Jill Insley: Out of the red ... and into the blue: the Tories are starting to talk sense

Jill Insley: Out of the red ... and into the blue: the Tories are starting to talk sense

It pains me to say this, but the Conservatives seem to have come up with some very sensible ideas to tackle personal debt, financial illiteracy and financial exclusion. Tomorrow, shadow Chancellor George Osborne will hold a 'debt forum' to announce policies to tackle these serious issues, which have so far confounded the government.

His ideas are expected to include compulsory financial services education for 11- to 18-year-olds, a 'hard' cooling-off period for credit cards ('apply for our card now and you can get 10 per cent off everything today' doesn't sound so good if you have to wait 10 days for activation), and a simpler explanation of 'annual percentage rate'. Does anyone outside the credit card industry actually understand this term, even though this issue is meant to have been dealt with?

It may seem strange that the Tories have launched their personal finance policy with debt rather than the burning issues of pensions or savings, but millions of people will not be able to save until they are helped to solve their debt problems.

This is not going to help in every case: as Malcolm Hurlston, founder of debt counselling charity the Consumer Credit Counselling Service, points out, 'most [of the people who have debt problems] are in trouble because of a relationship breakdown or because they have lost their job. Nothing Gordon Brown or George Osborne does is going to help that.' None the less, this is a good start.

Labour has had nine.....continued below

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years to get to grips with these issues, but children are still not guaranteed to get any personal finance education at school, credit card companies are still free to push their wares when and pretty much how they like, and understanding of financial products is still incredibly poor.

Last week the Treasury select committee focused on financial exclusion, availability of savings products and the exorbitant rates charged by door-to-door lenders. It would be good to see the Tories include measures to cap these rates in their policies. The party is showing encouraging signs of understanding the problems we face. Perhaps they can be educated on this issue too.

First Direct's move to introduce charges for under used current accounts is no surprise. As soon as the Office of Fair Trading started putting pressure on banks to bring down their charges for unauthorised overdrafts, bounced cheques and the like, the banks warned that charges would have to be introduced for customers who stay in credit instead.

As someone whose current account regularly descends into the red, I guess I am biased, but I see no problem with this. All current account customers get a service, so why shouldn't they pay for it? Customers who religiously make sure their balances stay in the black still benefit from standing orders, direct debits, cheque clearance and cash withdrawals. If they have shopped around for a decent account, they may even earn interest on their balance too. Yet miscreants like myself end up subsidising them. It's robbing the poor to help the rich.

As for other banks claiming they have no plans to do the same - I bet they still believe in Father Christmas too.

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