political Stagnation and Fatigue

Do you keep hearing podcast ads like this one, for example, but always wonder how you actually get involved with them for your own brand or organization? Well, it's easier than you think. We're ACast, and we give you the platform to do it all yourself. Browse thousands of popular podcasts, choose the shows that match your perfect audience, set your budget and launch And if you want a hand, our podcast specialists are there to help you launch with confidence. This is podcast advertising without barriers. Get started at aast dot com slash advertise Why don't you just do your job? Do your job? It's a politics cast. Back in February Tensions around the extortion of interest applied to student loans exploded in the media. Oxford, Cambridge, Cambridge, LSE, everything they paid does not cover One year of my tuition. Do you think that's fair Graduates lamented high interest rates, claims of missselling and frozen repayment thresholds. For the first time in a long time There seemed to be a general public consensus that the situation was unfair And for a brief moment It looked like the government was going to do something about it. I was glad to learn that the leaders of the opposition has finally admitted that they scammed the country. We inherited their broken student loans system. Back in March, MPs invited anyone over the age of sixteen to contribute their experiences and views on student debt directly through an online survey The published summary from the Treasury Committee is damning Out of fifty two thousand responses, forty thousand said that the financial impact of repaying their student loan. combined with a level of tax was worse than they expected forty three thousand said the level of interest and repayment was not reasonable And over two third said their repayments had a material impact on their financial planning for the future Perhaps most Aming is over half so they did not understand the terms and conditions of their student loans before they took them out. I'm joined by Baroness Ruth Davidson. who is today launching a new campaign calling on the Chancellor to rip up the student finance system and make it fit for purpose She's been a member of the House of Lords since twenty twenty one Leader of the Scottish Conservative Party from twenty eleven to twenty nineteen And leader of the Scottish Conservative Party in the Scottish Parliament From twenty twenty to twenty twenty one I think the student loan system in England and Wales is desperately unfair. And the reason it is is because you can pay and pay and pay for decades and still the balance of your loan doesn't go down. so what you owe doesn't go down because of the way the interest is calculated. And they calculate the interest on something called RPI plus three which is a system that they would never use and don't use for things like welfare benefits. So the government chooses not to use that for anything other pretty much than student loans. and also they can change the rules on it. So you can sign up when you're a student But then the government at any point can change, for example, the threshold that which you're paying back, which they did in last year's budget. Now Banks aren't allowed to do that Loan companies aren't allowed to do that. Like the law stops other people from doing that But they don't stop it for student loans and the government can change it as it is. So we think the time has come for a fair deal for students and graduates across this country. People have done everything that they were asked to do You might be asking yourself id the Conservatives not bring this in? Why now Let me give you a little timeline of how this all came to be In nineteen ninety eight under Tony Blair The framework for today's disastrous system was set up. Upfront tuition fees of one thousand pound per year were introduced in England and Wales Maintenance grants were largely replaced with loans And the modern income contingent student loan system began In two thousand four, Blair struck again narrowly passing the Higher Education Act, with which universities were allowed to charge up to three thousand pounds per year from two thousand six. Universities became increasingly dependent on tuition fee income rather than direct government teaching grants Then came twenty ten Austerity George Osbne David Cameron and the Brown with an E review Tuition fee cap increased from three thousand pounds to nine thousand pounds New borrowers entered what became known as Plan two Repayment threshold increased from fifteen thousand to twenty one thousand pounds Interest change to RPI plus up to three percent depending on earnings. and loans would be written off after thirty years. The big change happened in twenty fifteen When retrospective alterations were applied to Plan I student loans that had already been signed And here lies the contention The real issue that we have is a Plan two student loan. So that's people that are roughly now agge between twenty one and thirty five. They went to university between twenty twelve and twenty twenty three. And they are facing thirty years of repayments nine percent. where the interest is something called RPI plus three percent. So that could be up to like kind of six point three percent of that Your repayments never reduce so youre still paying the same every single month yourour loan balance isn't coming down. So what you always isn't coming down because the interest is so high. So you can be paying thousands of pounds per year and only see what you oe grow. And the average person that's graduating is graduating with over fifty thousand pounds worth of debt. That's a lot of debt for somebody starting out in life to be hanging