§ Mr. Lawrence Cunliffe (Leigh)
I beg to move,That this House considers there is a need for an investigation into prices and practices of the funeral industry with a view to seeking to provide a Bill to establish a funeral industry registration council and to give that council powers and functions for the regulation of firms and individuals offering funeral services and arrangements; to provide the council with powers and functions to ensure that persons employed as funeral directors shall be trained and qualified to approved levels and to require the registration of all firms and persons providing funeral services with the council; to impose requirements upon such firms and persons; to make provision for the adequate training of persons employed as funeral directors; to make provision for a code of conduct under which all such firms and persons shall provide their funeral services and to ensure a satisfactory level of consumer protection for these services; to define offences under this code of conduct and specified penalties; and to make provision for other related matters.Several hon. Members were intrigued when they learned that it was my intention to table a motion about the funeral industry. On three or four occasions, over three or four years, I have called in this Chamber for an inquiry into the prices and practices of the industry. In 1989, I secured an Adjournment debate, in which I dealt in detail with a report issued by the Office of Fair Trading. I dealt with some of the unpalatable experiences that several of my constituents had endured. These related both to price and to treatment.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
Is it envisaged that the funeral industry registration council to which the motion refers would cover the whole United Kingdom, or would it be restricted to England and Wales? Over the years, I have received many complaints about the high cost of funerals in Scotland and about related matters.
§ Mr. Cunliffe
If the motion were accepted, and a registration council were set up, I should like it to embrace all four countries in the United Kingdom.
I referred to the Adjournment debate on this subject in 1989. In view of the time constraints, one is restricted in one's comments in such a debate. Indeed, the convention is that the time is shared equally between the Member raising the subject and the Minister replying.
For me, this whole matter started in 1977 or 1978, when a constituent wrote to me following the deaths, first, of her father and then, within a matter of months, of her mother. The services required in the case of the second funeral were exactly the same as those required in the case of the first, but, to this lady's amazement, there was a price difference of £108. To some people, funerals are extremely expensive, and this lady was rather distressed, as she was not in employment.
In the first instance, my constituent contacted the company involved. She was told that, between the dates of the two funerals, the original firm had been taken over by a larger company, and that that company had laid down certain guidelines about standards and profit margins. When I examined the two accounts, I discovered that the £108 was accounted for by an increase in coffin price and an increase in what are known as professional charges. That is something to which I shall refer in considerable detail later.
I wrote to the company.
§ Mr. Cunliffe
I shall give the name later. In fact, since the takeover, the name has changed. The firm is now owned by a multinational company. Later, I shall refer in great detail to it and to other companies. When I wrote a letter to that company, I received a reply similar to that sent to my constituent, but I was pleased that it included a £100 refund.
Within a matter of weeks, there was a similar incident involving another firm of undertakers in my constituency. When I wrote to that company, I received almost the identical reply that I got from the first, and another £100 rebate for the constituent concerned. I began to think that, if the profit margins were so high that companies could make rebates of that size every time they received a formal inquiry into the cost of a particular funeral, those margins needed investigation.
In my research, I discovered that there had been a gradual takeover of many traditional, independent funeral directors in the north by large companies. As costs were also rising rapidly, I sought an Adjournment debate, which coincided with the publication of a report by the Director General of Fair Trading, which had some startling things to say about certain practices and establishments, and about a tendency to create monopolies.
There was also a 30-question survey of about 900 people who had recent experience of dealing with funeral directors. At that time, the National Association of Funeral Directors operated a voluntary code of practice, which made for greater clarity in respect of estimates, the type of funeral, and the services to be provided—a hearse or limousine, embalming, and so on—in ensuring a reasonably simple and dignified funeral. According to the OFT investigation, that code of practice was being honoured by only 25 per cent. of funeral directors.
Dying is a taboo subject which touches people's sensitivities and emotions. The job of the funeral director is one which requires superb diplomacy, and there is a natural reluctance to delve too deeply into the question of cost at the time that a funeral is being arranged.
§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
Did that survey make the point, in respect of advice being sought by any individual, including even a distant relative, that the person who makes the initial contact with the funeral director is liable for the cost at the end of the day?
§ Mr. Cunliffe
I have no knowledge that that is the case, and it was not covered by the investigation that I mentioned.
§ Mr. Simon Burns (Chelmsford)
Does the hon. Member for Leigh have any evidence that the percentage of funeral directors abiding by the code of conduct has increased from 25 per cent. since 1989, or has it remained static?
§ Mr. Cunliffe
The National Association of Funeral Directors represents a respected and honourable profession, and I shall refer to it in due course. I shall also give more figures later, but there has been some response to the inquiry's findings in respect of that earlier code of conduct. I shall quote also the new code of conduct that was adopted in May 1990.
§ Mr. John Bowis (Battersea)
The hon. Gentleman rightly draws attention to the need to maintain high standards of service—I am entirely with him on that—and competition if those high standards are to be achieved. Will he comment on the increasing practice in some parts of the country, whereby local authorities make a monopolistic municipal deal with one funeral director? The intention might be to provide a lower-cost service, but it will be subsidised by the community charge payer. Might not that ultimately harm competition and the protection available to the members of a community, if it results in fewer companies and less choice?
§ Mr. Cunliffe
Municipal authorities are not allowed to own any form of funeral company. They are permitted only to provide a service, and it cannot be related to any element of the community charge under existing legislation—and I do not imagine that such a thing will be allowed in any future legislation.
There are approximately 650,000 funerals a year, but the number is declining, and I shall explain the reasons for that. There are about 2,500 funeral directors, with a total turnover of from £250 million to £270 million a year in direct funeral costs, and another £100 million to £120 million in ancillary services such as the provision of flowers, cards, the saying of masses, and so on. It is therefore a pretty big commercial operation. One does not like to associate commercialism with a distressing aspect of life, but that commercialism is a fact.
Why have large undertakings moved into the industry? Is it because they find certain aspects of it extremely profitable? That is a cause for concern.
§ Mr. Roger Knapman (Stroud)
The hon. Gentleman makes the point, as he did in his Adjournment debate in 1989, that the funeral industry is making excessive profits. Is not it interesting, however, that the Co-operative Wholesale Society recently saw fit to dispose of its undertaking business? In view of the hon. Gentleman's remarks, why should it have done so?
