Financial Education

Nick de Bois Excerpts

Thursday 15th December 2011 Commons Chamber

[Andrew Percy]

I understand that that would not be applied retrospectively—and a very sound recommendation it is on those terms. I shall come on to that in a moment, because I taught in a primary school the year before I was elected, and I had to teach maths. That experience has led me to the conclusion that we should absolutely ensure that primary school teachers have better maths qualifications. Although I did not do them a disservice, the children I taught would have benefited from being taught by somebody who had not struggled with maths as I did. I managed to scrape a GCSE C grade. That is why we have supported the minimum grade of B for primary school teachers.

My hon. Friend the Member for North Swindon outlined most of our recommendations and stole quite a lot of my speech in the process. He also talked about the inquiry process and stole my three bullet points on that too. I have been left with something to say, however. It is important to remind ourselves why this subject is so important. A lot of the research that we looked at in preparing the report was quite frightening. The situation out there is even worse than I expected. Research by EdComs in June 2009 found that by the time children reach the age of 17, more than half of them are or have already been in debt. A YouGov survey in 2008 found that 70% of 18 to 24-year-olds were already in debt. As we have heard, with tuition fees and the way life is today, that figure will not go down any time soon.

A survey by M&S Money found that some 14 to 18-year-olds are given no help with basic money matters by their parents. Indeed, 19% of parents have never discussed with teenagers how to spend money, and 32% have yet to discuss how to budget or even describe what a budget is. Most telling of all is the report compiled in March this year by Credit Action which found that a lack of financial education has cost Brits nearly £250 million in bank charges and penalties alone. I know that we are all grateful to Martin Lewis for helping us to get our money back in those matters.

The lack of financial education is a growing problem. We seem to be sending young people out into the world, which is increasingly financially complex, without providing them with the skills they need. I support the Government’s drive to reduce burdens on schools, to slim down the curriculum and to mandate less to schools, but in that process we must never allow ourselves to scale down to the extent that we remove the basic capabilities that we expect our young people to have when they leave school. Our view is that the financial education component should be a key measure.

I listened to the shadow Minister’s comments about PSHE. We gave some consideration to that. One of the big fights in our inquiry, not only between panel members but between those who gave evidence to us, was about whether financial education should just sit in PSHE. As a former practitioner who was expected to deliver PSHE, I felt strongly that it was not suitable, not least because it is not examined. As the hon. Gentleman, as a former teacher, will know, and indeed as head teachers told us during the inquiry, if a subject is not examined, schools do not necessarily accord it the importance they should.

For three years, I taught in a very difficult school in Hull, in one of the most deprived catchments in the country. I had to deliver PSHE, but we had so many other pressures on us to raise standards, such as working with grade C-D borderline kids so that in the next year’s league tables we would do a little better and would not be picked out by the local media as the worst-performing school. In better-performing—dare I say it?—more middle-class schools, teachers may be able to indulge themselves a little more in developing the PSHE curriculum because they do not have quite the same pressures on them. However, I am afraid that in a lot of schools, despite the professionalism of teachers, the subject often takes a back seat. When the Arun Youth Council and My Money Young Advisers came to give evidence, I asked one young person, “What do you think of PSHE?” His response was, “Well, it’s a bit of a doss.” Sadly, that is the situation in a lot of schools. Some fantastic work is being done across the country in PSHE, and we were provided with evidence of that and told about it by other young people. Although PSHE is important and must be part of the solution, we concluded that financial education had to be examined so that schools place the necessary emphasis on it.

We made it clear that there should be a financial education element within maths that can be clearly defined and packaged to young people. It is not simply a case of putting in a few questions that look like they are about financial education, as the shadow Minister said. It is about packaging a lot of the education and skills that are already there and saying clearly to young people, “This is financial education, and this is why we are doing it.” We can also help to improve the importance placed on PSHE, which is already taught in schools, because it will be used to support the drive for standards in mathematics. I think that that provides a real opportunity to raise the profile and importance of PSHE across the country.

I will give a couple of examples from our report to demonstrate this. As my hon. Friend the Member for North Swindon said, we did not want to come up with a wishy-washy report that said it would be easy to have financial education, knock on the Minister’s door and have him say, “Thank you very much. It looks lovely, but I am afraid that it’s not going to happen.” Therefore, we have tried to work in the direction of Government policy and to provide practical solutions.

