Sex, the devil and financial capability
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Education secretary Ed Balls’ move to make sex education compulsory for all 15 year-olds is predicated on the idea that knowledge gives control and this will drive down the number of teenage pregnancies which at 41.9 per 1,000 makes the UK the most sexually irresponsible nation in Europe.
The rational is very similar to the one that underlines the Financial Services Authority’s financial capability programme which is driven by the assumption that if we could only add two and two and understand percentages, we wouldn’t allow ourselves to fall into debt or be ripped off by some predatory lender.
The fact that we are as financially incontinent as adults as we are rampant as teenagers is being used as evidence that we need to be better educated in these activities but that’s a very two dimensional assessment of the situation.
For instance, it would be reasonable to assume that lending institutions and the government are beacons of excellence when it comes to financial capability but some of the really big banks have proved that they are as financially incontinent as the rest of us and we have a Prime Minister who believes its possible for the UK to borrow its way out of debt.
Perhaps Balls, who almost became chancellor, and Alistair Darling who stood in his way, should bury their differences and see if they can learn anything from this pattern of failure?
I’m not suggesting that the FSA and teachers shouldn’t focus on financial and sexual capability. In both cases the evidence is that the capability is there – it is the willingness to exercise it responsibly that is missing.
That’s not to say that such behaviour is irrational. There’s an indisputable logic about being wilfully irresponsible, whether we are a pregnant teenager or a debt-ridden consumer because in both cases our behaviour is being incentivised by the state.
Writing in the Sunday Times, columnist Eleanor Mills identifies the mindset of a pregnant teenager in just two short sentences: “…in Britain a pregnant 16-year-old can expect about £200 a week in benefits and possibly her own flat. For girls of limited prospects, often the offspring of teenage mums themselves, a marriage to the state is not such a bad option.”
And the same can be said of the feckless financial institutions, providing they are big enough, and of many consumers who wilfully fall into debt – one way or another the state will cushion the blow.
Moreover, with base rate at 0.5% the logic of the financially savvy is why save when it’s so cheap to borrow. We want it now and let the devil take tomorrow.
