8 March 2006
Speech by the Economic Secretary, Ivan Lewis on young adults & financial capability
Check against delivery
Opening comments
Thank you Rajiv, it’s a pleasure to be here today. And I want to thank all of you too, for those fantastic presentations. I’m really glad you worked in the pilot projects, and I think today demonstrates how much that can help us, nationally, to improve things.
My mission as a Treasury minister is to listen, to learn and to lead. So I want to say a few words about financial capability, and the impact that can have on our joint efforts to tackle financial exclusion.
Financial capability
If we boil it down, financial capability is about providing consumers with the education, the information and the basic advice they need to make financial decisions with confidence.
Clearly, it is in all of our interests to help develop better informed, better educated and more confident citizens – to enable people to take greater responsibility for their financial affairs and play a more active role in the market for financial services.
So I want to take this opportunity to welcome the work of the FSA in managing the Strategy. These proposals are moving in the right direction, overall. But our task now is to focus more closely on the delivery side, which is why we have asked the FSA to report annually on progress, as of this year.
Have no doubt – we do recognise the need of individuals to learn financial capability at an early age, and we will be putting this more explicitly within the curriculum – for example, including it in the new functional component of GCSE Maths.
Financial inclusion
Better financial capability is essential to increasing financial and social inclusion too.
Confidence and skills with money can improve life prospects. As can opening up access to appropriate bank accounts, affordable credit and money advice for those who need it.
Not only that, but for many students from disadvantaged families, money problems and fear of debt are up there as key reasons why they are more likely to drop out of university.
Which is why we have broadly worked to strengthen innovation. To open up skills to all. To ensure fairness through a flexible and responsive welfare state. In other words, to lock-in the basics of a fairer society.
Improving financial inclusion fits within that. And I think it’s fair to say we’ve made good progress on inclusion already. This started with the 1999 Policy Action Team Report, which made some tough recommendations on basic banking, on credit unions and on insurance with rent. We’ve acted on many of those.
And we’ll continue to deal with the social scar of exclusion. With 2.8 million adults in households without access to a bank account of any kind in 2003 – and over two thirds in the lowest three income deciles, that is unacceptable for Britain.
It is unacceptable for this government. Households that operate solely on a cash budget are more vulnerable to both loss and theft, and far more likely to use the alternative credit market with the additional costs that brings.
So we will continue to prioritise support and help for these people.
Closing remarks
But before I hand over to Trevor, let me end on this. We have come an awfully long way over the last decade. Considerations of social justice – once the exception to government thinking – are now at the heart of our actions.
You have all been a part of that shift, and have contributed time, expertise, knowledge and the considerable resources of those assembled here today.
So let me thank you. Let me welcome the very real contribution of the Young Adults Working Group. Let me thank you for those excellent presentations.
And let me encourage everyone here – especially from the Higher Education sector and those of you working with NEET groups – let me encourage you to continue working with us, and to build on a true partnership.
This is something that we can make such a huge difference to, if only we rise up and accept that responsibility.
Thank you.
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