§ Mr. Cunliffe
In recent months, other large companies have decided to sell. The reason is all to do with investment and profit margins, and I do not exclude any organisation of whatever size and character from criticism—and in some cases compliments. I shall return to that issue.
In 1989, on average, the cost of funerals increased by 28 per cent. more than inflation and there was some harsh criticism, some people believed quite rightly, of the industry's performance. In fairness to all the organisations connected with the industry, I should say that such increases above the rate of inflation have not continued, although, in my view, funerals are generally overpriced.
I decided that if I intended to comment on or to criticise the industry, I had to carry out an inside investigation, which I did with the help of several researchers. I investigated the average cost of a manufacturer's coffin throughout the country compared with the amount charged by the funeral companies.
In the meantime, as there had been scathing criticism of the industry, I introduced the Funeral Industry Bill, a simple Bill which called for the establishment of a compulsory code of practice for funeral directors and the funeral industry. The Bill called for written estimates, for full price lists, for the code of practice to be prominently displayed and for details to be given of the cost of the 791 coffin and its fittings, the hearse, funeral cars, care and removal of the body, embalming costs and administrative charges.
Funeral directors are now developing public relations of a highly sophisticated standard. People now pay for their death on hire purchase and for pre-arranged funerals. Lovely velvet phrases such as "Dignity in Destiny" are being trotted out, and I shall deal with that issue.
My Bill sought to bring the questions that were being asked about the industry to the fore and to subject the abuses and practices within the industry to public scrutiny. That is also what I seek to do today.
In my Adjournment debate in 1989, I gave some simple illustrations. At Christmas of that year, I took the liberty of spending two days "on the tools" at a coffin manufacturers. I did an "A to Z" follow-through and I spent a couple of days working as an engineer at a factory that supplies coffins to some of the large companies that I shall describe later. I looked at the prices of coffins—invoiced, costed and supplied, giving the firm's name—which was very good of the coffin manufacturer. The problems that I mentioned earlier about profit margins were evident. I shall give the 1989 figures, but update them with those of other manufacturers to be fair to the industry.
I have some funeral bills with me—those that I mentioned earlier—and it appears that the average cost of the two main coffins that were being produced for cremation at that time were £18 for the cheapest and £27.50 for the dearest, depending on the grade. All the coffins were given names of splendour, such as "Queensbury" or "Richmond"—velvet titles are again attached to them. I was able to trace coffins through from the manufacturers to funeral companies involved, including those used by the constituents that I previously mentioned. I found that the average price charged by the funeral director for a £19.50 coffin was £154. I have the bills here.
Then I looked into the cost of dearer types of coffin. They range from the simple basic models that I have described to those made of solid oak. The average margin between the cost of production and supply, and the final price charged, was between 400 and 500 per cent. In some instances it was 1,000 and in one case it was 1,100 per cent. The profit margins are identifiable.
The more that I research the industry and the more letters that I receive, the more convinced I become that there can be only two areas where profits are down—the price of the coffin and the professional charges.
I decided that I might as well research the matter properly, and I went to work in two funeral parlours. I showed great respect, and I did a sort of apprenticeship by trying out embalming for about four hours—although not on a real body—which was quite interesting. These are the facts of life. It is "feet on the ground" not feet in the ground.
I also assembled coffins, putting on the handles and the nameplates and, as an ex-engineer, I used time and motion studies to prove how long it took and how it was done, whether by high technology or manually, using a screwdriver or a hammer.
Then I decided to look into professional charges. I was investigating two small independent undertakers and I 792 asked what the professional charges embraced. Embalming was a separate charge and was an extra £25 or in some cases £40. I asked the companies to give me a professional charge that was generous to themselves and was not the minimum price. They told me that on average they charged for 10 hours' worth of professional charges, which would give them reasonable profit margins.
However, one of the takeover companies has a standard professional charge based on 40 hours per funeral, which is roughly £350, although it depends on the region, as there are large regional differences in the prices of funerals. During debates on the radio and on television, the companies stuck to that figure, and they have done so again during the past few days. We have substantiated that matter within the industry.
I shall read some of the letters that I have had from funeral directors with 30 and 40 years' experience, who have had doubts and they relate evidence that I suggest is conclusive that such professional charges are a direct rip-off, as are coffin charges.
Disbursements are a separate matter and include the vicar's charges, church services, and gratuities. No one is arguing about the cost of those.
Let me quote the up-to-date figures. I have received strictly confidential information giving the names of 19 firms that operate throughout the country under one name, UKF. It is not a large company, but it has taken over 19 firms. I shall mention larger firms later. I am referring to 1990 prices. I have ignored the 16 per cent. increase in the price of coffins on 1 September 1990. A Chester coffin, supplied for £33.12, costs £170 to £200. The Norwich coffin, supplied for £60, costs £330 to £350.
The firms point out, however, that the accessories must not be forgotten. Metal handles cost £8.54 per set, but a charge of £42 is made for them. Nameplates can be supplied in plastic or metal. Plastic nameplates cost 69p. If all those costs are added up, they amount to only a reasonable £55, but the funeral charge totals £615. I asked the firms involved, and they did not try to hide the charges. One United Kingdom company has a published turnover of £2.5 million and profits of £500,000. It does not deny those figures.
§ Mr. Ashton
I understand that the latest figures supplied by Hodgson Holdings, the biggest entrepreneur in the business, show that its predicted profit will be £5.3million on a turnover of £30 million. Has my hon. Friend had any dealings with that firm?
§ Mr. Cunliffe
I have had many dealings with it, especially with its previous chief executive. After a brilliant entrepreneurial career, unfortunately he has recently left the company. Far be it from me to speculate about the reasons; I do not know. However, I admire the entrepreneurial skill with which the company that my hon. Friend mentioned was built up. Its turnover increased from £14,000 to about £78 million.
The industry is contracting. The reason is that people are living longer. During the next few years, the annual number of people who die—at present 650,000—will come down to about 600,000. That leads to other problems, including the money that will have to be found for the care of the elderly. As a compassionate nation, however, we ought to be prepared to meet the challenge.
