Examination of Witnesses (Questions 220-239)|
6 JUNE 2007
Q220 Chairman: You say "last
Friday" and in your brief you said that it was starting in
Scotland. I spent the weekend in Scotland and this was where it
was starting and I did not really get much of an ideaSue,
Mr Williams: Sue will explain
about how it will unfold.
Ms Cook: I am very serious about
it. Basically, just let me start by saying that the COI say that
government campaigns normally take six to eight months from
Q221 Chairman: We have had it for
Christmas then if it is eight months, we are now in June.
Ms Cook: We have worked very quickly,
and what we have done, because
Q222 Chairman: So why did you not
make the point in March then, "Wait a minute, this will take
six to eight months, we are only getting it at the end of March,
we do not want to disappoint people here"?
Mr Williams: We are very pleased
to have been able to launch it on Friday.
Q223 Chairman: I am sorry, I was
meaning to be co-operative with you but your evidence
Mr Williams: Let me say we are
very, very happy to help the Committee with this inquiry, so do
not worry at all. We have put it in place in two months and got
it launched and in the next two to four months, as Sue will explain,
the whole campaign will unfold. Sue, do you want to give us the
details of how it will unfold?
Ms Cook: Basically we are aware
of what you said at your last meeting, we were aware that we needed
to very quickly get out to people who had lost out from the Farepak
collapse, talking to them about the options available to them
to save for Christmas 2007, which is why we had a launch last
week. However, we believe that the main part of the campaign will
be talking to consumers, including people who lost out from Farepak,
and what we want to do is instead of running just an advertising
campaign, the results of which are fairly transitory, what we
intend to do is actually go into communities, work to develop
tools within communities
Q224 Chairman: I have got you. I
am sorry for rushing, but the Park Group which is 90% of the voucher
market says that you have not consulted them.
Ms Cook: No, because what we are
doing is we are developing the tools with the community, with
these different groups. We will talk to Park but the fact that
Q225 Chairman: If Park Group are
there and they have got 90% of the market and they have a tradition
of being involved, it would seem to me to be realistic and say
let us go to these people and see what their ideas are so we can
pick up the issue here.
Ms Cook: We have talked to Farepak
victims, particularly Susie Hall. When the trust is in place I
am absolutely delighted to work with Park in terms of rolling
out the campaign and in terms of developing the tools that we
use, but we have consulted widely with the DWP, Citizens Advice,
credit unions and also the private sectors and we have had quite
a lot of conversations with them.
Q226 Chairman: But credit unions
say to us that the consultation has not gone beyond a superficial
Ms Cook: No, no.
Chairman: Really what I am saying to
you here is I think we need a gee-up here. That is the reason
why you have been invited to the Committee, to get the gee-up,
to get something done. Peter.
Q227 Peter Viggers: What arrangements
are in hand to protect people who invest in prepaid schemes for
funeral arrangements and is there a read-across, which can be
used more generally?
Mr Ashworth: The arrangements
for prepaid funerals operate under the FSA regime through an exemption
process whereby they can put trust arrangements in place and then
they are free from most of the FSA regulatory regime. The FSA
contributed to the advice that we gave to the DTI before Christmas
and did make reference to funerals. They felt there were some
problems around hamper schemes in terms of defining the actual
product. That was something that we had come to a conclusion on
as well, that there are a lot of unregulated things out there
that people use quite happily. The risks will vary and identifying
what you actually want to regulate is a particular problem, so
we were at one with the FSA on that, that we thought that was
not necessarily the appropriate way to go at that time.
Q228 Peter Viggers: Are you satisfied
that there are satisfactory arrangements to protect those who
invest in such schemes?
Mr Ashworth: In hamper schemes
of the type
Q229 Peter Viggers: I am thinking
of funeral schemes.
Mr Ashworth: We are satisfied
that that was followed to an OFT report and we are satisfied that
that is in place at the moment and the FSA have not contradicted
us at all.
