Funeral Plans: Regulation

Debate between Jim Cunningham and Neil Gray

Wednesday 5th June 2019 Commons Chamber

[Neil Gray]

I thank the hon. Lady, who is a doughty campaigner in this area, for her intervention. It should go without saying that she has done a great deal, particularly on children’s funerals, and I commend her for her work. She is absolutely right. There is a potential gap, with the two or three-year transition period the Government propose, before moving to FCA regulation. I will turn to my concerns about that in due course, but she is absolutely right to raise the issue and I look forward to continuing to work with her in this area to try to drive the changes we want.

I am pleased that my Bill proposal, which was intended to spark debate and action for change, has started that progress. I commend the Minister in particular. I am grateful that the Government are taking this issue seriously enough to consult on funeral plan regulation and are now proposing moving to a model of FCA regulation. A consultation is now under way until August on what the Government now propose to do in this area. I am grateful to the Minister and to some of his colleagues who also wish to see change and have supported my work, such as the hon. Member for Southend West (Sir David Amess), but I do have some concerns about the direction of travel that I am sure the Minister will be able to answer.

There should be some clear benefits to moving to FCA regulation, such as access to the Financial Ombudsman Service for those who have complaints about the products they have received, but it is not yet clear whether consumers who have a dispute over a funeral plan product will be able to access the financial services compensation scheme.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the hon. Gentleman on securing the debate and, more importantly, on his Bill. Has he noticed how funeral costs and some of the practices that go on in the industry are now being highlighted in the press? Does he not agree that there should be a good look at costs in more depth? Very often, bereaved families feel ashamed to raise the question of cost, because there is the matter of pride.

[Neil Gray]

I absolutely agree with the hon. Gentleman, who raises an important issue. He might be aware that the Scottish Government are doing some work in this regard to set up a funerals regulator, part of which will be looking at the practices of funeral directors. I believe—I will turn to this in my speech—that that is probably what the Competition and Markets Authority investigation will be looking at, too. It is also right to acknowledge that many family-run funeral directors are linchpins of their communities. Some take on great burdens, acknowledging the hardships their customers are going through. It is right that we acknowledge that, while also accepting that there are some in the market who are not perhaps operating to the qualities that we would hope and expect to see.

On the financial services compensation scheme issue, I hope the Minister will be able to clarify in his response whether he envisages this particular model of regulation covering the financial services compensation scheme.

I am also concerned that although the Government appear very keen to move forward to a different regulatory model, as they have accepted there is a problem, they have not, in their own work, quantified the consumer detriment in the market. There was clearly a problem identified by Citizens Advice Scotland researchers in 2016, but to what extent has that problem been improved or exacerbated? The Government need to do a bit more work to update the findings of the Citizens Advice Scotland report and also the “Fairer Finance” report that followed my 10-minute rule Bill. It is clear that there are still issues in the market that need to be addressed, but I think the Minister must agree that it is for the Government now to quantify what they are so that the FCA is clear as to its remit and focus.

There also needs to be greater clarity on the likely three-year wait for changes to take effect. First of all, what happens with regulation in the interim, as there will be no incentive for those currently signed up to the voluntary scheme to carry on engaging? There certainly will not be an incentive for those outside FPA regulation—those we really wish to target in whatever model of regulation we bring forward—to come on board. What assurances can the Minister give about what the market will look like and how it will behave during the three-year wait until the FCA fully takes up responsibility for the market? Will the Minister say how many firms will be regulated under the scheme? The Treasury’s consultation document accepts that there will be consolidation in the market, as my hon. Friend the Member for Livingston (Hannah Bardell) suggested. In other words, there will be fewer companies offering these services because of the burden of FCA regulation. Has the Minister assessed whether he feels this model would continue to provide appropriate competition in the market for the consumer? Of course, the Competition and Markets Authority has been critical of some bigger funeral companies for inflated funeral costs, yet this move may give an even bigger market share to those same companies.

I do not have a crystal ball or any insider knowledge, but I fully expect the CMA to follow the Scottish Government’s lead by recommending a funeral regulator, which will look after the funeral director industry and probably some of the at-need market. That means we will be left either with a bit of a crossover in regulation or blurred lines as to who will have overall regulatory responsibility. Perhaps the Minister can clarify how he sees the regulatory environment working when both these areas are established.

