Financial Guidance and Claims Bill [HL]

Debate between Earl of Listowel and Viscount Brookeborough

3rd reading (Minutes of Proceedings): House of Lords
Tuesday 21st November 2017 Lords Chamber

[Viscount Brookeborough (CB)]

My Lords, I add my praise to the two Front Benches. I should not think they could sustain much more joint praise, but on this occasion they have moved mountains in the length of time that this has taken. I emphasise how important the respite is from the point of view that every single case is a personal case of one family. It is not a matter of statistics, of speaking only of “30% of the families”; every single case that is allowed to go through this debt is a tragedy.

I say on behalf of Northern Ireland, if not the devolved parts of the UK, that it is good to see that it may be extended there, especially, from my point of view, to Northern Ireland. There are many individuals who, although they may not be listening to this, will unknowingly benefit from this to a tremendous extent. I thank all parties involved.

[The Earl of Listowel (CB)]

My Lords, I add my thanks to the Minister for her hard work and ingenuity in securing this amendment today. It has certainly moved a long way since our first discussion in Committee. She may remember that at the time I raised the issue of a particular care leaver who had a very stressful experience over two years because of the difficulties that we are addressing now. I am really grateful to her, particularly for care leavers who, after all, begin with a difficult start in their families, often have to experience independence very early in life and too often find themselves in financial difficulties. This will be particularly helpful for them. I appreciate the clarity that the Minister gave on the urgency with which the Government are moving forward on this, which was reassuring.

There is one point on which I would like clarification, and the Minister may care to write to me on this. Many care leavers are in difficulty around council tax. Some enlightened local authorities are now deciding not to charge care leavers but many still do so. When care leavers are pursued by their local authority for council tax, they can get into the position of the corporate parent aggressively pursuing their corporate child through the courts. I hope the dispensation will address that particular point.

One further point that the Minister may care to cover in correspondence: I believe that in Scotland the experience has been that six weeks may not be enough of a respite period to build a robust plan to go forward. I hope she might look at what is going on in Scotland and that we may build on that learning, perhaps looking at increasing the length of the respite period in light of the experience there.

I thank the Minister and all those noble Lords, particularly the noble Lord, Lord Stevenson of Balmacara, who took this forward, as well as the charity StepChange, which has been so helpful in all these matters.

Financial Guidance and Claims Bill [HL]

Debate between Earl of Listowel and Viscount Brookeborough

Committee: 1st sitting (Hansard - continued): House of Lords
Wednesday 19th July 2017 Lords Chamber

[The Earl of Listowel]

My Lords, this group of amendments begins our discussion on the very important matter of financial education. Clause 2(7) reads:

“The strategic function is to support and co-ordinate the development of a national strategy to improve … the provision of financial education to children and young people”.


My amendment would add “care leavers” to that group.

I apologise to the Minister, to officials and to noble Lords for having tabled this amendment late. Sometimes I take a little too much on, and I apologise in particular to the officials. I appreciate that the Minister’s reply may have to be short and, if she wishes to write to me, I shall quite understand.

The main gist of my concern is to ensure that young people in care get the financial education they need. The Minister has just highlighted how important it is to get in early before the troubles arise, and I shall expand on that briefly.

I welcome the Children and Social Work Act, which was brought forward in the previous Session and clarified the duties of local authorities to both young people in care and care leavers. Peripheral to that, there is an ongoing review of personal advisers, looking at how well advised care leavers are on matters such as housing, employment, education and training. This is an opportunity to get reassurance that thinking about financial education will be fully integrated in that ongoing process.

Learning to manage finances is often a part of normal growing up. However, research by the Children’s Society in 2016 found that almost half of local authorities do not provide financial education for children leaving their care. It is well documented that care leavers are particularly at risk of falling into financial difficulty and in the absence of a strong support network, the move to independence and the associated shocks and stresses can mean that the risk of debt can be very high. On average, children leave home at the age of 24 in this country, so care leavers have both the disadvantage of early trauma and are leaving and becoming independent much earlier than most of our children.

I urge the Minister to ensure that guidance to support the development of local authorities and others regarding care leavers in their area should include the commitment to provide high-quality financial education prior to young people leaving care.

Will the Minister join with me in welcoming the encouraging news that almost 30 local authorities—I believe it is 27—across England have taken the decision to exempt care leavers from council tax? That can be a particularly large bill and difficult debt for these young people up until the age of 25. Many local authorities which have a duty to care for these young people when they find themselves in difficult situations, are vigorously pursuing them to pay their council tax debt. That cannot be right and it is good that so many local authorities recognise it and I hope that many more will, too. I hope the Minister will encourage them in their efforts tonight.

I look forward to the Minister’s reply. I beg to move.

[Viscount Brookeborough (CB)]

My Lords, I welcome these amendments because they attract attention to the subject of education, which, in our report on financial exclusion, was a major part. The top of Clause 2(7) states:

“The strategic function is to support and co-ordinate the development”.


It does not appear to have a lot of force behind it. Anything that we can do for care leavers, or anyone else, is most welcome, but one has to go back a stage and ask about the perfectly normal schooling that goes on: is the education actually occurring and, no matter what we write here, will it happen?

We wrote in our report:

“When considering provision in English secondary schools it is also important to note that the national curriculum”—


to which financial education was added in 2014—

“applies only to maintained schools (those run by local authorities) and not to academies, free schools and the independent sector”.

That has resulted in there being still no requirement for English primary schools to include financial education as part of their teaching. In addition, as only 35% of state-funded secondary schools are now maintained schools, the obligation to teach financial education does not apply at all to nearly two-thirds of all secondary schools. Therefore, there was a big hole in this from the start. No matter what we say in these clauses to attract attention to all parts of schooling, the basic financial education is not taking place, as the noble Earl said.

From the point of view of our report, the one thing I could never understand is that we are talking about financial education throughout people’s lives, and the only time we have the total population—in this case of England—within our control and have their attention is at school. If we do not have compulsory financial education of some kind in school, when things go wrong later we do not know where we are trying to pick them up from.

When we raised this subject, the question of teacher time arose. We also heard the comment that teachers were not qualified to teach financial education. However, at the moment we have no financial education and anybody must be qualified to teach children—we all had money boxes—to save a bit, to add it up, to save it for the weekend, even if it is done with sweets or whatever. They complicate this by saying, “How can teachers be capable of teaching children about pensions and so on?”. We are not getting to the point of teaching them about things like that in the first place, and surely there must be a simple level playing field by the time everybody leaves school, or they are permitted to leave at the earliest age of 15. By that time all young people should have been given a very basic financial education: how to save money, where to put it, what a bank is for and so on. I do not believe that not being able to teach them about investing in the stock market or pensions is the crucial point.

As I understand it, a comment made in the Youth Parliament, made up of young people who have left school and are ready to go to university, showed that one of their highest priorities was that they had not been given any financial education. These are life skills. All education, whether it is in physics, chemistry or geography, is part of a young person’s education and is for a job, but financial education is a basic skill and the lack of it is the cause of so many social problems in our country. Why can we not ensure a level of financial skill when young people leave school so that anybody picking them up later on knows that they have only to go back so far? Instead, we have some young people with a little knowledge and many with none. So I totally support these amendments for drawing attention to the issue, but I am afraid that we have to go back one stage further. We have to do something about this because once young people have left school, we no longer have the audience and we wait for them to appear in debt, homeless and everything else. For those reasons, I certainly support the amendment.