Personal Finance: Blair Silent over the Need for Financial Education

By Kay, William | The Independent (London, England), October 18, 2003 | Go to article overview
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Personal Finance: Blair Silent over the Need for Financial Education


Kay, William, The Independent (London, England)


While it is heartening to see John Tiner, the Financial Service Authority's chief executive, making further strides in improving financial literacy, the silence on the subject from one particular corner is a disgrace.

Although Tony Blair was originally given the keys to 10 Downing Street on the basis of a call for "education, education, education", he has remained largely silent on the urgent need for action on financial education.

The ludicrous amount of time the Treasury has spent on the Sandler report on stakeholder products could have been better devoted to devising courses to bring children and adults up to speed on personal finance.

Then they would have the knowledge as well as the confidence to make accurate judgements about saving, investing and borrowing and we wouldn't be facing the contortions necessary to evolve allegedly foolproof products supposed to be sold on no more than a 1 per cent charge to ensure no one is ripped off. This is putting the cart before the horse with a vengeance.

Charles Clarke, the Education Secretary, is a powerful man who has the ear and sympathy of Mr Blair. He is among the few Cabinet ministers who can squeeze more money out of Gordon Brown, the Chancellor.

And, as Alan Hughes at First Direct has astutely pointed out, financial education will actually benefit the financial services industry, stimulating demand for the right products and consigning to the dustbin such fripperies as ridiculously complicated, protected savings schemes born of a naive desire for a risk-free ride on the stock market.

But this isn't just about money. The educational establishment has long mistrusted money and all it stands for. That resistance is breaking down, but there is a massive task to train teachers to teach personal finance.

Imaginatively taught, money fascinates children because of the power and goodies it brings. Talk to them about probability theory and they glaze over: tell them about horse-race odds and you have a rapt audience. Oh, but I forgot. Betting is another work of the Devil, not to be spoken about in the 21st century.

It's official: mortgages make you sick and they're about to make you sicker. Sainsbury's Bank claimed this week that mortgages have made 6.34 million people ill. This includes 4.

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