Funeral Plans: Regulation — House of Commons, 2019-06-05
Topic: Domestic Commerce
Neil Charles Gray (Scottish National Party, Centre-left): 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 that the Government have acknowledged 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.