Funeral Plans: Regulation

Debate between Neil Gray and Carolyn Harris

Wednesday 5th June 2019 Commons Chamber

[Neil Gray]

I am well aware of that family-run business, and I share its concerns. My hon. Friend speaks well for them, and it is a point that I wish to make. How do the Government protect competition in the market to make sure that smaller funeral providers and funeral plan providers are not squeezed out of the market by the burden of FCA regulation? Of all the criticisms of the route that the Government have chosen, that is the one that is expressed most keenly by people in the market.

Given the number of funeral plans that have been sold in recent years and the growth in the sector, it is critical that we get the regulation right and ensure that consumers are protected. The Citizens Advice report published a few years ago gave examples of mis-selling—people were promised particular aspects of a funeral, but when the plan was redeemed they were told that that was not part of the deal. Particular cars, coffins or flowers that were chosen for sentimental reasons, for example, were not delivered, although people thought they had paid for them. There have been widespread reports of bad sales practices such as cold calling, aggressive selling and the targeting of vulnerable customers.

Since I introduced my ten-minute rule Bill, which proposed the areas of regulation that the Government now appear to have adopted, a significant amount of change has taken place in the market. The FPA, as I have said, has taken great steps to reform its practices as a voluntary market regulator, and it suggests that 95% of the market has signed up to its regulatory model. There have been great moves across the market to reform practices, including by plan providers themselves. Some of them are moving away from the third-party selling model that appeared to be problematic and was part of the 5% issue that concerns us all. I am pleased that my Bill proposal, which was intended to spark debate and action for change, has led to that progress. I am grateful to the Minister for taking action.

[Carolyn Harris (Swansea East) (Lab)]

I thank the hon. Gentleman for introducing the debate on a subject that is close to my heart. I met him, the hon. Member for Strangford (Jim Shannon) and other Members attending this debate to form a working party, and we intend to consider how we support the Government in looking at environmental funerals, funeral plans and the social fund. While I welcome the Government’s announcement, does the hon. Member for Airdrie and Shotts (Neil Gray) agree that we need to look at the small percentage of funeral plans that are not covered by the FPA? In that two-year window, there is an opportunity for people who can least afford to pay exorbitant fees to be exploited.

[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.