According to the Royal College of Nursing, the startling fact is that in 1985 there were 2,416,000 women 793 over the age of 75 and that by the year 2001, which is not that far away, that number will have increased to 2,802,560—a 16 per cent. increase. In 1985, there were 525,000 women over the age of 85. By the year 2001, there will be 840,000, a staggering increase of 60 per cent.
In 1985, there were 1,202,000 men over the age of 75. By the year 2001, that figure will have increased to 1,598,660—a 33 per cent. increase. In 1985, there were 158,000 men over the age of 85. By 2001, that figure will have increased to 321,900—a 110 per cent. increase. One does not need to be a great mathematician to realise, having studied those figures, that the industry is contracting. Most of us welcome that fact.
I have received many letters about funeral company takeovers. There has been a tremendous reduction in the number of independent funeral directors. In the past, one did not shop around for the best price funerals. Automatically one went to the local undertaker who had been used by the family for generations. Hundreds of them have disappeared in recent years. At a private meeting with the chief executive of Hodgson Holdings, Howard Hodgson, I asked him, "How on earth can you reconcile the increased demand for your services with your masquerade of using the name of local family undertakers? The many letters that I have received prove it."
§ Mr. Ashton
Is not it a fact that Mr. Hodgson has said that, when he buys companies, he buys their good will, not their assets? The good will is the name over the shop, and that is what he pays for. My hon. Friend is right about that being a form of deception about the service required.
§ Mr. Cunliffe
My hon. Friend is right. Good will is attached to the name of small family undertakers. I discussed the problem with Mr. Hodgson. These large companies are employing high-profile publicity methods. Actors and acresses are used, including Sir Harry Secombe, who sings on some of the tapes. Incidentally, that firm is no longer called Hodgson Holdings but PHK International, and it has a French chairman. It has cornered 15 to 16 per cent. of the market. Another company has cornered 25 per cent. of the 650,000 deaths each year. Just a handful of companies control the market.
I was impressed by Mr. Hodgson, a young entrepreneur. When I spoke for the first time in the House in a debate on industry—this was in 1979—the Secretary of State for Trade and Industry told me that the Government's policies would lead to a galaxy of entrepreneurs, the like of which had never before been seen in this country. I do not think that at that time we envisaged that the growth industry would be the funeral industry. However, this young man moved into it and did a remarkable job by turning Hodgson Holdings into a highly professional company which, as I have already said, has now been taken over.
Having absorbed hundreds of local undertakers, the companies have created a problem. I illustrate that point with a letter that I received:From the Manchester Evening News … I see that you are to raise a question in the House with regard to big companies making "take-overs" in the funeral business and to the large price increases which stem from this. I applaud you in this endeavour because I have personally experienced unease in these methods. I have been engaged in the funeral business on my own account for the last 36 years at least and have attained our professional qualifications of Dip. F.D. and am a member of the BIFD"—not the National Association of Funeral Directors— 794In 1974 I formed by own limited company in my own name but as I neared retirement age, I decided to sell my share capital"—to a firm that I shall not name. Again, it was a local firm hiding under the aegis of a big company, which is Hodgson Holdings.
The letter continues:However in 1986 I was to discover thatthe companyhad been taken over by Hodgsons Holdings of Birmingham and that my consultancy was included but only as far as the Employees Protection Act allowed. Very quickly after take-over I came to realise that I simply could not accept their methods or standards … I refused to sign my acceptance of the terms of contract being offered to me and resigned the consultancy as soon as was possible.I find it hard to accept that having sold a limited company a 2nd time buyer can trade in my name"—which illustrates the point that I am trying to make—but not continue in the style of limited company … I feel most strongly that the professionalism that can be reasonably expected is now being rapidly eroded"—the professionalism and standards of our funeral directors—I also consider that there is a further danger in that the professional bodies which were formed to uphold the principles".I put that issue to the National Association of Funeral Directors. The letter continues that to a great extent that body is beingmembered and officered by servants of these same big companies.I have had a great deal of experience in such matters. Just recently, I have dealt with some television programmes and people who were supposed to represent the associations but who, at the end of the day, were playing the company men. That is understandable. Hundreds of funeral directors have been taken over, but what happens then? They face conflicting loyalties—the companies or their profession. The honourable conduct of their profession is challenged by profit motives and margins. People are subject to pressures about their beliefs and qualifications for this honourable profession.
I challenge the NAFD: "Are you company men first and directors of your association second?" That is the issue with which we must deal. On every programme on which I have appeared during the past three or four years, people have said that they represented the NAFD but basically, they put the companies' view. They spoke for about 40 hours about the price of funerals. I am trying to make the profession—the industry—first class and honourable, to dignify it and to give it status in the form of registration. At the moment, anyone can be a funeral director.
The NAFD must make up its mind. Why does it oppose compulsory codes of conduct, but want a compulsory form of registration for funeral directors, for companies and for training? It cannot have it both ways, and that is the problem. The more independent funeral directors that are taken over by the big battalions, the greater will be the conflict of loyalties. That is one of the problems that must be endured. Unless we do something, the problem will accelerate and the industry will be treated with contempt.
§ Mr. Bowis
I should like to clarify—for my sake and perhaps for that of the House—the point that the hon. Member for Leigh (Mr. Cunliffe) is making. He spoke about trying to maintain professionalism and good practice when small companies are taken over. I entirely agree, but a few minutes ago—when he quoted the letter—he implied that, when a small company continued under 795 its old name despite a change of ownership, something misleading—if not dishonest—occurred. If that is what he is saying, there is a principle that crosses professions, including bankers. For example, there is no longer a Mr. Coutts at Coutts and Co. and the same is true of soap powders, bookshops and Fox's glacier mints. Fox's was taken over by Rowntree, which was taken over by Mackintosh. The change of name is not important, but, as the hon. Gentleman is rightly saying now, it is important that the standard of service continues irrespective of ownership.
§ Mr. Cunliffe
I shall reply to that question by repeating what I said to Howard Hodgson: "If you want a Rolls-Royce or Marks and Spencer image, why do you still retain the identity of the village undertaker? If you seek to raise the standards of professionalism and commercialism, why do you do that?" There is no answer. With respect, one would not suggest that, because bookmakers have lifted themselves up, we should all make lords of bookmakers.