In conclusion, for the last three years I have been working across this House, with the funeral plan market and with campaigning organisations to ensure that consumers are protected from being ripped off when they are perhaps at their most vulnerable. I want to see a system of regulation that stops the outrageous practices that we have had reports of in recent years, and I want to see consumer confidence so that there is a greater uptake of funeral plans to avoid the growing problem of funeral poverty.

I am greatly heartened by the Government’s acknowledging that they share my concerns and have effectively taken on my ten-minute rule Bill. I thank the Minister and his officials for what they have done to date, but I hope he will also accept that there is a great deal of work still to do and many questions to answer. Above all else, we have to ensure that the regulatory system in place for this critical industry gets it right for consumers. That means ensuring that we have consumer protection from cold calling, greater transparency in pricing, greater transparency in the products on offer and a better link between some plan providers and the funeral directors. There needs to be greater recourse to pursue complaints and to be compensated when things go wrong.

I am not particularly bothered about who from which body has responsibility for the regulation at the end of the day. I just want to make sure that it is right and that it stops people being ripped off and funeral poverty being exacerbated. We must therefore look at where problems remain with similar issues in the over-50s plan market, which is under FCA regulation, and learn lessons for funeral plan regulation.

Thank you again, Mr Speaker, for granting this debate. I want to know from the Minister that the FCA will always see this area as a priority and that he is alive to the concerns I have expressed this evening, while accepting my thanks for pursuing this matter in the way he has.

The Secretary of State’s Handling of Universal Credit

Debate between Jim Cunningham and Neil Gray

Wednesday 11th July 2018 Commons Chamber

[Neil Gray]

On the last point, the NAO entirely contradicted the hon. Lady’s point. One fact I would relay back to her is that the Government’s own figures—this is from the DWP—show that 40% of universal credit claimants are living in poverty and struggling to make ends meet. I hope she will consider that fact as we build towards the autumn Budget, when I hope we can form a coalition around calling on the Chancellor to invest in universal credit.

[Mr Jim Cunningham]

The hon. Gentleman is making some excellent points. When we talk about getting people back into work, we lose track of the fact that people who have serious illnesses and will never work again are facing delays in their personal independence payments, but nothing seems to happen about it. I have a number of cases like that, and if the Secretary of State wants, I will send them to her so that she can see this for herself.

[Neil Gray]

The hon. Gentleman makes some very fair points. We of course know from the recent statistics published by the DWP that 59% of claimants impacted by the two-child policy on tax credits and by universal credit are already in work. These are facts, and the Government should be considering them.

This is not of course the first time that this Government have tried to dismiss evidence placed before them showing the failures of universal credit. When the Trussell Trust said that food bank use was higher in areas where universal credit had been rolled out, UK Ministers described its evidence as “anecdotal”. In actual fact, the evidence came from 425 food banks across these isles, delivering 1.3 million three-day food parcels a year.

This week, the four housing association federations of these isles have called on the UK Government to fix the “fundamentally flawed” universal credit system. With colleagues, I met the Scottish Federation of Housing Associations this morning, and it revealed the scale and linkage of debt with universal credit. It is startling, and it is evidence-based. Ministers have replied that issues with debt were complicated and could not be linked to a single source, in spite of the evidence in front of them saying that nearly three quarters or 73% of tenants on universal credit are in debt, compared with less than a third or 29% of all other tenants.

Social Security

Debate between Jim Cunningham and Neil Gray

Monday 5th February 2018 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

It is a pleasure to be able to set out the Scottish National party’s position.

You will not be surprised, Madam Deputy Speaker, if I am rather critical this evening, because I have been speaking about the matters covered by the social security order since my election nearly three years ago. Like the annual review of social security payments, the order covers everything from pensions to maternity allowances, but for many people, there is no annual review, because a number of social security benefits are automatically frozen, regardless of the impact on people who need that support to get by, regardless of the rise in household costs, and regardless of widespread opposition to the continuation of the freeze. Jobseeker’s allowance, child and working tax credit, local housing allowance, income support, child benefit, and the work-related activity group element of employment and support allowance have all been frozen. That means that people who are desperately seeking work, families with children, parents who are working hard but receiving poverty pay, and sick or disabled people will see their support frozen, although their household costs have risen significantly in the past year.

