The Daily Echo 28 February 2008

Written by Sandra Gidley MP on Thu 28th Feb 2008

On Tuesday the Children's Society admitted to concern that children were exposed to worrying amounts of commercial pressure in an increasingly materialistic world. Anyone who has been a parent will be well acquainted with pester power and peer pressure which gets worse as offspring enter the teenage years.

Even more worryingly some recent research showed that over a quarter of 17 year olds saw credit cards and overdrafts as a way of increasing their spending power.

The problems continue into adulthood and the scale of the debt problem is startling. The interest paid by each household, on its debt, increased by over £500 in the last year. People regularly come to my advice surgeries with a problem related to debt. Some are lucky and are able to access help via the CAB but this service is also under pressure. In November last year the CAB dealt with more debt enquiries than in the whole of their 96/97 accounting year.

Against this background, this week, I introduced a ten minute rule bill which was aimed at tackling this problem by a variety of means.

The first thing we need to do is to introduce proper financial literacy in schools. From 2008 pupils will be expected to learn about the financial institutions but it would be far more useful if teenagers received a thorough training in basic financial management so that they would understand the implications of any financial commitments they undertook.

The second step would be to set up a network of outlets where people could receive basic, truly independent, financial advice. An independent review has already concluded that this could be funded by the financial institutions and in the long term the investment would actually more than repay itself.

There also needs to be greater clarity about some of the financial products on offer. Research has shown that approximately three quarters of people do not even understand the financial implication of a one per cent rise in the mortgage rate and many people obtaining a store card do not fully understand the level of repayments involved. There needs to be more attention to producing information in a way that most people can understand.

Finally, there needs to be a greater sharing of debt information so that lenders can make fully informed decisions.

Sadly, there is little chance of a ten minute rule bill making it to the statute books but I have received positive feedback on the bill from MPs of all parties. Britain is the debtor of Europe but it is about time that we all worked to tackle the problem and put an end to the human misery caused by debt.

Published with kind permission of The Daily Echo