There is no reason for companies to be so secretive. The public will understand and they would prefer an honest description of the undertaking with which they enter into a contract to the faceless men in boardrooms—not just in this country. I shall speak later about some foreign companies that are buying their way into our industry.
I received a second letter from an established funeral director, in which he said that he was pleased with my stance on the funeral profession on a television programme. He wrote:I was a Funeral Director for 30 years until March 1988 and very proud of my calling but not any longer. My company was purchased by Hodgson Holding's plc in March 1988. This, I strongly add, was not with my blessing but back stabbing in the Board Room allowed this.That is as good a way to put it as any other. The letter continues:In 1987 and 1988 I envisaged that if the trend of takeovers was to carry on the Funeral Profession would finish up being owned by large multiple monopolies and the bereaved families when they were at their lowest ebb could only finish up getting not as good personal service and higher charges. The matter was reported to the Monopolies and Fair Trading Commissions by myselfbut nothing came of it.
The writer goes on to say that he worked in the private trade. He says that he is not of my political complexion or disposition. He states that there is massive exploitation of employees, but, because of his contractual restrictions, he cannot say much more. What he does say is too much because of the restrictions placed on him. He wrote:I wish I could say more but … free speech is not allowed.I would not go as far as that, but he states that it is far better that he does not write in detail about the companies under his control that were taken from him.
He submitted pages from the Merseyside telephone directory, which have been ticked to show every company that has been taken over. There are 18 companies in that region. About 14,000 funerals a year are carried out in Manchester and Liverpool. The service is fairly typical, although it is cheaper than in some other regions. The companies bear witness to the points about which we have been talking.
796 Municipalisation is another relevant factor. What do authorities seek in providing a funeral service? The first intention is to provide a reasonably costed and dignified funeral service. A quotation is provided containing the full cost, including, importantly, disbursements prior to the funeral. Most companies separate the two costs. Funeral directors cannot negotiate disbursements because they are fixed. That is a fair comment. The service has to be a full service with the basic trimmings and with no corners cut. Everything must be managed with dignity and the service should be indistinguishable from any other funeral service. The funeral service must always benefit the residents within the local authority area, in terms of the service itself and in terms of a possible increase in the number of cremations carried out in council crematoria. Are the criteria met?
I advised two authorities on the municipal provision of funeral services. The services that we negotiated are described as follows:I feel that without a doubt a 'reasonably priced, dignified' funeral has been provided and all the costs are known before a funeral takes place, thus providing some protection for consumers when at their most vulnerable. Criteria two, I feel also has been met in that a full service is provided to a very high specification".I have compared the service with that provided by private suppliers, from the manufacture of coffins, through all the elements to the funeral service itself. All that has been thoroughly examined. The municipal services are equally good. No problems are attached and there is more direct control even than that of a funeral director in a private company.
The costs are well known. We have provided protection for the consumer and the services have been personally vetted on a random basis. The service is not distinguishable in any shape or form from other funerals. To date, there has been no adverse comment. I put that point to the National Association of Funeral Directors which mainly defends the large companies. How can it reconcile the fact that some of the large companies are now putting in tenders to provide municipal funeral services, with all the elements of the simple basic funeral about which I have talked, at roughly £350 to £400? They are the companies that, when not providing the municipal funeral service, charge about £800 to £900. They are the same firms. Are they short of work, or are they undercutting because there is a bit of a recession? What is happening? For many years, I served on the Bolton metropolitan authority. It provides a funeral service at £375, with disbursements included. Wigan provides such a service, with qualified people from the National Association of Funeral Directors.
There is a need to examine the matter in some detail —and I should prefer a Select Committee to do that—to lift the lid off the industry in every facet and to give evidence on it. If the NAFD or the big boys in the association gave open evidence, it would be subject to scrutiny by the House and by the public. What has the association got to lose by that?
I want to quote the classic example of Hodgson Holdings. I must be fair and say that it is not the only big battalion in the industry. There are Greggs, Chosen Heritage and Quartz, among others. Two of those companies comprise 35 to 40 per cent. of the industry now. The more mergers that take place between the companies, the bigger the potential for monopoly takeovers which will create an even worse position in terms of artificial prices.
797 I do not accuse the companies of that at this stage, but I refer to the words of Howard Hodgson. He said that Hodgson Holdings now had 11 per cent. of the industry and was moving into the range of 15 per cent. He hoped that it would climb to 25 per cent. I do not believe that the aim of 25 per cent. being controlled by one company and 25 per cent. by another will be achieved, but that has been said clearly by the heads of the companies that I have mentioned. I make no comment on what happened to the person about whom I have spoken, because he has since left.
The aims of the Bolton municipal service are clear:The scheme provides a dignified funeral service at a reasonable cost … The collection of the deceased from within the borough or within a 10 mile radius of the borough boundary.That is fair comment. We should not like subsidies to other authorities which could be used to subsidise other features. That service also includesEmbalming., dressing and a place at the funeral undertakers' Chapel of Rest. Free conveyance to the Chapel of Rest for relatives with transport difficulties. All arrangements at the crematorium or cemetery. A hearse and following limousine. A second hearse as floral car. The Funeral Service. An oak veneer coffin".On the figures that I have supplied, an oak veneer coffin alone can cost £590 from private suppliers. The service also includes fees charged by the doctor. One company charges an average of £42.50, as my hon. Friend the Member for Bassetlaw (Mr. Ashton) knows. The service also includes a clergyman and the crematorium. The list of services continues:Transport of deceased to church or chapel prior to disposal.The figure for all that last year was £366.
The National Association of Funeral Directors believed that it was unfairly criticised by the Office of Fair Trading. It has replied on many points, and I acclaim the fact that it has drawn up a substantial, important and dignified code of conduct. Hodgson Holdings wrote to me that it agreed with the Bill that I proposed on a code of conduct. The National Association of Funeral Directors said that it agreed, as did the big companies and the trade unions. Yet there is some opposition to the compulsory registration of the code of practice. I do not understand the logic of that.
We must consider how other elements in the industry react to any form of criticism. Their reaction is understandable. Although we as politicians are usually calm and meek, we become all prickles, like hedgehogs, when we are criticised. I understand that.
