Funeral Plans: Regulation

Hannah Bardell Excerpts

Wednesday 5th June 2019 Commons Chamber

[Neil Gray]

I thank the hon. Gentleman for his intervention, and it would not be an Adjournment debate without his intervening.

The hon. Gentleman raises an important issue, which is the current status of the Funeral Planning Authority, which I will come on to discuss in greater detail in my speech. He is right that it is a voluntary body at the moment, and there has been much debate about whether the best route of regulating this market is through putting the FPA on a statutory footing or through Financial Conduct Authority regulation. The Government appear to be looking at FCA regulation, which I am happy enough with, although I do have some concerns about the direction of travel, which I will ask the Minister to look at. The hon. Gentleman is right. At the moment, the FPA perhaps does not have the teeth to regulate the market properly. It would acknowledge that although it has done a great deal of work in this area since my ten-minute rule Bill was introduced, if it were to have a full suite of powers to regulate the market properly, that would require it to become a statutory body.

[Hannah Bardell (Livingston) (SNP)]

The hon. Member for Strangford (Jim Shannon) is right. My hon. Friend the Member for Airdrie and Shotts (Neil Gray) brings a great number of important issues to the Chamber, and this is one on which he has spoken many times. He will be pleased to know that this week I heard from a local family-run funeral service in my constituency, who expressed support for the Treasury proposals and for enhanced consumer protection. He made the point that most funeral firms, as we know from the Treasury proposals, are small and micro businesses. He is concerned, given that the majority of funerals are delivered by those businesses, that such businesses could be at competitive disadvantage compared with larger providers and threatened by the cost of FCA regulations. What are my hon. Friend’s thoughts on that?

[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.