Funeral Plans: Regulation

Debate between Jim Shannon and Neil Gray

Wednesday 5th June 2019 Commons Chamber

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

I am grateful to you, Mr Deputy Speaker, and to Mr Speaker for granting me this opportunity to raise the important issue of funeral plan regulation again in the House. Much has changed since the last time I brought a debate on funeral plan regulation to the Chamber. I will go into more detail regarding what has happened in the industry shortly, but first I want to explain why this is such an important issue and why action is so important.

Pre-paid funeral plans allow consumers to save for a funeral. If they are sold and handled appropriately, they are a good thing. They allow people to purchase a funeral and secure it at today’s prices. They can avoid the double-whammy shock of losing a loved one and dealing with the financial consequences of a funeral at the same time. Alongside appropriate regulation of the funeral industry itself and the wider anti-poverty work that is required, funeral plans are the best route to avoiding funeral poverty.

I proposed a ten-minute rule Bill in December 2016, as I want to see better regulation of this market. The debate in 2016 followed a report from Citizens Advice Scotland that same year, commissioned by the Scottish Government, on funeral poverty. It made a series of recommendations regarding the action required to stop funeral poverty. Many of them were devolved responsibilities that are now being pursued by the Scottish Government, but some were issues reserved to Westminster, including this one of the regulation of funeral plans. That report, with its case studies of people being mis-sold funeral plans, and representations made to me by constituents prompted me to ask this Government whether they should be doing more. According to UK Government figures, about 200,000 funeral plans are sold each year, and I expect that figure to continue to rise.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Neil Gray]

By all means. [Interruption.]

[Jim Shannon]

Mr Deputy Speaker, I did seek the hon. Gentleman’s permission beforehand, so I have done this the right way.

I congratulate the hon. Gentleman, who so often brings to an Adjournment debate many important political issues that we are all involved in and which I am aware of as well. I know of many people who immediately began a funeral payment policy when they retired, yet this has proved to be a negative move for many families. Does the hon. Gentleman agree that, while it is admirable that 95% of funeral plan providers are signed up to regulation by the Funeral Planning Authority, the fact that this is completely self-regulated takes some of the sting out of the tail? I believe there is also a role for the Government to play, perhaps in stronger legislation to protect the elderly and the vulnerable from being taken advantage of as they come towards the end of their life.

[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.