Young People: Personal Finances

Lord Nash Excerpts

Thursday 7th February 2013 Lords Chamber

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what action they are taking to ensure that young people have a proper understanding of managing personal finances before leaving school.

[The Parliamentary Under-Secretary of State for Schools (Lord Nash)]

My Lords, I agree entirely with the sentiment underlying the noble Lord’s Question. The ability to manage one’s finances is a very important skill that all young people should have. The Question is also brilliantly timed as my right honourable friend the Secretary of State for Education is currently on his feet in another place, outlining the draft programmes of study for the national curriculum, among other things. The new national curriculum will place a renewed emphasis on mathematics, which itself will include a strong focus on arithmetic, money and percentages. In addition, citizenship will include a strong and specific emphasis on financial education.

[Lord Kennedy of Southwark]

I thank the Minister for his reply. Leaving school with the skills, knowledge and confidence to manage money is vital—we agree about that. If those skills are not learnt in school they will probably never be learnt. I found out that the average age when a child makes their first purchase online is 10. What cross-departmental work is going on to ensure that those essential skills are learnt, and would he agree to meet me and some campaigners on the issue to discuss this in more depth and explore what can be done further?

[Lord Nash]

Specifically on online matters, child safeguarding and internet safety are both areas that the Government take very seriously. Schools will provide a grounding in that, but I will agree to meet the noble Lord and discuss this further.

[Lord Flight]

My Lords, I am grateful to the noble Lord, Lord Kennedy, for raising this matter and for the Minister’s reply. This is territory on which I have sought to campaign. Within the two territories to which he referred—mathematics and citizenship—will the territory of understanding concepts be covered? One of the key problems is that unless people have actually had it explained to them, they do not know what a pension or a mortgage is. It is not just about mathematics.

[Lord Nash]

The noble Lord is absolutely right. The draft programme for study states that pupils will be equipped with the financial skills to enable them to manage their money on a day-to-day basis as well as to plan for future financial needs, and that they understand the concept of wages, taxes, credit, debt, financial risk and a range of more sophisticated financial products. I should hope that any proper education on that front would cover those points.

[Lord Laming]

Will the Minister assure the House that in his new ministerial responsibilities he will give particular attention to young people who have been in the care of the state? Does he agree that we expect the greatest coping skills from the young people who have had the fewest opportunities in life and do not have families to support them after they leave school?

[Lord Nash]

I note the noble Lord’s comments. We have met with a wide range of SEN groups in formulating our plans. Appropriate adjustments will be made to exams for pupils in that category.

[Lord Tomlinson]

Does the Minister agree with me that, on the basis of the Question from the noble Lord, Lord Kennedy, and with the emphasis that he has placed on the continuing development of these financial skills, one day a young person who might aspire to become Prime Minister might know the difference between debt and deficit?

[Lord Nash]

I would like to think that day has arrived but I note the noble Lord’s comments.

[Lord Addington]

My Lords, does my noble friend agree that whenever it comes to an issue that needs to go into the national curriculum we always have our own hobby horse, and then another great cohort of us tells us that the curriculum is too crowded? Will my noble friend make sure, if we are going to take this on, that it is integrated into maths lessons?

[Lord Nash]

It will be covered in terms of some financial fluency in maths lessons but I think it is going to be more integrated into citizenship.

[Lord Geddes]

My Lords—

--- Later in debate ---

[Lord Davies of Oldham]

The Liberals are part of the coalition. I agree with the noble Lord, Lord Flight. This is not just a question of mathematics but of knowledge. It is quite clear that a very high percentage of adults who invest their hard-earned money in all sorts of organisations have no idea of the costs that have been taken from them by the people controlling the fund. The evidence is clear that a very large percentage of our population are quite ignorant of such costs. That is why we need financial education.

[Lord Nash]

I agree entirely with the noble Lord and that is why we are enacting these proposals.

[Lord Geddes]

Does my noble friend agree that this is vitally important for those embarking for the first time on tertiary education—particularly the requirement to budget their expenses?

[Lord Nash]

I agree entirely with my noble friend. Schools should provide these pupils in particular with all the information that they need, including budgeting, student loans, bursaries and any other products available.

[Lord Phillips of Sudbury]

My Lords, I declare an interest as president of the Citizenship Foundation. With his very welcome news when he first answered this Question, does it mean that citizenship is now going to remain part of the core curriculum?

[Lord Nash]

There will be a Statement on this later. It remains part of the core curriculum but it is not a mandatory GCSE.

[Lord Elton]

Following the question of the noble Lord, Lord Tomlinson, does my noble friend agree that if eventually all the electorate were to realise that you cannot throughout your life spend more than you get, they would be more accepting of Budgets that would reduce the deficit and get this country back to where it should be?

[Lord Nash]

I agree entirely with my noble friend.