I am convinced, and I want the Department of Trade and Industry to understand, that there is cause for concern and a need for a genuine examination of the industry. Certain matters have still not been resolved. I hope that the Minister will give me some assurances and possibly undertakings, as the previous Under-Secretary of State for Industry and Consumer Affairs did when I last debated the matter. The previous Minister promised that there would be immediate and urgent talks with the industry and the National Association of Funeral Directors. I hope that the Minister will have something positive to offer at the end of this debate to me and to other hon. Members who may speak in the debate.
I return to the report. It says that the code can have value only if it is demonstrably taken seriously and complied with. It also says: 798The Office is disturbed and disappointed by the survey's findings that, to a significant extent, the key requirements of the code—those relating to price lists, written estimates and the basic simple funeral—are not being observed.I venture to say that there has been a vast improvement, and I commend those in the industry who brought it about. It was brought about mainly by the association through the high standards in its code of practice. I pay fair tribute to that improvement, and rightly so. However, there is room for further improvement. The registration, licensing and regulation of funeral directors and companies will help to make them far more professional and raise the standards and values that we attach to the industry. That is what the Office of Fair Trading sought to do and what some of us seek to do.
The report says:Compliance with the obligation to explain the types of funeral on offer is somewhat better,"—we concede that—but still not as good as the Office would like.… Moreover, the performance of NAFD members in most of these respects is not conspicuously better that that of non-members … some funeral directors do not believe that the principles which the Office, and the Price Commission before it, have sought to establish in the industry are relevant to the way in which they do business.That is regrettable. I cannot understand a profession that is reluctant to lift its standards and values. However, the report said:the Office would not want to see the code dismissed as worthless. Implementation of the recommendations aimed at improving the code ought to encourage efforts to secure greater compliance. More generally, therefore, the Office's final recommendation is that the NAFD should indicate, within six months of this report, what specific steps it proposes to take in order to achieve greater compliance with the code.I am glad to say that the NAFD has made tremendous progress. I hope that the Minister will dot the i's and cross the t's. I applaud the association and acclaim its success. Nothing that we say in this debate in any sense invalidates the fairly good reputation of 95 per cent. of our funeral directors. I do not seek, and nor would the House seek, to distort the image that they have successfully built up.
My motion asks the Minister whether more formal intervention is needed. The report said:More formal intervention may, however, be needed if the efforts of the NAFD and of individual funeral directors do not lead to visible improvements in the operation of this market. In that event, the Office would want to review the options under existing or new legislation.That was said not by me but by the OFT, which the House has set up to defend consumer interests. This is the will of Parliament. The report said that in the event of a lack of visible improvements, it might have to consider referring the industry to the Monopolies and Mergers Commission. We are moving rapidly in that direction. The only thing that will stop it is a decline in the industry due to a contraction of the number of funerals. However, the House should remember that, if the big battalions remain, the number of funerals is smaller and large companies increase their share of the market, they will creep nearer and nearer the notorious 25 per cent. of the market, when the MMC has to say halt. As some people will remember, that happened to one great funeral organisation in the United Kingdom.
I am sorry that the National Association of Funeral Directors treated the making of an order as a threat. It 799 wrote to me on the subject. I am not exactly accountable to the Director General of Fair Trading and nor is he to us. The OFT report said:Another more specific and immediate possibility might be the making of a price marking order under section 4 of the Prices Act 1974 as amended. Such an order can be made to require charges for specific services to be indicated and may stipulate the manner in which any charge should be indicated.That is a serious step to take.
The previous president of the association wrote to me last year on the matter. The association produced a new code in May 1990, which I commend to the House, entitled "The Role of the Funeral Director". It is a splendid document. It could do with having the i's dotted and the t's crossed—not by compulsion but voluntarily—but it is a step in the right direction. Mr. John Lodge, the national president of the NAFD wrote:Dear Mr. Cunliffe,I am grateful for the interest and support that we have had from you and your fellow MPs following the publication of our report 'The Role of the Funeral Director' which I sent to you in February.Parliamentary pressure"—that is us to them, and rightly so—has been considerable and the Director General of Fair Trading has felt obliged to publish a long and detailed defence on the OFT's handling of its report on funerals.The OFT has been put on the defensive.I am sorry to tell you, however, that it looks as though the OFT is trying to penalise our Association for daring to criticise its report by seeking a Price Marking Order against our members. We have just negotiated our new Code of Practice with the OFT and the possibility of a Price Marking Order has only ever been mentioned as a means of ensuring cooperative negotiations. We cooperated fully as we have always done. So why is the OFT applying for an Order now? Surely we are entitled to write to you and our other MPs without risking sanctions for doing so?I take the point. The association has the right to make representations to us. Mr. Lodge continues:I enclose a copy of the new Code of Practice which is being published this week. Its predecessor was the only registered Code to have run its full ten years without need of review.According to the Office of Fair Trading, it was not necessary to review the code when 75 per cent. of it was not honoured until inquiries were made and estimates sought for the survey.
The letter continues:We have always cooperated with Government agencies and this new Code is a product of such cooperation. In return we have been the victim of a damaging and unfairly compiled report. The Director General's long defence of his Office's conduct still leaves some major questions unanswered. Three of the more important areWhy was the publication of the report not delayed until the survey data on which it was based was available? Why were damaging allegations made on the basis of uncorroborated evidence? Why did the OFT issue such a sensational press release?Far be it from me at this stage to comment on that. I assume that those remarks have been put in writing to the Director-General of Fair Trading. I am confident that he will have replied, as Government agencies usually do, in technical, civil service gobbledegook, plus a few facts. I applaud that.
Recently, a journalist wrote about the regional disparities in the price of funerals, and mentioned a recent survey carried out by an independent body, the Odd 800 Fellows Manchester Unity friendly society. The survey was conducted in February, so is up to date. The newspaper report states:Burial costs in the North West are among the cheapest in the country.Local funeral directors are charging an average of £864 for a burial complete with extras such as cars, plot fees, and obituaries.That compares with bills of up to £990 in towns in the South West.I do not know where the difference lies or how the figures are broken down. Why are there such vast regional disparities when the big firms in the industry and independent ones that are trying to establish their reputation are competing on price?