over them And the issue that we also have is the Institute for Fiscical Studies has say that you have to start You have to get to sixty six thousand pounds a year in salary to start paying off the det. the rest that you're paying and you're paying it every month on top of your tax and top of your national insurance and top of your pension contributions, you're paying basically tax a studentt las tax though And yet it's not going down. And that's the problem that we have is this manifest unfairness about the way the interest rates work and the fact that the government can change the rules on you once you've signed up to it. So we want to see that changed Do you keep hearing podcast ads like this one, for example, but always wonder how you actually get involved with them for your own brand or organization? Well, it's easier than you think. We're ACast, and we give you the platform to do it all yourself. Browse thousands of popular podcasts, choose the shows that match your perfect audience, set your budget and launch And if you want a hand, our podcast specialists are there to help you launch with confidence. This is podcast advertising without barriers. Get started at aast dot com slash advertise Do you think it's sort of just the RPI that can be corrected? Do you think it should be a different metric? Is that how you're looking at this So we're asking for the government to go off and do the work on this. and the reason that we've launched the campaign is because there's kind of a realization now that the time has sort of come to look at this. We've got all the data, we know what's happening You know, we've got people like the Institute for Fyscical Studies highly respected that's looked at this. They say that right now, a graduate on a plan two has to be paying about has to be sorry, getting paid about sixty six thousand pounds a year in salary before their balance comes down and the rest of it's just interest. So they're continuing to pay nine percent per year on top of pensions, national insurance, so it is like a tax, but their balance isn't coming down. So they're paying for decades And we've got things like The MPs in the House of Commons have started waking up to this. So there's now two House of Commons committee inquiries, One from the ducation commommittee that's looking at how you fund universities and one from the Treasury commommittee that's looking at what students are paying. And you've also seen things like the Conservative Party have moved on this. and what we across UK are saying is look the next part of the jigsaw to really push the government to move and that's who we need to move is to get people at home to sign up. So whether you're a student now, whether you're a graduate that's facing these fees, whether you're a parent of a graduate or a grandparent that understands the difficulties that people are having, or whether you're somebody like me who is incredibly lucky, who's got a child that isn't faced with this because they're too you and they're not unqu yet and is too old themselves to have faced it, but just cares about the fact that this is uniquely unfair in a way that we don't have for other loans, bank charges, et cetera. Get online, go to www. fairfes. u. So that's fairfes. uk Sign up and if you arere one of the people affected, also tell us your story Because what we're going to try and do is kind of get the government over the edge in terms of moving on this by having a real movement across the country, but also just having the case studies to show just how much it affects people. They can't get on the housing ladder, start a business, get married, have children. It affects your decision making This government says it wants growth. This is one of the things that's stoppking growth in this country. It's really interesting to hear you say that actually, because I think children is a really a big buzzpo at the moment. You know You've got a lot of politicians asking, why on earth are young people not having children? And do you see this then as one of the hurdles? Do you think it's an affordability crisis? Oh completely. So if you're talking people talking about people that've got marginal tax rates over fifty percent because they've got this nine percent added on You know, you you There is also an issue about do you want to knock your pan in and do extra hours to get a promotion if you're only going to see half of the money and it's probably not that much going up the ladder anyway. You know Do you think that creating the you know saving a deposit is conceivable, whether it's something you can do if you're paying this much extra in tax if half of everything that you earn is going out the window And also how do you plan for the long term If you know that you're going to be paying this off for thirty or if you've got a plan five loan forty years of your life And I think the bit that really gets me is the treasury itself knows that about fifteen billion pounds of interest is added onto these loans every year. So fifteen billionars of interest F fiveive billion is being paid off the loan. Well, Nighor so as well as the interest keeps growing, so what you owe gets bigger every year, even though you're paying thousands of pounds but also All these loans are going to get written off. So we've got a ticking time up. The maths doesn't work for anybody here. So what we're saying is Go back, look at the system, acknowledge this system doesn't work. Let's change the system Let's get a loan that people can realistically repay Let's have one that rewards work rather than punishes it. Let's share the cost fairly and have one that doesn't get rewritten after you've signed up to it They're the principles we want the Treasury to