Q230 Jim Cousins: In March when you
agreed to do the Christmas awareness scheme, who were you approached
Mr Williams: We were approached
by the DTI to undertake it.
Q231 Jim Cousins: Why did you agree
Mr Williams: We thought that an
awareness campaign of this sort could help the consumer in this
market to understand better the products that they are trying
Q232 Jim Cousins: Did you explain
to them that a COI type government campaign normally takes six
to eight months to set up?
Ms Cook: I think they were aware
of that actually. We were asked to run a consumer education campaign
to increase the skills of people who are not aware of the options
available to them. I would imagine that the DTI and the Treasury
who trusted us with this money were well aware.
Q233 Jim Cousins: Sorry, the Treasury?
Ms Cook: The Treasury entrusted
us with the £1 million and they will be paying us £1
million to run the campaign. The campaign that we will run will
go deep into communities. For £1 million we could have had
eleven minutes of TV advertising; that would have taken us three
months to produce and book. That would really have been transitoryokay,
it would have created a bit of pizzazz at the time, but we are
actually talking about real people having this information delivered
to them in a face to face way so that they take it on board and
they can use it in this situation and other situations, and we
believe that that is a valid and very good use of £1 million
rather than a quick advertising campaign which would not get those
people to get those skills in a way that would be useful to them.
Q234 Jim Cousins: How does your campaign
reflect the fact that the trust account system will be up and
Ms Cook: That has been agreed,
as you heard earlier, recently, so our campaign will reflect that.
We did not particularly want to launch before that trust was in
place and of course everything we say will reflect the fact that
people's money will be safe when they invest in Farepaksorry,
Jim Cousins: Yes.
Chairman: It is all happening this week.
Q235 Jim Cousins: It is indeed. When
you are deep into communities, just remember what happens on the
streets of Portsmouth, the Committee has been told that already
this afternoon. To what extent do informal savings products figure
in your campaign?
Ms Cook: We are going to cover
things such as credit unions, banks and building society accounts,
stamps and retailer savings schemes, milkmen-run schemes and hamper
and voucher schemes.
Q236 Jim Cousins: Sorry, milkmen?
Ms Cook: Yes, it is a scheme that
is used quite a lot actually where people give their milkman £2
a week and collect stamps and use that for Christmas, for buying
a hamper or whatever. It is a popular scheme and it has quite
a few similarities to hamper schemes. What we will do is we will
include a wide range of things that are available to people. We
are not in the business at the OFT of telling people what to do
or what not to do with their money, how to save or how not to
save, we are in the business of saying to people "This is
your range of options, these are the features of these options,
you need to choose something that will work for you as an individual;
obviously the way that you save and the way that I want to save
may be different". That is really what we are trying to do,
we are trying to show people what the options are that are available
to them, we are not telling them how to spend or save their money.
Q237 Jim Cousins: Is it not inevitable
that in your presentation if you point out that certain products
are regulated through the Financial Services Authority or whatever,
that is bound to steer people towards them?
Ms Cook: There is an element of
risk in everything that people do. If people are aware of what
the risk isfor instance, if a major retailer went into
liquidation and you have been saving with them, then you would
lose your money, but the risk is obviously not that great in that
situation. People are intelligent enough to understand that there
are different risks in terms of saving in different places and
it is up to individuals to decide what level of risk they are
prepared to take. I do not know if Sean wants to add to that.
Q238 Jim Cousins: Thank you, and
you are going to cover supermarket. I do hope you will point out
a gentleman this afternoon from Park referred to the Tesco's schemeit
is only fair to point out that I am passing on information from
a constituent of mine but the Morrison's one actually is more
Ms Cook: I will bear that in mind.
Chairman: We could not possibly comment.
Michael, and then John.
Q239 Mr Fallon: Ms Cook, could we
just be clear about this advertising campaign for the £1
million. Did you tell us a few moments ago that there was not
Ms Cook: No, it is going to be
advertising and what we would call consumer education which is