The report continues:Cremation costs are also lower in the region-the average all-in cost being £656.The survey points out that, although the average basic funeral cost is £548, the cost including cremation is £574. The survey returns to the problem of funeral bills segregating disbursements from the cost of the funeral and professional charges. The report states:basic costs bear 'little relation' to the final bill to which disbursements have to be added—£345 in the case of burials and £152 for cremations.As a plug, it continued:Leigh MP Lawrence Cunliffe, who has campaigned for years to cut the cost of funerals, welcomed the … survey.Mr. Cunliffe said funeral directors in the North West had been forced to be more competitive as a result of his recent campaign.That is a trivial point. I put it fairly and squarely to the House that the upturns and downturns in the industry and the price disparities are irreconcilable. Something must be wrong. We must act to restore some form of public confidence in the industry.
Great, distinguished public relations campaigns are taking place. It is now assumed, with some good reason, that the prices of funerals which are escalating more rapidly in some parts than in others, are a cause of public concern and need public scrutiny. There is something in that.
It now seems that hire purchase systems are being introduced into the funeral industry. Large companies are involved in public relations exercises. There is even a pack for Westminster people—for us—to pay for our funerals well in advance of our demise. The splendidly packaged HP system lists questions which may occur, such as why one's family should be faced with substantial amounts of funeral debts and bills; and suggests making provision by paying on a regular basis into a "Dignity in Destiny" scheme. The glossy package is entitled "Dignity in Destiny" and provides:A Pre-arranged Funeral Plan with Price and Service Guarantee".The slow but sure and methodical Americanisation of our industry is conditioning us to believe that we have a responsibility not to burden our relatives even in death.
The glossy brochure incorporates "The Westminster Plan" and "The Windsor Plan". What do they ensure? They offer a guaranteed price for the funeral of one's choice. Relatives will not be faced with additional, unexpected bills, no matter how high costs rise. They guarantee the quality of the service—something which we should all like to establish once and for all. Payments can be made in a single lump sum or can be spread in instalments. They guarantee to observe one's wishes regarding funeral arrangements. They offer free advice and trained counsellors. One can join a plan at any age without 801 a medical examination—someone is on to a good wicket there. I am not suggesting that one would want to take advantage of that, but it has some attraction.
§ Mr. Ashton
Is my hon. Friend aware that newspapers and Age Concern have analysed some of those schemes which have been found to pay as little as 1 per cent. interest on the money invested which is repaid at the time of the funeral?
§ Mr. Cunliffe
I have sought some financial advice on this, although I am not a steward of the industry. One funeral director of a large company, who has a prominent position in the region, wrote to me off the record and asked me not to repeat that people would do far better by putting their money into a building society account or a long-term national savings certificate.
§ Mr. Burns
Can the hon. Gentleman elaborate a little on what happens if an individual tragically dies before completing all the instalments? Is there a built-in insurance policy within the instalments paid to take account of that, or would the relatives of the deceased face a problem if they did not complete the instalments?
§ Mr. Cunliffe
There is a partial commitment to honour a high percentage of the funeral costs, but there is always, as in hire purchase agreements, a clause at the bottom of the page. There are about five schemes. Some firms say that the costs are not fully covered under the insurance, and there is some controversy about whether a company should offer 100 per cent. protection.
Such schemes condition people's minds—politicians can be accused of that. It is a bit like the conflicting loyalty between the funeral director and his company. When I was telling my hon. Friend the Member for Bolsover (Mr. Skinner) about the debate, he said, "It's like being a shop steward. You prove that you are a first-class guy and the next thing the company wants to make you a manager and you change sides." I said that that happens to politicians, too. He said, "That's my mate Dr. Death. He ought to be the Minister of Funerals as he has changed parties twice and perhaps will a third time." I said that that was rather uncharitable. Most politicians have scruples about their party, and we all have the right, as does a funeral director, to change.
Other hon. Members wish to contribute to this serious and possibly controversial debate. I shall therefore conclude by saying that I agree with some of the points made by the National Association of Funeral Directors. It has met at least part of the challenge. I shall do it the honour of referring to its wonderful booklet in which it speaks of the emotional support and the expert advice that it gives in practical services to the industry. It has no doubt tried to gild the lily by its recommendations and standards, but it has met the challenge voluntarily.
The debate involves a sensitive subject and it is important to end with a quote from William Ewart Gladstone.
§ Mr. Cunliffe
The hon. Gentleman will understand the relationship between Gladstone and the new Minister for Funerals should that right hon. Gentleman enter the Conservative Cabinet. He has been in every party, so what is wrong with having a Liberal background? Gladstone said: 802Show me the manner in which a nation cares for its dead and I will measure with mathematical exactness the tender sympathies of its people, their respect for the law of the land and their loyalty to high ideals.I support that. The National Association of Funeral Directors is the great baron of the funeral industry. This country has always treated its deceased and bereaved with dignity. They have the right to our compassion and understanding at times of great sorrow.
Let us make an honest endeavour to introduce the standards and values that I have exhorted the industry to adopt. It is not imperative but, if necessary, the Government should put the industry on a regulated footing and demand the highest standards and values to secure the comfort that a great nation can offer when mourning its people.
§ Mr. Roger Knapman (Stroud)
The hon. Member for Leigh (Mr. Cunliffe) has spoken for an hour and twenty minutes criticising the National Association of Funeral Directors.
§ Dr. Hampson
With respect, my hon. Friend is wrong. The hon. Gentleman went on that long to stop me making a pertinent and poignant attack on the incompetence, inefficiencies, mismanagement and wastefulness of Labour councils. He went on speaking because the Labour party does not want the next motion, which I have tabled, to be debated.
§ Mr. Knapman
My hon. Friend made that point well. The hon. Member for Leigh has decided views on the funeral industry, but what stuck in the craw was when the magic word "profit" came into the argument. I shall not detain the House for such a long time.
I have an interest in this debate, in that the coroner of Westminster is a namesake of mine, Dr. Paul Knapman. I am not sure whether he is a relative, but when I bought my son and myself two darkish coats—my hon. Friend the Member for Leeds, North-West (Dr. Hampson) has his desk next to mine—the secretaries in Old Palace yard called us the undertakers.