act on How they do that within those principles up to them. But let's make the Treasury act an act now because this is ticking time bom for individuals, but also for the country And it's two really distinct issues isn't it with student loans? becausecause I think a lot of the time the conversation gets co opted by is university worth the money? know shouldh we really be paying nine thousand and fivealf thousand pounds every single year for the course that students are receiving. But that's not really what you're talking about here. You're talking specifically about the terms of the loan. Do you think that gets more Do you think more people in the country understand the sort of How unfair the system is if you're looking at specifically the terms of the loan rather than the affordability in general of university So I think if you're each between s twenty one and thirty five, you absolutely do understand the terms of your loan because you' the ones that have got the worst deal of all. Like absolutely cracker jack dreadful deal, which is the plan two. That's the one that is really killing people. Plan five is spread out over forty years rather than thirty, so it's a longer term issue the repayments are slightly lower. So in terms of impacting that ability to do the things that you want to do, buy a house, start a family, all that sort of stuff, it is slightly better. so it's a slightly better It's still a difficulty. and I think there is a question about that gets raised all of the time about, look, who really benefits from becoming a graduate? Is it the country because they have more doctors, more architects, more people that can do high end jobs that require further and higher education? Is it the student because they can earn so much more Well I think actually if you've got half of all people going to university So benefit of earnings You know, your personal benefit doesn't go up that much because there's another forty nine and er point nine nine nine nine nine percent of the population that are in the same boat as you. they also have torees. So we can have an argument about degrees are worth and what you should pay for them We're actually looking at the back end of this. We're like let's fix this system How can we have? Joint fair payment for further in higher education because it does benefit the country and it does or should benefit the individual, but it has to be repayable because this is not working Now have to I have to point this out, but I think the people who are listening to this might say, well, look, you know, you are You've had the Scottish Conservative partarty and it was the Conservatives who brought this measure in down in England What has changed? What has changed in your rationale Yeah So we didn't bring it in, but we did make changes back in twenty twelve. The parties has acknowledged that they were the wrong changes. You've actually seen Kemy Baidnoock has brought forward a new deal for young people. We think in Prosper UK, who's launching this campaign, we think that that's a good first step. I think the issue with it is that it doesn't It does very little for particularly the lowest twenty percent paid of graduates. It does more at the top end and it's got some great things talking about apprenticeships and other stuff for technical training. But we also think that fundamentally, it is broken. The system does not work. It doesn't work for young people, it doesn't work for the country. And I think if you've got a system where you're paying, no matter what you earn, you're paying an extra nine percent acting like a tax on top of everything else you pay every single month, But you've got to reach sixty six thousand pounds a year salary before you're reducing anything that you all Bea that nine percent from from, you know, you could earn from twenty grand to sixty six thousand pounds, you're paying nine percent a year every every month and you're not reducing what you owe. It's just getting bigger and bigger and bigger. And that's the issue. It's the compound interesting sorry, it's sort of the interest that's being charged and the terms under which it's being charged is manifestly unfair You, you've launched this new organization and this is part of This is one of also your policies so one of your pushing for at the moment. and it's called prorosper and you're looking For you're trying to look out for millions of people who you say want a centrist politics canan you tell me What does that mean centricism? Whatentris. So we got together's a bunch of kind of center right toories. So it's myself, Andy Street used to be the mayor of the West Midlands, Amber Rod, David Gok, used to be a treasury minister Amber, used to be the homeome seecretary, et ccera like that. So a bunch of people that got together and said, look, voice. that's really missing is in the middle So we know there's about seven million people in the UK that don't think there's any political parties that represent them. They think that the Labour Party's gone to the left. They think the Tories have gone to the right, and they think that the loudest voices are even further left and right, whether that's reform or restore on the right, whether that's the Greens on the left. And people in the middle are just getting ignored and And what we thought was a unifying factor for that is irrespective of whether you usually vote Tory labour, let dem, whatever is the fact that we all feel when the country's poorer, we all feel when tax rates are high, we all feel when Britain doesn't like it's going forward. It feels like it's in decline. You know you can feel it in the country, the sense of lack of hope and that things are tough and they've been tough for ages and they're