Skip to main content

Financial Inclusion

Volume 461: debated on Thursday 14 June 2007

8. What discussions he has had on using pre-school learning establishments in providing information on financial inclusion. (142569)

As my hon. Friend is aware from my recent visit to his constituency, the financial inclusion fund is providing money advice in outreach locations, including Sure Start and other family and children’s centres, as well as in many credit unions around the country. Early evidence shows that outreach provision has been effective in bringing information on money matters and financial services to financially excluded consumers, particularly women.

The evidence from my constituency is that families previously torn apart by unemployment and drug addiction are increasingly strengthened and empowered by the Government’s financial inclusion policies, not least tax credits. As those policies and the children’s centres—which families can now use to raise aspirations—are undoubtedly the Government’s two greatest achievements, should not we bring the two together, not only to allow families increasingly to benefit, but to expose the fact that the Conservative party would remove both of them?

I completely agree with my hon. Friend. All around the country, Sure Start children’s centres are doing a great job in providing financial advice to lower-income consumers. Only a few weeks ago, in Ilkeston, I saw a credit union in a Sure Start centre that provided both debt advice and a much better way of saving for low-income families than the rip-off, Farepak-type savings schemes that we heard about last year. I agree with my hon. Friend that we should do everything that we can to defend Sure Start in our communities and to resist any attempt to cut back its budgets, which I fear would be the inevitable consequence of the third fiscal rule, which those on the Tory Front Bench continue to promote in order to pay for the tax cuts that they promised.

While the Economic Secretary is looking for outreach locations from which to promote financial inclusion, will he revise his opinion of the role of post offices in that matter? In his recent report, he described the Post Office card account as a barrier to financial inclusion, whereas it should be seen as a gateway to it. Will he work to ensure that the new contract for the Post Office card account goes to post offices, so that people in rural areas, especially, can continue to benefit from the financial inclusion that those vital public services offer?

The hon. Gentleman should know that we intend to spend £1.7 billion over the coming years to preserve the post office network and to ensure that thousands of post offices around the country continue to provide the services to which he referred. However, while we will continue with the Post Office card account after 2010, it is not a properly functioning account and does not provide the services that should be available to the lowest-income consumers. I would much rather people move on to either basic bank accounts or proper credit union accounts. However, we need to preserve the network to ensure that we can support the people in his constituency and in constituencies around the country who need to access reliable and local services.

The biggest barrier to financial inclusion is the very low level of understanding of basic financial services, yet there is very little in the way of teaching in our school system to increase that. What steps has my hon. Friend taken to discuss that matter with the Department for Education and Skills, and when can we look forward to having more pilots on developing such teaching in schools?

My hon. Friend is right that we need to ensure that we strengthen the way in which our schools curriculum can support financial education. In our report in January, we set out the steps that we will take, and I met ministerial colleagues in the DFES to take that forward. A particular opportunity for financial education will come from the child trust fund. In two years’ time, when every seven-year-old in our country gets an extra top-up into their child trust fund account of £250, or £500 for those from lower-income families, we will ensure that we take the opportunity to embed the proper teaching of financial education and financial literacy into our system, using the child trust fund as a real way to communicate that message to both young people and their parents.