Treasury

Andrew Percy Excerpts

Tuesday 21st December 2010 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

First, I wish all a wonderful Christmas.

As my contribution has been transferred from the education category to the Treasury category, I will take full advantage of the Treasury’s love of statistics and utilise them well in my speech. As my requests are generally related to the Department for Education, with a sparkling of festive spirit it will be nice and easy to secure agreement on all my requests.

I strongly believe that we have a duty to ensure that young people are equipped to make informed financial decisions. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce), who made an excellent speech on the subject. I have been working with the Personal Financial Education Group, the Consumer Financial Education Body, and Martin Lewis of www.moneysavingexpert.com to set up an all-party parliamentary group on financial education for young people.

The purpose of the APPG will be to provide a medium through which MPs, peers and organisations with an interest in financial education can discuss the current provision on financial education in schools; ensure that young people are equipped to make informed financial decisions; help make resources and qualifications available to young people in education; support schools in the delivery of financial capability; and encourage the introduction of a requirement on schools to provide financial education.

Recent studies have shown that 94% of people think that financial education for young people is important in the current environment. Society is changing, making financial education ever more important. This year for the first time we saw that debit card use overtook the use of money. Long gone are the days when people were paid weekly in cash and were able to budget to the point where they ran out of money. We now have more direct debits, more standing orders and more contracts. Having been a councillor for 10 years before becoming an MP, I saw among the residents whom I represented that many of those unfortunate enough to lose their job would quickly be overwhelmed by the outgoings from their bank account, even when they thought that they were not spending any money.

We receive increasingly complicated marketing messages. One point that was highlighted to me was the worrying number of people who think the higher the APR, the better. Young people will never be able to get 100%-plus mortgages or to repair past financial mistakes through rising house prices and start again. In these challenging economic times, 69% of parents are concerned that their children will get into debt in the future. Less than a quarter of parents feel very confident about educating their children in how to manage money.

This was brought home to me last Friday when I and my hon. Friend the Member for South Swindon (Mr Buckland), with whom I share an office, held a training day with Citizens Advice, R3 and Nationwide building society to train us as MPs and our staff in how to deal with people who are in financial difficulty. Sixty per cent. of Citizens Advice’s work relates to debt and benefits, with the average client owing £16,970, which would take an average of 93 years to pay off at a rate that they can afford. I am sure all MPs share my concerns about the impact of debt. Interestingly, 91% of those who admitted to financial mistakes believe that financial education could have helped them avoid making those mistakes. I am sure a few MPs were included in that survey.

I believe schools have an essential role to play, and that is widely supported. Some 91% of teachers and parents agree that it is important that children learn to budget from a young age.

[Andrew Percy (Brigg and Goole) (Con)]

I pay tribute to my hon. Friend for the cracking work he is doing in establishing the APPG. Does he agree that what we need to do better in schools is not only encourage young people to take qualifications, but mainstream financial education into the curriculum? One idea from a head teacher at Goole was that we should include it on the curriculum as part of functional maths.

[Justin Tomlinson]

I thank my hon. Friend for that point. He has already put his name on the APPG list, and he will have a very important role to play in it. I hope many other MPs will put their names down too. Through working with teachers and teacher organisations, we will find the best way to engage with young children. Young people will support that too, as 97% of 11 to 17-year-olds think it is important to learn about money in school. School provision for personal financial education is still patchy, however, and 72% of parents think not enough has been done in the past to educate children about financial matters.

While there are many examples of excellent work, often led by the PFEG or banks and building societies, far too many schools have no, or extremely limited, provision. Through the APPG, we want to drive up standards and participation. Ideally, all children should have access to standard, consistent and engaging provision, but in the meantime we must do all we can to maximise participation.

My Christmas wish is for Members to join the APPG. I am sure all Members have their pens poised, so I will inform them that the group’s official launch will be on 31 January between 4.30 pm and 6.30 pm in the Jubilee Room, with Martin Lewis from MoneySavingExpert. I am aware that piles of Christmas cards will currently be covering hon. Members’ desks, but among them is an invitation—it will already have landed—so I ask them to keep an eye out for it.

As part of the group’s work, we will be looking to promote a balanced response. There are many different challenges ahead. Everybody is broadly supportive, but we must progress in a way that everybody can get behind and support. We have therefore been working with over 30 organisations, including banks and building societies, financial institutions, charitable organisations, schools and teaching organisations and, as I have said, Martin Lewis of MoneySavingExpert with, crucially, his 6.4 million subscribers, who will be encouraged to support this scheme.

At Christmas families face the greatest temptation to make the wrong financial decisions, so now would be a great time for us to make a difference. We should imagine what a difference it would make to our casework if people were able to make better and more-informed decisions.