The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, I congratulate my noble friend on securing this short but very important debate, and I thank noble Lords for their contributions.
Economic and financial education are important parts of a broad and balanced curriculum and are essential knowledge for young people to manage their money well and to make sound financial decisions, particularly sound long-term decisions, as we heard from the noble Lord, Lord Davies of Brixton. As my noble friend Lady Sater rightly pointed out, they are an important contributor to our economic growth.
As noble Lords have noted, financial knowledge is compulsory in the national curriculum for mathematics at key stages 1 to 4, and in the secondary curriculum in citizenship. Mathematics provides the underlying knowledge, and putting maths in a financial context can help to bring it to life for pupils. More specific knowledge is contained in the citizenship national curriculum in secondary school, but it can also be taught in primaries.
Schools have flexibility on how they deliver the curriculum. I have heard from a number of schools, including the Danesfield School in Buckinghamshire, about programmes that they have developed to enable pupils to develop practical money management skills, such as through a school bank, through which children can earn, spend, get overdrawn and understand the impact of interest rates. What struck me particularly was that that was developed entirely for a post-cash world, with no cash being used any more.
A number of your Lordships, including my noble friends Lady Sater and Lord Sandhurst, and the noble Lord, Lord Watson of Invergowrie, referred to financial attitudes and habits being established by the age of seven. I will refer back to the original research that noble Lords were referring to, which was from the University of Cambridge in 2013.
I quote from the research:
“In summary, the evidence indicates that teaching young children explicit forms of ‘financial’ knowledge per se is likely to be ineffectual in shaping or changing their behaviours”.
It goes on to say—this is in my words, not quoting directly from the research, but I hope I have captured it accurately—that the focus should rather be on developing “habits of mind”, namely self-regulation and the capacity to defer gratification, and helping children to understand the future in concrete terms. My noble friend Lord Sandhurst touched on that. I raise it because I think it is important; schools clearly have a critical role in shaping and helping to instil these important behaviours in children, but so do parents and so do we as a society. Indeed, my noble friend Lord Sarfraz captured so eloquently the importance of attitudes, aspiration and self-belief.
The noble Lord, Lord Parekh, asked why financial education is so low-profile. I stress that without good numeracy we cannot have good financial literacy. Good numeracy is the gateway to long-term financial stability. Since 2010 we have transformed mathematics teaching in this country by introducing the mastery pedagogy, used by the top-performing east Asian countries, to secure a deep understanding of mathematics. Going forward, the advanced British standard will ensure that all students study maths to 18, further strengthening key maths skills and developing students’ confidence to deal with finances in later life.
My noble friend Lord Polak and the right reverend Prelate the Bishop of Durham both asked what we are doing to build the confidence of teachers; the right reverend Prelate also asked about collaboration. Of course, we are already collaborating with a number of organisations. In particular, the Money and Pensions Service provides guidance that signposts high-quality and quality-assured resources, including from the financial services sector, which play a key role in financial education at home and in the classroom. Training is obviously important for building teachers’ knowledge, confidence and skill. That is why the department is working with the Money and Pensions Service to deliver teacher webinars this academic year, focused on teaching about money in a cashless society. I do not know whether they will be as fun as the outline that the noble Lord, Lord Hampton, gave us, but I live in hope.
Together with my noble friend Lady Sater and other noble Lords, I recognise the really important work of charities in this area. We heard several mentions of the work of Young Enterprise, with its delivery of the quality mark, and the important work delivered by MyBnk, as well as the Lifesavers programme which, as I think the right reverend Prelate mentioned, also focuses on attitudes, which ties in with our own view. I would be delighted to meet with the founder of Blackbullion and hear more about its important work.
There is obviously the important issue of resources to build financial capability; my noble friend asked for an update on plans for the dormant assets fund. I cannot give her quite the update I would like to, but I assure her that the department continues to work closely with the Treasury and DCMS, and we will announce further details on our plans for the financial inclusion part of the dormant assets work. I will make sure that my noble friend is updated when that occurs.
I absolutely agree with your Lordships that a good financial education can also contribute to lower debt levels. Also important is an understanding of fraud and its risks, which can have such an impact on mental well-being. The Home Office recently launched new fraud education resources in collaboration with the National Crime Agency and the Association for Citizenship Teaching.
My noble friend mentioned the work of the Education Select Committee and the all-party parliamentary group. We obviously work closely with both, and I know that my right honourable friend the Minister for Schools will shortly meet the APPG chair to discuss its findings and future plans.
The noble Lord, Lord Addington, asked when the UK strategy for financial well-being would be fully integrated. Back in 2020 the Money and Pensions Service published a UK Strategy for Financial Wellbeing, which sets a national goal of 2 million more children and young people receiving a meaningful financial education by 2030. This is supported by a delivery plan for each of the UK nations.
My noble friend Lord Effingham asked about our messaging for parents. We do quite a lot in that area. The Money and Pensions Service has some digital content, Talk Learn Do, which is a financial education programme for parents and carers of children aged between three and 11, to help them talk about and understand money. There is also a plan to develop a similar programme for parents of children aged between 12 and 17; the discovery phase has been undertaken, and the Money and Pensions Service is planning next steps. There is also a Money and Pensions Service grant programme, which is testing approaches to support teacher training with a particular focus on financial education for children and young people who are vulnerable—for example, children in care and care leavers.
The noble Baroness, Lady Twycross, asked about the risks of gambling. She is absolutely right to focus on that. The department has published training modules for schools as part of the RSHE curriculum, which cover the risks of gambling and debt. Through health education, pupils are also taught how to recognise early signs of mental well-being concerns, how to self-regulate and the benefits of rationing the amount of time they spend online, which is obviously part of the wider picture.
My noble friend referred to the approaches taken by the devolved Administrations. Of course, they are tailored to smaller and much less autonomous groups of schools than we have in England. Our current focus is really on the skills, such as arithmetic, that underpin a pupil’s ability to manage budgets and money, but also character development, which is so important in terms of attitudes.
The Government believe that it is crucial for children to build knowledge that supports their financial literacy over time, and that it is also critical to build attitudes as early as possible. We believe that rooting financial education in mathematics and citizenship focuses the curriculum on the key knowledge that pupils will need to manage their finances confidently. I am not sure whether the curriculum contains all the conceptual ideas that my noble friend Lord Hannan raised, but it certainly gave us food for thought.
We are building on recent reforms, and the webinars that we are delivering with the Money and Pensions Service are the next step in that. Our understanding of financial literacy is through a combination of knowledge and behaviours. Schools, but importantly families too, have a critical part to play in that.
The noble Lord, Lord Addington, referred to Jane Austen and Dickens. I am going to go further back and quote Cicero, which might be unfashionable but I think is appropriate for this debate. He said: “Frugality includes all other virtues”.