Financial Guidance and Claims Bill [HL]

Lord Young of Cookham Excerpts

Tuesday 24th October 2017 Lords Chamber

[Baroness Altmann (Con)]

My Lords, I echo the wise words of the noble Viscount. It is absolutely clear that the level of financial education across the country is woefully low, and that stems from the absence of any financial education at the schooling stage. When I was looking at introducing some pension issues into the national curriculum, the main message that I received as to why it could not happen was that teachers themselves did not know enough about those issues to be able to teach even primary or secondary schoolchildren.

There is clearly a role for the single financial guidance body, which is set up to provide information and education for the public, to devise modules that schools could use—but not only schools. I would hope that, given that most people in the workplace did not get financial education in school, such modules would also be useful within the workplace. This is a big gap in our education system. Education needs to provide our students and young people with the tools that they need to manage their lives. If they cannot manage their finances, they will often get into difficulties that they do not need to be in.

I certainly echo the sentiments of the amendment, which would require the single financial guidance body, as the obvious body to do this, to provide education materials that could be used within schools, but even importing that into the workplace alongside auto-enrolment, because all workers will automatically be put into pensions and need to have some understanding of how finance works in order to make the best of that. I support the sentiments expressed.

[Lord Young of Cookham (Con)]

My Lords, I was hoping for a moment that the noble Lord, Lord McKenzie, was going to wind up the debate and give some cogent reasons why his amendment should be resisted, but that falls to me.

Amendment 13, tabled by the noble Lord, Lord McKenzie, would alter the strategic function on matters relating to financial education. I am grateful to the noble Viscount, Lord Brookeborough, the noble Baroness, Lady Kramer, and my noble friend Lady Altmann for their contributions because, once again, we have highlighted the important issue of financial education, which has been one of the themes running through our debate today. We had a good debate on it in Committee, and there is no disagreement that financial education is extremely important at all stages of life.

In fact, a key role of the new body as a whole will be to improve people’s financial capability and help them to make better financial decisions. Clause 2(7) states:

“The strategic function is to support and co-ordinate the development of a national strategy to improve … the financial capability of members of public”.


Then there is the paragraph quoted by the noble Viscount, Lord Brookeborough:

“the provision of financial education to children and young people”.

The noble Viscount outlined areas where the public need to be better informed, and I agree with all that he said.

The financial education element of the strategic function is targeting a specific area of need, which is to ensure that children and young people are supported at an early age on how to manage their finances—for example, by learning the benefits of budgeting and saving. As I think I said in response to an earlier debate, the new body will have a co-ordinating role to match funders with providers of financial education projects and initiatives aimed at children—those could well be in schools—and will ensure that they are targeted where evidence has shown them to be more effective. This falls four-square within the wider strategic financial capability work of the body, and should form part of the national strategy that we expect the body to deliver.

As has been mentioned, the Money Advice Service has been undertaking that role, and it is one aspect that respondents to the government consultation overwhelmingly agreed is important for the new body to continue to work on, build on, and continue the initiatives already under way.

The amendment makes provision for the new body to advise the Secretary of State on the role of Ofsted and the primary school curriculum. As the noble Viscount, Lord Brookeborough, said, the Select Committee on Financial Exclusion made similar recommendations on the role of Ofsted and the primary school curriculum in its recent report. We will publish a direct response to the House of Lords ad hoc Select Committee report before Third Reading. The Department for Education, which has prime responsibility for this, will be a major contributor to that section of the response.

Again, as I said in Committee, the Government believe that the remit of the new body may cause confusion with regards to the school curriculum. Of course, it can work with schools to help children understand financial education and it can help fund lessons and explore further the barriers to school involvement. The Government are clear, however, that the school curriculum and monitoring of school performance are matters for the departments for education in England and in the devolved nations. Nevertheless, Clause 2(3) states:

“The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions”.


It seems to me that there is nothing to stop the SFGB informally making suggestions to Ministers without the need for the amendment, as long as they relate to its functions. So I do not think that we need the amendment for there to be a dialogue between the SFGB and education providers. In practice, the body will be able to undertake activities to help schools provide financial education but we do not believe the amendment is an appropriate addition to the strategic function. For that reason, I urge the noble Lord to withdraw the amendment.

[Viscount Brookeborough]

May I intervene for one second? I thank the Minister for his response. At one stage he said: “Well, we might get help, and it might be in schools. Maybe the education board will look at this and maybe the guidance authority will include this and this”. The whole thing is so wishy-washy. There are so many let-out clauses, I am simply not sure that it will happen.

[Lord Young of Cookham]

That is a fair point, but I ask my noble friend to give the Government the benefit of the doubt until such time as we publish the response to the specific recommendations he has referred to. If he finds that the response is inadequate and does not meet his expectations, I am sure there will be further opportunities for him to raise it. The point has been well made during this debate that further progress should be made. There is an outstanding recommendation to which the Government are about to respond. I suggest that the amendment is withdrawn and the Government given an opportunity to put their case forward when they respond to the Select Committee.