Peter Ainsworth is Managing Director of CAMROW and the author of Setting Universities Free, How to deliver a sustainable student funding system.

Kemi Badenoch is right that young people are not prospering. Too many struggle to gain a foothold in the labour market, and too many have been encouraged into university courses that do not lead to strong employment outcomes.

But her proposed student-loan reforms have the moral issue the wrong way round.

The central injustice facing this generation is not the interest rate on Plan 2 loans. It is the difficulty of getting that vital first job – with the chance to do real work, develop capability and build confidence.

Employment matters not only economically but psychologically and socially. It teaches reliability, responsibility and judgement in ways classroom learning cannot. When young people cannot get started in work, the damage is not just financial. It is fundamental and life changing.

That is the moral issue Conservatives should focus on.

The misplaced “exploitation” narrative

Badenoch, writing in The Telegraph, describes student loans as a “scam” and says government is “making money off the backs of graduates”. That framing suggests exploitation.

But the reality is more nuanced.

The student-loan system involves substantial taxpayer subsidy through debt forgiveness. Some analysts suggest close to half of lending may ultimately be written off. With around 50 per cent of young people attending university and typical borrowing near £60,000, the arithmetic implies a subsidy cost of roughly £15,000 per young person – i.e. a burden on all, including those who did not go to university.

Before describing graduates as victims, Conservatives should acknowledge that the system already asks those who did not benefit from higher education to help finance those who did. In this context, those who attended university are the relatively privileged group. Expanding the subsidies from which they benefit even further risks exacerbating rather than correcting an injustice.

Badenoch’s proposed interest rate cut would mainly benefit middle earners – those on roughly £50,000 to £70,000. This makes it even harder to justify around £2 billion of additional subsidy to this group when nearly a million young people, including many graduates, are NEET: not in employment, education or training.

Taxes fall most heavily on those priced out of work

There is also a misconception about who bears tax burdens.

Policies that raise the cost of hiring – higher employer National Insurance, elevated minimum wages and regulatory risk – fall most heavily on those priced out of employment altogether. On paper they pay no tax. In reality they bear the heaviest burden of all: exclusion from work itself.

Even “safe” degrees cannot eliminate uncertainty

In both the United States and the United Kingdom, entry-level hiring in technology roles has weakened recently. Computer science graduates in particular have reported unusually high unemployment rates relative to other disciplines. The lesson is not that STEM lacks value. It is that no field of study can guarantee outcomes in a dynamic economy.

This has important implications for policy. Farage’s Reform proposes a greater focus on STEM while Badenoch endorses college-sponsored “apprenticeships”. Both assume politicians can reliably predict which courses will deliver the best outcomes.

Experience shows they cannot.

A Conservative reform: align incentives

If Conservatives want to address low-value courses, the solution is not to change interest rates or for politicians to anticipate the labour market. It is to change who carries the risk associated with career outcomes.

The state should no longer issue student loans. The current system insulates institutions from responsibility for what they deliver. Universities should instead provide the financing, alongside regulated financial partners, so that they have a meaningful financial stake in the employment outcomes of their students.

When incentives align, behaviour changes rapidly. Courses would be designed around employability, work experience and real demand because institutional survival would depend on it.

The real priority: open the labour market

The most urgent reform for young people – graduates and non-graduates alike – is access to the first step on the employment ladder. Without it, later progression becomes far harder.

Ending state student loans would reduce government borrowing by around £10 billion a year. Those resources could be used more effectively to reduce the National Insurance burden on young employees and their employers. Many businesses are willing to take chances on inexperienced workers, to teach and mentor them. But successive increases in employment taxes and regulatory costs have made those opportunities too expensive to provide.

Cutting these employment taxes is the most reliable way to complete the education of young people – through a real job opportunity.

The unfairness facing young people today is not student-loan interest.

It is being locked out of the first rung of the ladder of a fulfilled life.

Fixing that should be the moral priority of Conservative policy.

Sir Keir Starmer’s propensity to blame anyone else but himself shows no sign of diminishing. It does not seem to occur to him that as Prime Minister one of his duties is to take responsibility.

At yesterday’s PMQs, he as usual evaded most of the questions, and instead launched irrelevant counter-attacks on Reform, the Greens and the Conservatives.

The PM remains addicted to the excuse that anything which goes wrong is the fault of the wicked Conservatives.

But various of the appointments which have gone wrong were made by Starmer himself, including those of Sue Gray, Morgan McSweeney, Chris Wormald and Peter Mandelson.

