William Kay: Suddenly, ministers see the wisdom of financial lessons in our schools

All of a sudden, the financial education supporters' club is becoming crowded.

All of a sudden, the financial education supporters' club is becoming crowded. Only last week I reported on the Chancellor, Gordon Brown's, conversion to the cause with the formation of a Financial Inclusion Taskforce. This week Gerry Sutcliffe, the Consumer Minister, and Chris Pond, his counterpart at Work and Pensions, espoused a national strategy for improving financial literacy as a means of combating over-indebtedness.

The following day the Financial Secretary to the Treasury, Ruth Kelly, was backing a Citizens Advice publication launch with a ringing endorsement of financial capability teaching. She mentioned her membership of the Financial Service Authority's (FSA's) Financial Capability Steering Group, which is charged with, er, establishing a national strategy. And next week we can look forward to the all-party Treasury Select Committee of MPs publishing its views on long-term saving. It's a fair bet that education will feature on their agenda, too.

I could not be more delighted to see all this activity, as it is nearly a year since The Independent started its campaign for the creation of a Personal Finance GCSE.

It has taken Whitehall's policy wonks a little while to wake up to the idea that teaching people about money is far more effective than trying to design foolproof financial products, but better late than never. And all credit to the Treasury for making financial education one of the FSA's legal obligations. That was taken up enthusiastically by the previous head of the FSA, Sir Howard Davies, and has been continued even more forcefully by the present chief executive, John Tiner.

The near-silent party in all this is the Department for Education and Science (DfES), which you would think would be on the front seat of a financial education bandwagon, whipping the horses into a gallop.

In January the Education Secretary, Charles Clarke, ducked out of a City conference on the subject and sent his parliamentary under-secretary, Stephen Twigg. In a brief speech Mr Twigg admitted that there was "a real hunger" for financial education, but felt it was best buried away in maths and citizenship courses.

When I asked Ms Kelly what part the DfES is playing, she loyally replied that it was actively involved in discussions with the FSA and others. But the hard fact is that resources are going to have to be diverted, to find more time in the curriculum, to train teachers in personal finance, to develop courses which will stimulate and challenge children.

I acknowledge that adult education in this area is as vital as in schools. Teresa Perchard, Citizens Advice's policy director, made it clear this week after Ms Kelly sat down that there is much to do to familiarise the poor, the unemployed and the over-borrowed with the nuts and bolts of dealing with money and Citizens Advice is leading the way.

But while Mr Clarke is apparently dragging his feet the groundwork is not going to be laid for the next generation of savers and borrowers to take full advantage of the opportunities available to them, and at the same time have the nous to tell the financial cowboys where to go.

I appreciate that some teachers are apprehensive about presenting a subject they are not used to dealing with. I suspect a few still think that financial education is pandering to nasty capitalists. Either way, direction has to come from the top.

Watch for problems among your souvenirs

* Enjoy your credit-card spending abroad while you can this summer, because you may find that when you go on holiday next year your card issuer may not be liable for defective goods or shoddy service obtained on foreign shores.

This week a High Court case began in which the Office of Fair Trading is seeking clarification of the 1974 Consumer Credit Act as it affects foreign transactions.

When you pay for something worth between £100 and £30,000 with a credit card in Britain, the Act ensures that the card issuer is jointly liable with the supplier if there is a problem. That is a valuable fall-back, should the supplier argue the toss.

Foreign spending is a grey area, however - strange, because people were known to go abroad occasionally before 1974. To maintain goodwill, UK banks normally pay up if there is a dispute. So the court's decision cannot improve on that; it can only dilute consumers' rights. I fear the latter outcome is a distinct possibility.

Abbey boss pushes on with bank's new habits

Next week Luqman Arnold, chief executive of Abbey National, will face the City's unforgiving banking analysts to present half-year results which he has publicly said will not be wonderful. But analysts, shareholders and customers will be keen to hear word of Mr Arnold's planned three-year transformation of the group, which is 17 months old.

He was given a hard time at the company's annual meeting in April, as shareholders vented their spleen over the controversial Abbey rebranding exercise. But I expect Mr Arnold, an urbane Anglo-Indian, to soothe the doubters. Not before time, as the share price has slumped from £13 to 480p - still around three times the 1989 float price for those who have stayed the course, but quite a few must be sitting on losses.

However, my inquiries this week suggest that Mr Arnold is warming to his task and is growing in confidence that he will achieve the transformation he envisages. If so, shareholders and customers will benefit.

Essentially, what the reforms boil down to is a return to the ethos of Abbey's building society days, whilst remaining in the framework of a quoted plc. Pricing is already being corrected, to bring Abbey in line with its main competitors. Products and service standards, too, are being brushed up.

The key words are transparency and honesty.

I do not swallow these aspirations without a murmur. Abbey and Mr Luqman have much to do to show they can perform consistently over the long term. But I sense they are on the right track.

w.kay@independent.co.uk