In December, the consumer prices index hit 3%, which means that families in and out of work who need the support of the social security system to get by will need to find extra money just to stand still. The Resolution Foundation has calculated that working families with two children will lose £315 a year as a result of the benefit freeze, and the Institute for Fiscal Studies has said that as a result of higher CPI rates, benefit entitlements will be reduced by an average of £450 per year by 2019-20. We know that this is the worst decade for wage growth in 210 years, and that as a result people who are in work but also in receipt of social security support have had their chances cut off at both ends. As costs rise, they cannot rely on work or social security to help them to keep up.

[Mr Jim Cunningham]

Another issue—I am sure that the hon. Gentleman will come to it—is that of the third child and the so-called rape clause. Nothing has been done about that.

[Neil Gray]

I entirely concur with the hon. Gentleman. He is right to draw attention to one of the Government’s most iniquitous and disgraceful policies. As he has said, no action has been forthcoming to address it.

The End Child Poverty coalition has said that it is because of the four-year benefit freeze that more than 50% of children in the UK’s poorest areas are growing up in poverty. Earlier today, at Question Time, the Minister defended the freeze, saying that overturning it would require primary legislation. I say, “Bring us that legislation and let us vote on it.” The evidence clearly shows the damage that is being done, and I would challenge any Government Back Bencher to vote for its continuation in the face of such evidence. It is time to end the freeze and lift children out of poverty.

Apart from anything else, the Government do not need to continue this, even by their own reasoning. Figures obtained by the SNP from the House of Commons Library show that while the four-year benefit freeze introduced by the Tory Government in April 2016 was intended to result in £3.5 billion of cuts by 2019-20, that figure could now be £5.2 billion owing to rising inflation. The decision not to uprate the bereavement support payment in line with inflation is completely unacceptable while the cost of funerals continues to rise at an incredible rate. What is worst is that the DWP’s own statistics show that 75% of recipients of the new combined payment who have children will be worse off, and that the figure rises to 88% for those who are bereaved with children and in work. The resignation of the entire board of the Social Mobility Commission in December should have been seen as the climax of the Government-driven poverty crisis, but today we see it being driven on.

There are some welcome elements in the order. I am glad that Ministers have used their discretion to uprate statutory sick pay, statutory maternity and paternity pay, adoption pay and statutory shared parental pay, all of which will rise by 3%. They may have done so in the light of a report from the European Committee of Social Rights. I quizzed Ministers about that report earlier, but they appeared to know little about what I was talking about. It states that social security provisions for the self-employed, the sick and the unemployed in the UK are “manifestly inadequate”. The UK is now “not in conformity” with a number of legal obligations in the European social charter, which is a legally binding economic and social counterpart of the European convention on human rights.

--- Later in debate ---

[Neil Gray]

I think we have heard enough, and I am sure that if the hon. Gentleman wishes to, he can make a speech later.

The order will not do much to make up for the lack of conformity that the European Committee of Social Rights has highlighted, and that Ministers seem so clueless about. Its latest report follows the High Court ruling on the UK Government’s changes to personal independence payments, which said that the system “blatantly discriminates” against people with mental health problems, and a report from the UN saying that Tory benefit cuts “violate human rights”. This Government have another new Secretary of State for Work and Pensions, who has thankfully accepted the High Court ruling on PIP. Perhaps it is time for her to take a fresh look at all the other areas of international criticism as well.

On pensions, Ministers will not be surprised at my disappointment that another year has gone by without any action on frozen pensions or to sort out the state pension inequalities faced by women. Accompanying the order are regulations—they are brought forward annually under the negative procedure—ensuring that the state pension uprating will not apply to people entitled to the pension living in certain countries around the world. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) and my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) have been pressing the Government on this matter since their election in 2015. It is an injustice that some people, who have earned the right to their pension like everyone else, have their payments frozen at the rate they first received for the rest of their life abroad. It is just not right that the pensions of those who live in some countries continue to rise while those of others are frozen. Some 550,000 British pensioners are affected, who represent 4% of all recipients of the state pension and half of all those drawing their pensions abroad.

[Mr Jim Cunningham]

I agree with the hon. Gentleman about overseas pensions. I am sure he recalls—I think this was last year or the year before—that a number of representatives from different countries came to lobby us about this situation, which has been ongoing for a number of years. I am sure that we have all received many emails on the subject.