And most of the policy decisions which have later been reversed were likewise made by Starmer and his colleagues.

It would be wearisome to go through a complete list of the Government’s U-turns, but the scrapping of the Winter Fuel Allowance, followed by its reinstatement, is an egregious example.

There is a case for abolishing this allowance, and a case for keeping it, but no case for what actually occurred.

So too the insistence, at first, that the two-child benefit cap must stay, followed by the decision, under pressure from Labour MPs, to abandon it.

Who now relies on Starmer’s word? Under pressure he crumbles. This appears to be the case with the Chagos deal, though as usual it is difficult to tell what is really going on, and what weight should be attached to the use yesterday by Hamish Falconer, a junior Foreign Office minister, of the word “pausing”.

Who now would wish without ambiguity to defend any controversial Starmer appointment or policy?

In a recent cover piece for The Spectator about where it all went wrong for Starmer, Tim Shipman quotes a Labour insider who has struggled in vain to define Starmerism, and has come to realise,

“Keir has never met a policy that he had a natural view on. That’s why he’s capable of thinking that ID cards are terrible and then ID cards are wonderful and must be compulsory and then that they mustn’t be compulsory.”

Shipman recounts the story of Starmer’s speech in May 2025 warning that mass immigration would lead Britain to become an “island of strangers“.

Starmer and his aides did not realise this would be seen as an echo of Enoch Powell. Without telling his staff what he was about to do, Starmer admitted to Tom Baldwin that he was uncomfortable with “island of strangers”.

Baldwin hastened to publish the interview containing this repudiation in The Observer, cutting across a Sunday Times profile which had been in the works for weeks.

One of Starmer’s staff told Shipman about the effect this episode had on them:

“Keir basically threw everyone under the bus. That really turned things in terms of the internal dynamics. Even people who didn’t like the speech were stunned that he would wash his hands of it and hang people out to dry. It also undermined those people with civil servants, who see that the boss won’t back them up.”

All PMs make mistakes, but few have so frequently put their own staff in such a difficult position. Margaret Thatcher treated some of her Cabinet colleagues, notably towards the end Sir Geoffrey Howe, with appalling rudeness, but was known for her consideration towards her own staff.

Shipman quotes “a senior figure close to No. 10” who says:

“Fundamentally, the Prime Minister cannot make a decision, stick to a decision, implement a decision, defend that decision when it gets tough, or explain that decision, ever.”

In opposition, Starmer had a campaign team, run by McSweeney, but no policy team working out how to turn the promised “change” into a programme for government.

Thatcher, Howe, in the early years a key ally, and others in her team knew where, amid appalling difficulties, they were trying to go, and had mapped at least some of the route to get there.

Starmer has brought back senior Blairites, including Jonathan Powell and Peter Mandelson, presumably in the hope that they would supply the experience of high office he himself lacked.

But Mandelson has not merely resigned, he has been arrested, and we do not yet know what warnings of future trouble the PM received before appointing him.

Powell remains in post as National Security Adviser, but seems to have sought, on the dubious plea of necessity, to apply in the Indian Ocean the concessionary strategy which in Northern Ireland led to the Good Friday Agreement.

At yesterday’s PMQs, Kemi Badenoch asked whether the PM would cut the interest rate paid on student loans. He gave no reply, but claimed instead to be cutting energy prices, and at one point instanced, as he likes to do, the introduction of “free breakfast clubs”.

Badenoch was right to stick yesterday to student loans. By doing so, she demonstrated Starmer’s evasiveness, and the Conservative Party’s new-found determination to think about the needs of younger voters.

But one trusts that one day soon she will point out there is no such thing as a free breakfast club. These clubs have to be paid for by taxpayers.

Starmer evinces week by week his indecisiveness, his inability to think things through, and his inclination to abandon any policy which is unpopular with Labour MPs.

For Badenoch, this opens a wide field of action, as the leader who does the hard thinking, takes the hard decisions and sticks to them.

John Oxley is a consultant, writer, and broadcaster. His SubStack is Joxley Writes.

Anyone with a sub-optimal approach to home maintenance will know of the WD-40/Gaffa tape heuristic.

If something should move, but won’t, give it the spray. If it shouldn’t move, but is, tape it down. The whole concept is a bodge: it neither fully fixes the problem nor uses these products as intended. But it gets it off your “To do” list for a few months, until it eventually breaks down again.

