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1.11 pm
The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths): I am very grateful to the hon. Member for Eastleigh (Mr. Chidgey) for the opportunity that he has given to the House to review this important issue. I welcome also the keen interest taken by my hon. Friend the Member for Hove (Mr. Caplin) in the funeral industry and in the problems that people may face when dealing with it. With more than 600,000 funerals organised every year in Britain, the subject touches the lives of millions of relatives.
People tend to use funeral directors at a time of maximum stress, and at such a vulnerable time it is important that they should receive proper protection. Fortunately, British funeral directors have a very long tradition of consoling relatives and of organising funerals with all the care and attention that is so important at that time. I want the high values that traditional British funeral directors have long upheld to be maintained. Some family firms have seen those values passed down through generations.
Almost three years ago, in 1995, the Office of Fair Trading reviewed the United Kingdom funeral business. The then Director General of Fair Trading, Sir Bryan Carsberg, said:
It took the previous Government more than 12 months to consider Sir Bryan's report. They started consultation last year, but the findings were never published or shared with the public; they were--if the House will forgive the pun--buried.
On 7 May 1997, shortly after the general election, I met the new Director General of Fair Trading, John Bridgeman. We discussed, among other things, the 1995 report. I asked officials at the Department of Trade and Industry to examine the issue afresh and to report to me the options open to the new Government.
I have contacted all the main funeral trade associations, asking them what action they are taking to ensure that people who buy funeral plans are fully protected.
Mr. Chidgey:
Will the Minister perhaps clarify when he will be able to reach a conclusion on the recommendations made to him by his officials?
Mr. Griffiths:
On 1 December 1997, I responded to a parliamentary question tabled by the hon. Gentleman. We appreciate the concerns that have been expressed about the issue, and we hope to reach a conclusion as early in the new year as possible.
Because of previous inaction, it is very important that the director general's report on action to deal with findings that are now more than three years old should be updated so that we do not try to take action against problems which have changed. I do not believe that problems no longer exist--we know that they do--but we should take that important opportunity to update our knowledge of the situation.
Mr. Caplin:
In my hon. Friend's deliberations with officials and industry, will the establishment an independent ombudsman service be considered so that real consumer protection can be provided to those about whom the hon. Member for Eastleigh (Mr. Chidgey) is so concerned?
Mr. Griffiths:
My hon. Friend is a great advocate of such a service, which he asked me about on 1 December. As I said then, I would certainly welcome the emergence of an independent scheme to protect consumers.
To avoid creating any doubt among those who provide funerals--funeral directors and prepayment plan providers--I have written to the main trade organisations asking what action they are taking to ensure that people who buy funeral plans are fully protected. I am seeking confirmation that in the case of prepaid funeral plans there is a binding obligation on the funeral director to perform the contract irrespective of any payment that the funeral director receives from the plan provider, and that that obligation is enforceable by the plan holder or his or her estate.
There are therefore three parties to the agreements: the person who takes out a contract, or his or her relative; the plan provider, who initially receives the money; and the person--the funeral director--who will provide the funeral. I am investigating whether, as I hope, the funeral director has a binding agreement with the person who has paid for the plan. It is up to funeral directors to ensure that they receive the money from the plan provider.
Mr. Chidgey:
I draw the Minister's attention to plan providers--the person or organisation with whom the money is invested. I am concerned to hear the Minister's proposals for regulation of the sums involved, which are now considerable. Has he--from his deliberations and discussions--anything more to offer on regulation?
Mr. Nigel Griffiths:
I certainly hope to be able to offer the hon. Gentleman the plans. That was the exact subject of his previous helpful intervention, to which I replied. It goes to the core of the issues that are being considered and I shall make an announcement in due course and in the appropriate way. I can reassure the hon. Gentleman that we are looking into that matter.
In the meantime, so that the House does not think that the Government are not taking the firmest possible action to reassure people, we have been in touch with the funeral trade associations proposing how they should fulfil their contracts and asking them for assurances that funeral directors will honour their contract with the relative or bereaved person in respect of the plan provider. Naturally, the major plan providers are companies of considerable repute. It is important that the funeral director is aware that he or she has a contract with the person who has taken out the plan and that he can recover the money from
the plan provider. If that is not the case, I am seeking their confirmation that, in any case, they are obliged to carry out the funeral.
The hon. Gentleman rightly touched on other matters of concern, including marketing practices. I have written to the Advertising Standards Authority asking whether it is taking action to ensure that any or all such advertising fully complies with its code. The hon. Gentleman mentioned a charity. Where plan providers are linked to a charity, I have asked the Charity Commission to advise on whether there is any abuse or malpractice.
The hon. Gentleman raised two specific cases involving Age Concern. I received a letter from Age Concern giving its side of the story. In the first case that he mentioned, the newspaper article suggests that the person was the recipient of an unsolicited mailing. Age Concern tells me that its records show that she responded to an information leaflet about the Age Concern funeral plan carried inMy Weekly, that she requested a brochure with further information and was telephoned to check whether she required more information. There was no question of a hard sell of a plot and the conversation ended amicably.
In the second case, a different newspaper report suggested that the person had received an unsolicited mailing about a funeral plan shortly after being diagnosed with cancer. I understand that that person was initially mailed as an existing Age Concern insurance customer and subsequently received an information pack about the Age Concern funeral plan. We have been informed by the charity that of course she will not receive any follow-up mailing. Age Concern apologised if she or her family were upset. However, the charity informs me that it has received no direct complaint from the person to whom the hon. Gentleman referred or from her family. The problem that we all face as responsible right hon. and hon. Members and Ministers is that if an hon. Member raises two cases which, for all the sensationalism that there may have been in newspaper reports, do not appear to stand up, it is important--and I urge all hon. Members to do so--either to correct the account that we have received from a highly responsible charity or to provide other cases. My door is never shut to cases of abuse of the nature that was alleged in the newspaper article.
Mr. Chidgey:
I certainly endorse what the Minister has said. I have met the chief executive of Age Concern and I know the sincerity of that charity's approach. My point was not in respect of the merits of the cases; I was drawing attention to the fact that, whether or not the publicity was accurate, it still occurred. I am concerned about its effects on the reputation of the charity.
Mr. Griffiths:
I share the hon. Gentleman's concern. It would have been helpful if he had drawn attention to the other side of the story--that of Age Concern--as I have done.
"the vast majority of those in business are honest, competent and concerned to meet consumers' needs responsibly."
That is as true today as it was then. However, Sir Bryan also warned of the risks facing the public from dishonest or incompetent funeral directors--who are only a tiny minority. He said, however, that the risks are significant.
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