In Victorian times, sex was taboo—piano legs were covered, and so on—but death was regularly discussed, and it was not unusual for a family with five, six or eight children to expect to lose one or two of them. People were used to speaking about death. Now the roles seem to be reversed. Every publication seems obsessed with sex, but there is a taboo about death. The hon. Member for Leigh does the House a service by introducing this motion.
However, I am afraid that I must qualify those congratulations. I have read the motion and I like the first line and a bit:To call attention to the need for registration of and a code of conduct for the funeral industry".The next 14 lines refer to setting up councils, giving powers, and quangos. That can achieve only one thing —to strangle the industry concerned, if that is possible with the funeral industry, in a mass of red tape.
The hon. Gentleman has largely followed, but also elaborated on, the speech that he made in an Adjournment debate on 6 February 1989.
§ Mr. Knapman
The hon. Gentleman says that it was an excellent speech. That is why we have now heard it twice. I intend to read a passage from the reply of the then Parliamentary Under-Secretary of State for Industry and Consumer Affairs, my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), so I fear that some people may shortly be bored to death. My hon. Friend said:I would like to remind the House of the context of the OFT report. The Director General of Fair Trading has a duty under the Fair Trading Act 1973 to encourage associations to adopt codes of practice providing a standard which promotes and safeguards the interests of consumers. There are currently 26 such codes endorsed by the director general and they form a valuable part of the consumer protection framework. The Government are convinced that effective self-regulation is better than regulation.I hope that the Government's position has not changed from that day to this and that the present Minister, my hon. Friend the member for Gainsborough and Horncastle (Mr. Leigh) will make his usual high-calibre contribution to the debate and largely repeat those words.
For much of the time, the hon. Member for Leigh discussed costs. Again, my hon. Friend the Minister answered him briefly but adequately in the course of the Adjournment debate and said:the funeral director has little control over the cost of disbursements included in his bill, funeral directors' own costs such as staff and equipment may have risen above the costs of inflation and the two OPCS surveys are not directly comparable."—those are the two to which the hon. Gentleman referred—Indeed, I did not read the OFT report as necessarily suggesting that funeral directors are overcharging".—[Official Report, 6 February 1989; Vol. 146, c. 779.]
§ Mr. Griffiths
The hon. Gentleman has quoted a speech which, like me, he seems to know well. I am puzzled especially by the question of who controls the salaries and other staff costs if they are not controlled by the funeral directors. Ministers constantly tell us that businesses are responsible for their own staffing costs, but I suspect that that is a red herring.
§ Mr. Knapman
The hon. Gentleman does not seem to understand his hon. Friend's speech. He criticises the level of charges. I have never before heard an Opposition Member say that staff do not earn enough, so I am grateful for the hon. Gentleman's conversion. He criticised the charges that those companies make. As the hon. Member for Leigh knows, because he has studied the matter in great depth, charges have gone up by 28 per cent. above the rate of inflation in the past 15 years——
§ Mr. Knapman
The hon. Gentleman says 12 years, but many industries must have a worse record than that.
§ Dr. Hampson
Being present by force majeure to try to introduce a motion that I am prevented from introducing enables me to reflect on some of the ideas that have been put before the House. Before I went to university I was brought up in the north-west, where everyone used the Co-operative funeral service. It has not been properly explained why, in this world which the Opposition regard as such a rip-off, the Co-operative Society could not make enough profits and has backed out of the funeral industry. The hon. Member for Leigh seemed to imply that he wanted to return to the highly regulated world that socialists always want, in which local authorities are 804 allowed to run funeral services. However, that would only compound the problem that I was trying to identify in my motion—the wastefulness and misuse of local authority power——
§ Mr. Ashton
On a point of order, Mr. Deputy Speaker. The Member for Leeds, North-West (Dr. Hampson) has just walked into the Chamber, having been absent for long periods of the debate. He has tabled a second motion which we are unlikely to reach, and is deliberately trying to introduce the subject of that motion into this debate. Is that not contempt of the House?
§ Dr. Hampson
I apologise for introducing extraneous matters, but they were perfectly relevant.
The hon. Member for Leigh said that he regretted that local authorities did not have the powers to undertake funeral services. It seemed perfectly relevant, therefore, to say that it would be a wasteful exercise on the part of local authorities. We all know that the Opposition wish to prevent me from introducing my motion.
§ Mr. Knapman
I am grateful for your protection, Mr. Deputy Speaker. My hon. Friend the Member for Leeds, North-West has every right to be absent from the Chamber because he always ensures that his speeches—in this case, a speech that should have been heard by the House—are full of interest and carefully researched. Therefore, I am not surprised that he was unable to be present for the whole of this debate.
With his usual understanding of the subject, my hon. Friend the Member for Leeds, North-West asked the same question that I asked the hon. Member for Leigh an hour and 10 minutes ago: if the funeral industry is such a licence to print money, why did the Co-operative Wholesale Society sell its interest in it?
§ Mr. Knapman
I was about to give way to the hon. Member for Leigh, who introduced the subject into the debate.
§ Mr. Cunliffe
The explanation is simple and well known to the House. The Co-op owned more than the Monopolies and Mergers Commission criteria. It had 25 per cent. of the industry and was made to get rid of the House of Fraser, which Hodgson Holdings PHK—Kenyan Securities—bought immediately afterwards. It then added to that to create another monopoly, so it is swings and roundabouts—robbing Peter to pay Paul.
§ Mr. Knapman
I am—not unusually—slightly confused. Surely the Co-operative Wholesale Society did not have to sell its entire interest in the industry. Is the hon. 805 Gentleman saying that it did? He spent an hour and 20 minutes saying how wonderfully profitable the funeral industry is.
§ Mr. Cunliffe
I am trying to give the facts. I said that the Co-operative Wholesale Society was allowed to retain 25 per cent. of the industry. In this case, the surplus was the House of Fraser, which was immediately snapped up by another big company in the industry, the name of which I have already given.
§ Mr. Knapman
If the Co-operative Wholesale Society was allowed to keep 25 per cent., I presume that the whole thrust of the hon. Gentleman's argument was against that society.
§ Mr. Foulkes
I can confirm that a Monopolies and Mergers Commission report obliged the CWS to divest itself of that power. Had the hon. Gentleman speeded up his speech and not allowed the Member for Leeds, North-West (Dr. Hampson) to intervene, I might have had an opportunity to explain, as a Co-op Member, the position of the Co-op funeral services.
