I thank Mr Speaker for granting this important Adjournment debate. I know that my constituents and other hon. Members’ constituents who have been affected will be grateful that the situation has been recognised with due seriousness.
On the first day of the Easter recess, my constituent Patrick Hughes called my office following the collapse of Safe Hands Funeral Plans, which had gone into administration the week before. Quite understandably, he was extremely anxious about what would happen next. Some years ago, Mr Hughes had bought a policy or plan with Safe Hands at an initial cost of about £6,300. It was a significant investment, but it was worth it: he was paying for peace of mind that his family would not have to worry about finding the money for a funeral when the time came.
Funerals do not come cheap, but we all want to be able to give our loved ones the best send-off we can. A key attraction for Mr Hughes and for so many like him was the security that they were being offered. “Nothing can go wrong,” they were assured. “This is a smart investment: your plan is guaranteed and your family will be grateful that they won’t have to worry about it at their time of grieving.”
To date, Mr Hughes has been contacted exactly once since the business went into administration: with the initial letter informing him of the collapse. Like the many thousands of policyholders in the same boat, Mr Hughes tried to make contact with Safe Hands or its administrators to get some answers about what would happen next. His letters went unanswered. The phone lines would not connect, or the phone would just ring out. Panic began to set in.
Customers were told that the company was
“uncertain that the funeral plans will be able to be fulfilled” and that they should consider their plans
“terminated with immediate effect”.
People were realising that it was becoming very likely that their life savings had been lost. Safe Hands was not regulated by the Financial Conduct Authority. Anecdotally, I understand that it was regarded in the wider funeral industry as a cowboy—a reputation that did not reach its customers in time for them to reconsider their investments.
The thing is that such plans, if provided by reputable companies and regulated properly, could be immensely beneficial. They really could give some peace of mind. That is why, along with the sector and colleagues, I wholeheartedly welcome the Government’s plans to bring funeral planning services under the remit of the Financial Conduct Authority this July. The plans, which include assessments of providers, fund protection measures, stricter advertising rules and bans on cold calling, will hopefully protect future customers from falling victim to the scams of unscrupulous companies such as Safe Hands. I appreciate the letter that the FCA sent me in advance of this debate, setting out how the regulatory reforms will work; I look forward to taking up its offer of a meeting to discuss them in more detail.