not getting any easier and people don't have money to spend And what we wanted to do was bring people no matter who they vote for together to look at policies that will drive the economy, and that will also make other decisions easier. So you know we've signed up since the start of the year. moreore than twenty thousand people have become registered supporters for us've done events Cardiff and in Edinburgh And in Liverpool last week they were trying to get politics out of Westminster and what's really You know, I think helpful for us is just over sixty percent so between sixty and sixty five percent of our supporters didn't vote tory at the last election. This isn't just Tories talking to themselves. It is us trying to find areas where we can get common ground and push the country forward. We're doing lots of different things, so as well as this our first campaign to actively push government to do something. but we're also meeting with businesses, looking at sectors who feel particularly hard done to. So I did an event in Edinburgh with retailers. So high street shops, feeling the pinch right now. We've done stuff with pubs, we've done stuff with arms, with defense manufacturers, we've done stuff with people in lots of different areas around the world. sorry, around the economy but also Yeah we have. we're trying to we're trying to kind of create a momentum for ourselves. But we've also put in place All right different policy strands. So we've got a commission that's looking at house building at the moment because we think that's one of the areas that's blocking the UK economy. We said when we started, we would be honest talk about trade offs and we would go past the top line. So it's not just Here's a thousand extra police officers or something like that. We would say, look, here is what we think an issue is, hereere's how we solve it. Here's the problems with that. Here's a potential way forward. So it will be quite complex and quite dense. We're not going to apologize for that Part of the issue we've seen in the UK recently is there's been a bit too much politics and not enough policy. And people that want to pretend that you can have your cake and eat it and things don't cost money. And at the root of one of the things we're also looking at is generational or intergenerational unfairness. So looking at whether there are parts of the economy, so younger people and older people that are getting a different deal from government as well. So we've bitten off a lot Hopefully, we can still tew it But we are trying to do so we're not quite a think tank. We're a bit of a think tank plus, but we are doing policy work as well Do you think it's born out of fatigue with the sort of the more extreme politics that we've seen over the last couple of years Oh God yes Genuinely, I think there are people look at the television, look at particularly the interternet and social media. abbsolutely despair And is fair for a number of reasons. One is that You can't have good faith disagreement anymore So the person that you have, you know, you think We both need to fix a thing. You want to fix it one way. I want to fix it the other way. It used to be that you'd say, look, my way iss better because of X, Y and Z and the other person would say, no, no, no, my way like addresses this problem and that's a more important part of the issue. These days it's not like that. These days it is, you have to do it my way or you're wrong or a traitor or evil or're you know you're betraying people. And the language that we're using is just so unhelpful seems to be that If you can't make something perfect, you shouldn't even make it better So there is a sense that you've got to do everything all at once rather than taking small steps to making things better.. do think that that turns people off. this idea that You've got to have one hundred percent of the answer, one hundred percent of the time. It's got to be ideologically pure or you are wrong, evil, betraying, you know traitor cast out. and we've got to get beyond that because we have really serious problems in this country and we' got to start fixing them. And even if we fix them a bit at a time, that's better than not you know having an argument and not fixing them at all. Is that why you think it's stagnating, perhaps I think it is. I also think there are structural problems that we see in the United Kingdom and you know you hear front line politicians, you know, my days of being the frontline are behind me. I'm doing this because, you know, I want to help and use some of the experience I've built up to help a bit. But but you see people absolutely talking about world economy, what's happening in Iran right now, what the impact of the Middle East in conflict or Ukraine is. None of that is wrong. I mean, all of that stuff exists But there are also decisions that we can take now in this country. We have agency over how we improve things. We can look at what's stagnating the housing market here. We can look at why there are so many pubs going out of business across the UK. We can look at we have powers to do things. And quite often, I think, when you look at the news It seems like the frontline politicians are saying well it's, you know, it's not our fault and there's nothing really we can do about it and I just don't believe that's true. So there's Ruth's diagnosis Graduates are paying too much back on their student loans, and it's having an extraordinary impact on their ability to earn, save and spend At the end of twenty twenty four twenty five There was around two hundred ninety two billion pounds of outstanding student loan debt across the UK Of that, England accounts for about two hundred sixty six point six billion