Members who have looked at the report will have seen that on page 38 we demonstrate clearly where in the maths curriculum the financial education elements can fit nicely—we are grateful for the help we had from mathematicians. Those have been split into three headings: money and transactions; risk and reward; and financial landscape. The money and transactions elements includes being able to do compound interest calculations with a calculator or spreadsheet, to set up a spreadsheet to do calculations involving percentages and to use foreign exchange rate information to make calculations. For financial landscape, the competencies include the ability to do reverse percentage calculations and to work out an inflation rate for a given time period, which is very important and something we hear a lot about. That involves real maths skills, not wishy-washy stuff at all.

That can be supported over in the PSHE curriculum by talking to young people about the products that they might have to make choices about. For example, we can talk to them about managing money, budgeting, the subjective issues of risk and reward and what is right for them in particular situations. That is not something we felt could fit easily into one or other area, which is why the solution we have come up with is deliverable within the current curriculum without putting extra pressures on schools.

One of the recommendations that has been referred to is that of having a co-ordinator on this in schools, and that should be someone from the senior leadership team within the school. That is important, because one of the big drivers when I first started teaching in the early 2000s was the drive towards more cross-curricular working, and it happened for a bit and then we lost focus on it. Having someone at a sufficiently senior level within the school to drive that cross-curricular agenda and link the two subjects is important, and the educational professionals who came to speak to us were very supportive of that approach.

[Nick de Bois (Enfield North) (Con)]

My hon. Friend raises an important point about the leadership coming from within schools, but does he agree that there might also be a role for the private sector and financial institutions to lend their support to make pragmatic advice available?

[Andrew Percy]

My hon. Friend must have been reading my notes over my shoulder, because that is exactly the point I was about to move on to. I will be brief, because I know that other Members wish to speak. We took a lot of evidence from financial institutions and banks, and one of the challenges we set out for them in the report relates to training. It would be pointless if I went in to deliver financial education to any of my pupils, because I am not financially competent, so there is an issue of training. But we have identified that role as one that financial institutions could work on more closely. They do a lot already, and anybody who knows Barclays will have seen its money skills programme. I visited Barclays in my constituency recently, and through the fantastic Sobriety Project it was doing some excellent work with Goole high school students who are at risk of exclusion and with vulnerable young people in the town.

Nationwide has a programme, and so does Capital One. I do not want to risk missing out any institutions, but many are already engaged in financial education, so we have set them the challenge of coming together, getting their resources kitemarked and perhaps being co-ordinated by a charity. Financial institutions have a real role to play in supporting such education in the curriculum, and in helping to develop the training to which my hon. Friend refers.

I am aware that many other Members wish to speak, but I shall just mention a couple of other organisations that support our proposal, as they should be read into the record if nothing else. First, and most importantly, there is one in my constituency. After the report came out, I was inundated with e-mails from various organisations, one of which I received from one of the two credit unions in my constituency, Hull and East Yorkshire Credit Union, to which I think the shadow Minister referred. It informs me that it would very much like to support our campaign on financial education, because it is very much in line with the ethics and objects of its movement.

Nationwide contacted us to say that

“the report looks very comprehensive and is something Nationwide very much welcomes.”

The Money Advice Service issued a statement to

“welcome the APPG on Financial Education & Young People’s report on Financial Education and the Curriculum.”

We were congratulated by the Scout Association, which also has an interest in the area, and the Institute of Chartered Accountants in England and Wales

“call on MPs to back the introduction of mandatory financial education during Thursday’s debate.”

So there is a lot of support from a range of institutions and organisations.

Finally, I emphasise again that our proposal is not about watering down the curriculum, nor is it a wishy-washy thing with which to moralise about debt. It is about real maths skills; about using real-life experiences such as phone contracts, student tuition fees, mortgages or whatever to support the drive for standards, about which we are all passionate and we know the Minister is absolutely passionate; and it is about ensuring that young people enter this complex financial world with the skills to make better decisions than I, and many other people who have gone before them, have made.