For the government, it appears a similar approach is emerging, giving problems to the NHS. While you might assume the Health Service is focused on fixing injuries and curing illnesses, that would be naïve. Instead, various governments have expanded their remit to include aspects of ill-health, becoming catch-all social programmes. In some parts of the country, the NHS will, in certain circumstances, deep-clean your house, pay your bus fare to appointments, or even wash your clothes.

Now, ministers are looking to add to this burden by setting NHS Trusts targets around getting people back to work. Under plans announced this week, Trusts will take some of the responsibility for reducing out-of-work benefit claims. Measures will include not just treating conditions that keep people out of work but also providing external support and job coaching. As an initiative, it will place additional responsibilities on the Health Service that should really be picked up elsewhere.

Now, there is some logic here. The NHS should know who is unwell and should be able to have a proper understanding of how their disabilities impact their ability to work. It is sensible to join up elements of government that interact, rather than them becoming siloed and contradictory. Yet the scheme risks further diluting the NHS’s performance, introducing a new layer of bureaucracy, and undermining our democratic choices about how money is spent.

After all, it is hard to ignore the role that funding plays in all of this. NHS funding occupies a special place in our political consciousness. It is almost sacrosanct. Few governments would dare to impose real-term cuts in it. Even during austerity, spending on health was ringfenced, though it increased less than during previous governments. It makes it tempting to stretch the definitions of where that money can be used.

We all know that governments are fiscally constrained. Raising new money through taxation, or reallocating it to different departments, is fraught. Stretching the edges of the NHS budget is politically easier. As a result, more responsibilities that would have fallen to other departments are lumped into the NHS. As local authorities have seen their budgets consumed by social care, other service gaps have been taken on by health.

This starts to feel like a bait-and-switch for voters. People voting for greater health spending envisage it going on, well, health, not a broadening backstop for the rest of the state. It seems especially galling when frontline services are still stretched, with long waiting times and struggling A&E departments. When people say the NHS is important to them, they are thinking about addressing these issues, not using its expanding budget as a catch-all. Voters waiting for a GP appointment or operations might reasonably wonder why the service is being asked to become an employment agency.

There are also questions of accountability. These sums are relatively small in NHS terms and can easily get lost in the overall budget picture. They may not receive the same scrutiny if they were being spent by other arms of the state, with a clearer focus on the objective at hand. Should the NHS fall short in getting people back into work, it is unclear who will bear the blame. It becomes easier to shift it between the DWP, the Treasury, and now health bodies, which have expanded their remit.

This mission creep also risks undermining the competence of public services. Organisations tend to work best when their objectives are clear and stable. The health service already juggles prevention, acute care, chronic disease management and mental health support. Each of these domains is complex and resource-intensive. Loading on extra pastoral responsibilities will draw away both resources and attention. Rather than doing a few things well, the expanding health state is likely to do many things badly.

Every extra thing we ask the health service to do detracts from its core mission. It adds in extra functions, extra people, and new levels of bureaucracy. Often, this ends up duplicating what happens elsewhere in public services, or something that was cut as part of a broader strategic review. Instead of reducing silos, it just increases the number of state functions trying haphazard solutions to a problem, rather than an integrated approach.

It is the sort of thing the Conservatives should be resisting if we are serious about delivering a smaller state. Often, our attempts to reduce government spending have been hampered by a lack of honesty about what “doing less” entails. The result is a state that tries to carry out ever-growing functions, but with less funding and less effectively. Indeed, many of these additional duties for the health service were introduced during our time in government. If we genuinely want the state to be leaner, we should have better ideas about providing limited but more effective interventions.

Like with WD-40 and tape, it is easy to reach for the convenient solution. For politicians, lumping more things into the NHS is a bodge. It allows them to skirt some of the tightness in public spending and shift more things onto the part of the state allowed to expand. If continued, the NHS becomes a catch-all solution for every problem. Rather than properly deploying other bits of the public sector and working out how to have them operate effectively, we shoehorn extra things into health. To butcher a famous phrase, we cannot successfully roll back the frontiers of the state to see them reimposed through the health service.

A system that routes every difficult question through the NHS is not integrating government; it is shirking harder decisions about how the rest of it should function. If employment support is underpowered, it should be strengthened. If local authorities are overwhelmed, that should be confronted openly. Continually expanding the health service’s remit may be politically convenient, but convenience is not reform. WD-40 quietens the hinge for a while. It does not fix the door. And sooner or later, the door still needs to be repaired.

The government is right to be concerned about worklessness.

Equally, there is nothing wrong with thinking about how health impacts the economy. Making the health service the actor of last resort for every social problem, however, is a misuse of its political capital.

Services are best when they are focused – not when they are trying to do everything.