Financial Education in Schools

Andy Carter Excerpts

Wednesday 6th September 2023 Westminster Hall

[Andy Carter (Warrington South) (Con)]

It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra). I extend my gratitude to my hon. Friend the Member for Broadland (Jerome Mayhew) for securing this really important debate. I am grateful to him for the opportunity to talk about financial education. I echo so much of what he said; I have scribbled some of it down and crossed out some of my notes, because I do not want to spend a lot of time repeating the points that he made so well.

I think everybody here wants to ensure that children leave school with the skills and knowledge that will equip them for their adult lives. However, I am afraid that too often it can seem that some of the most obvious life skills are not being given sufficient prominence, and in some cases are being completely overlooked, during young people’s time in schools. The most obvious is learning about basic finances. By that, I mean not just personal finances, but macrofinance—I will talk a little more about that—and the finance of business.

I am glad to add my support to the comments of the hon. Member for Feltham and Heston about Young Enterprise, which I was fortunate to be part of when I was at school. The more I look back on it, the more I think it was incredibly instructive in helping me to go on to be involved in business. I did not realise at the time the level of applied learning involved in the programme: it was hidden in an arts and crafts lesson, where we were encouraged to make candles. I may be the least creative, arts-and-crafty person hon. Members will ever meet— I managed to spill more of the wax I melted on the floor than into the moulds. Yet on the back of that, we were encouraged to come together and form a small business to sell some candles we had created at the school’s Christmas market. The programme had us forming a little company that could issue some shares and distribute the profits as and when we had managed to sell all our candles.

In the run-up to the Christmas holidays, I remember seeing rows and rows of candles. It dawned on me that we would have quite a lot of stock left over if the parents I hoped would turn up did not like the products we were creating. At that point, we were hit by the worst snow the country had faced for a decade, I think, and the lights went out. The headteacher approached the little Young Enterprise company we had set up and offered to buy every single candle we had made. That was when I learned how to negotiate with the education sector—I am happy to give the Minister some advice if he needs it at any point—and that when you have something that everybody else wants but there is a limited supply, you can control the price. We got double the amount that we had expected to make on those candles. Every classroom had one—indeed, every teacher had a candle issued as part of their Christmas holiday gift so that when the lights were out at home, they could light the candle and have a little bit of light from our Young Enterprise company. We learned a huge amount. Looking back, the school’s work on applied learning was incredibly creatively done.

I talk today to young people in schools about how business is conducted and how they can use their ideas to generate wealth, but there is a lack of understanding in too many of our schools. Too often, unfortunately, I meet constituents who have fallen into the spiral of debt and are often going to loan sharks and illegal moneylenders to try to get themselves out of very difficult situations. As my hon. Friend the Member for Broadland mentioned earlier, it is not just about the constant nagging of trying to pay off those debts, but about the impact that that has on mental health. We have a responsibility to increase financial literacy in our schools.

On Monday, before I came here, I met Angela Fishwick, the chief executive of the credit union in Warrington. She talked to me about some of the excellent work that she is doing in schools, helping at a primary level to encourage children to save. I remember signing up for my Griffin savers account with Midland bank, like the hon. Member for Feltham and Heston, and being given a bag and a clipboard. I also remember being an investor in NatWest, where I was given a piggybank to put money into. Saving money was a physical job. The more money I saved, the more piggybanks I got. I still have them at home, and my son, who is 15, looks at them and thinks, “What do you put in there?”, because we do not have money in the same way now.

As my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) mentioned, the way we transact has changed. Everything is done through digital transactions and the ability to save physical cash has gone. However, the Unify credit union is still enabling that in schools. The ability to put a pound into an account at a very early age and see it grow is incredibly important. I was pleased to hear about the work Angela Fishwick is doing in schools, delving into some of the most basic elements of financial literacy in primary schools to encourage children to save early. Talking to her reinforced to me the important role finances play in every part of our lives, whether that is paying taxes, opening a bank account, taking out a mortgage or even just budgeting for the weekly shop. It really does affect everyone.

Financial education is not just about personal financial education; it is also about macroeconomics. I try to visit a different school in my constituency every week and talk to students about the topics that they would like to cover more of in lessons. Students in the early years of secondary school in particular often talk about the importance of financial education—they do not call it financial education, but they talk about those issues.

Recently, in an English lesson, students at the high school in Appleton wrote to me as their MP about changes they wanted to see in their school. A couple of the boys wanted more goalposts, more footballs and better facilities. I took the opportunity to meet them, and we talked about the cost of all those things. They wanted me to give them the money—because I am the MP, and I have lots of money available to me—so they could buy new equipment.

We talked about the taxation system and where money comes from to fund the services in their town that they enjoy and benefit from. It was fascinating to see the level of ignorance about where public funding comes from. I remember saying to them, “The Government have no money. The only money the Government have is our money, and the only way they generate money is by taxes. When you go to work, you’re going to contribute your taxes. The more you earn, the more you’re going to contribute.” I could see their faces changing very quickly. The idea of paying into this system was not something that they were aware of.

My hon. Friend the Member for Penistone and Stocksbridge mentioned that so many young people today do not go to work before the age of 18. I started in a shop when I was 16, and I remember receiving my payslip very early on and seeing that tax had been taken out of it. At the time, tax thresholds were very low and people did not have to earn very much—in fact, I think I was on an emergency tax code from day one. A big chunk of what I earned got taken away from me, and that brought home to me very early our impact and how we contribute to society. If we want to see benefits in our community, we have to contribute to it.

It is not just about personal contributions; it is about community contributions as well. Young people do not see that in the same way, because the tax thresholds that the Conservative Government have lifted to £12,000 mean that the majority of young people who are earning today will pay absolutely no tax until they get past university education. Understanding the tax system would have been an important and practical thing for many young people, but that has changed—it has gone.

I want to conclude by asking the Minister a couple of questions. It is interesting to see the lack of understanding about financial education in schools, but I want to know what support and training is on offer to teachers, who are instrumental in helping. What partnerships is he encouraging with business and organisations such as Young Enterprise to help to skill teachers, many of whom have spent their entire working lives in the education system, do not have a background in business and cannot talk with authority about the issues that affect business? Does he agree that what we have classed as macroeconomics—the taxation system and the way we fund services—should be taught to everybody as they go through school, not just to those who study economics at A-level? I remember doing A-level economics and spending a lot of time talking about the tax system. If students do not study economics, they do not get any education in it at all. For me, it is a matter not just of financial education, but of understanding our democracy and how we all contribute to society.

I will not take up too much more time; I am keen to hear what other Members have to say. Ultimately, we could make a huge difference to young people’s lives by championing the issue, which is undoubtedly something that Members of all parties can support.