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Mr. Deputy Speaker (Mr. Michael Lord): As the Minister for the next debate is not yet with us, I shall suspend the sitting until 1 o'clock.
12.53 pm
Funeral Services
Mr. David Chidgey (Eastleigh): On a point of order, Mr. Deputy Speaker. I seek your advice. What happens when an hon. Member is ready to make a speech but the Minister is not present? Is there any point in continuing without a Minister?
Mr. Deputy Speaker (Mr. Michael Lord): The Standing Orders of the House are quite clear: we do exactly what we have just done.
Mr. Chidgey: I will make my remarks and hope that someone will respond to them in due course.
I am grateful for this opportunity to raise a matter that is causing widespread concern--namely the lack of regulation of the provision of funeral services. That concern is felt by the users of the services, who are the relatives of the deceased, and by the providers of the services, the funeral directors themselves. It is also now felt by charity workers who find themselves involved in selling prepaid funeral plans on commission for their charities. There is also concern in the financial services sector which finds that prepaid plans are being sold in the same way as financial services but without any statutory control.
I will speak for only about 10 minutes because I know that the Minister--who is not in his place--is keenly aware of the issue and I want to leave him as much time as possible to outline his proposals.
The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths):
The Minister is in his place. Perhaps the hon. Gentleman would like to tell the House whether the account in the Evening Standard, to the effect that he has already raised the issue in the House, is accurate. It is not customary to use the past tense; hon. Members usually make a speech first and then issue a press release.
Mr. Chidgey:
I am sure that I can resolve the confusion after I have finished my speech. I apologise for not recognising that the Minister was in his place; there was some confusion due to his late arrival.
One of the main causes of concern is cold calling by telephone--for instance, selling memorial plaques months after a cremation has taken place but while the bereaved are still suffering the trauma of losing a relative. The Mail on Sunday featured the case of Christine Hall from East Sussex, who received a mail shot advertising a prepaid funeral service. A few days after she had thrown it away, she received a telephone call from a charity which wanted to know whether she had received the literature it had sent her and whether she was interested in buying such a plan. She was asked whether she had booked a burial plot for herself and her husband and told that if she had not she should do so quickly. Christine is 62 and was upset by the timing of the call--and rightly so, as her husband Henry is 89 and seriously ill. It was a traumatic experience for them.
The Daily Mirror reported the case of Vanessa Rylance from Birkenhead, a woman whose 77-year old mother was diagnosed as having cancer. Days after her mother had left hospital, Vanessa received a hard-sell letter suggesting that she take out a plan to cover her death.
I will deal now with the concerns of the providers--the traditional, family-run funeral firms. It is now common knowledge that funeral provision is big business, and multinational organisations are moving into the market. In fact, some 25 per cent. of the business was bought by one company, which led to the involvement of the Monopolies and Mergers Commission. In due course, that company was required to make some divestments to bring it within the regulations.
There is a lack of transparency about the ownership of funeral firms. As the Minister will know, there is a requirement for owners of a company to make their names and interests clear. When family businesses are bought out, there are far too many instances of the old name still appearing over the door of the funeral parlour; it is not until one goes into the back room that one finds a small plaque revealing the true owners of the firm.
There is also a lack of transparency in the prices. Far too often, people telephone funeral directors and receive a low quote, but the full price is not made clear. Once they get into the parlour, they are persuaded to spend far more on the funeral than they intended. The price quoted is the price of the funeral alone and does not include the cost of the burial plot, the church service, a book of remembrance, which is apparently becoming the vogue, or the headstone. There are disturbing cases of headstones being offered at a price way above that which would be charged if one went directly to the stonemason. In addition, plots rented in a crematorium have a habit of increasing in price over the years until the rents are far greater than was ever imagined.
There is also concern about mergers in the funeral business. Many family firms are being merged into international corporations, leading to lack of choice and competition. If one organisation owns the funeral parlours, crematoriums and cemeteries and provides the prepayment plans, that clearly means the removal of choice and a reduction of competition. The most worrying development, however, is that the same firms are now winning contracts for NHS bereavement services.
National health service hospitals are now in the business of contracting out those services that are not considered core health services--one of which is the bereavement service. Hospitals are putting the provision of such services out to tender, and it is understood that in one case a firm has offered to provide the service at a zero price. Why should anyone provide a service for nothing? Unfortunately, a large hospital can expect hundreds--perhaps even a thousand--deaths per year, and that number of funerals is big business.
It is very difficult for a bereaved relative or the relative of someone who is dying to distinguish between a bereavement counsellor, who is a trained psychologist and understands the effect of trauma, and a bereavement officer employed by a huge corporation whose main objective is to sell funerals.
My final and most important point relates to the marketing, selling and management of prepaid funeral plans. There has been some unfortunate negative publicity in the press about the selling of such plans by a firm called
SCI, an American funeral giant which is an offshoot of Age Concern. Age Concern is a highly respected charity which does a great deal of good work. It aspires to raise standards and introduce quality into the provision of funeral services.
Age Concern is a highly commendable charity, but it is impossible for an organisation to control the activities of over-zealous salesmen at the point of sale, and there are too many cases of elderly people suffering distress when subjected to the hard-sell approach. That distress is keenly felt by the charity workers. Negative publicity works against charitable aims, and I hope that Age Concern will be reviewing that aspect of the matter very carefully. Locking in prepaid funeral plans to one provider of funeral services is fundamentally anti-competitive. Anyone purchasing such a plan is obliged to use SCI-owned funeral parlours, so the plans limit choice and remove competition.
About £250 million is now invested in prepaid funeral plans, and there seems to be no regulation of the management of the funds thus amassed and no provision for purchasers to benefit from the profits accrued by those investments. The plans seem to be totally free of the requirements applying to other financial services under the financial services legislation.
Two years ago, the Office of Fair Trading recommended regulation of the funeral services industry. I understand that one of the Minister's colleagues is keenly interested--
Mr. Ivor Caplin (Hove):
The hon. Gentleman will be aware of my interest in regulation, because I wrote to him last week when he secured this debate. In his reply to me, he said that he could not allow me any time in the 15 minutes allotted for his speech because of the many Opposition Members who wished to speak in the debate. Where are they?
Mr. Chidgey:
That was a spurious intervention. The point that I made to the hon. Gentleman--in a private letter which was written with the best of intentions--was that many hon. Members had asked to speak in this debate and I felt that it was only fair to say no to them all or there would be insufficient time for me to say what I hoped to say in 10 minutes, thereby allowing the Minister ample time to reply. That point should have been well taken by the hon. Gentleman.
I understand that the Minister's colleagues are well aware of the issue. When in opposition, the Government stated that they would examine the matter very soon after coming to power. I hope that the Minister has come today with some firm proposals and a timetable for legislation to regulate provision of funeral services, and in particular to deal with the issue of transparency of ownership of funeral parlours, crematoria and cemeteries, so as to maintain choice, competition and quality.
I hope especially that the Government have proposals to draw a clear line between NHS hospitals' bereavement counselling services and contracted-out bereavement services--which is really just another name for the commercial opportunity provided for large funeral directors to access markets for thousands of funerals.
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