§ Mr. Knapman
I hope that the hon. Gentleman will support the Monopolies and Mergers Commission, which suggested that the Co-operative Wholesale Society should not have more than 25 per cent. of that market.
In the course of the Adjournment debate on 6 February 1989, my hon. Friend the then Minister said:The fact that during the past few years a number of small independent funeral directors' firms have been taken over—the hon. Gentleman stressed that development—is perhaps an indication that profit margins in some parts of the industry are low.That is a far cry from the hon. Gentleman's argument. My hon. Friend the Minister concluded by saying:It is going too far to say that the market is in any way overwhelmed or dominated by that small number of companies. I am confident that the Director General of Fair Trading will remain alert to what is happening in the market and be ready to take action if and when the need arises."—[Official Report, 6 February 1989; Vol. 146, c. 780.]The Director General of Fair Trading already has those powers. Although I like the first line and a half or the motion, I do not think much of the quangos suggested in the remainder. The Director General of Fair Trading has discretionary powers to refer abuses of monopoly and anti-competitive practices to the Monopolies and Mergers Commission, and that has happened.
It may be slightly ironic that the Commission investigated the Co-operative Wholesale Society's acquisition of the Scottish funeral businesses of House of Fraser plc in 1987 but, in view of what has been said, I had better not rake that up again.
The hon. Gentleman now has not one—that is the number of cases suggested in the 1989 Adjournment debate—but two causes of complaint. Some 90,000 people live in my constituency and I reckon that they will live for more than 70 years. I must admit that I sometimes speculate idly on whether the increased lifespan is because the national health service is so much more efficient than it used to be. The hon. Gentleman seems not to want to pay the Government that compliment—he apparently thinks that the increased lifespan is because people eat muesli for breakfast—but the average lifespan is certainly going up considerably.
Nevertheless, of that 90,000, every year some 1.200 families suffer bereavement and, if my arithmetic is 806 correct, in the past four years that I have represented Stroud, there have been some 5,000 deaths in my constituency. During that time, I have received no letters of complaint from those 5,000 families about the charges or activities of funeral directors. I wonder how many of my hon. Friends have received letters from their constituents complaining about that subject. It does not seem to be very much of a problem.
In 1989, the National Association of Funeral Directors published an Office of Fair Trading survey showing factors such as the amount paid compared with the expected cost of a funeral and knowledge of funeral costs. Some 75 per cent. of those questioned paid exactly what they expected to pay or less. A further 21 per cent. did not know—which I suppose means that the people did not reply.
In my postbag I receive many letters about whales, tropical forests, battery hens and nearly every other subject, but I have never received a letter about undertakers' charges. That is a credit to the industry, because funeral directors conduct their business at a time of considerable anxiety, not to say trauma, and it would be easy for them to upset customers if they did not provide a good service.
The other part of the hon. Gentleman's speech related essentially to whether there is sufficient quality of service and, if not, what should be done about it—whether we should have quangos and intervention. There have been surveys on this subject. In 1987, there was a survey of funeral arrangements. It was published in 1989, although whether before or after the Adjournment debate of the hon. Member for Leigh, I am not sure. It stated clearly that, of the 600,000-plus funerals in Britain every year, about 200 provoked complaints to trading standards officers. The survey showed that 72 per cent. were very satisfied, 25 per cent. were satisfied, 2 per cent. were neither satisfied nor dissatisfied and only 1 per cent. were dissatisfied with the industry's activities. I hope that the hon. Gentleman is aware of those statistics, as he did not mention them in his speech, although he had ample opportunity to do so. Using a massive sledgehammer to crack a nut, as the hon. Gentleman suggested, is not justified.
My right hon. Friend the Secretary of State for Employment, when he was Minister of State at the Department of the Environment, had much to do with the privatisation of the water industry. I was always struck by his comment that one should have competition where that is possible and regulation where it is not. There is still considerable competition within the industry. One accepts that where there is not fair competition there should be regulation, but that should not mean legislation—there is already a considerable amount of legislation.
The hon. Member for Leigh could also have quoted from the Director General of Fair Trading, Sir Gordon Borrie. The hon. Gentleman did not say a great deal about Sir Gordon's views on the subject, but he has considerable responsibilities for it. Sir Gordon Borrie said:People do not arrange funerals often enough to acquire the background knowledge which guides them when they make other major purchases, and they may be in no state of mind to make best use of such knowledge as they have. They do not approach the task of arranging a funeral as they would an ordinary consumer transaction, comparing the prices and services on offer and taking time to come to a decision.That is perfectly fair, and I think that Opposition Members would certainly agree with it.
807 Sir Gordon Borrie said that, for those reasons, the Office of Fair Trading had supported consumer protection in the form of the code of practice of the National Association of Funeral Directors. The hon. Member for Leigh said that he was speaking voluntarily and thought that I might be speaking compulsorily. I have no interest to declare in the way that he might have been suggesting.
Sir Gordon Borrie continued:I still support the code but I am disturbed by the evidence that it is not being adequately followed.That is the crux of the matter. I am sure that the House would agree with that. Sir Gordon continued:I am calling upon the Association to make a swift and positive response to the survey's findings. Otherwise I may have to consider what other options—such as an order under the Prices Act 1974 requiring the disclosure of prices—are available.That is the important point, because I understand that, under the code of conduct, all prices should be made available, but in only 40 per cent. of cases was that proving to be the case. I think that all hon. Members will agree that that is not right and that the code of practice should be enforced. However, we surely do not need the huge, bureaucratic minefield into which the hon. Member for Leigh seeks to lead us in order to achieve that.
Who is to pay for all this? The hon. Member for Leigh had many lines about quangos and so on, but who will pay for the system? Will we hear the traditional Labour response, "Let the taxpayer pay," because nobody knows quite where the money goes? Or will it be the consumer who pays, by which I mean the executors of the deceased? If consumers are to pay, the hon. Gentleman's arrangement—despite all his talk about reducing the cost of funerals generally—will increase costs. That is the history of over-regulation throughout the ages.
I beg the House not to support the hon. Gentleman. We have an efficient and thriving industry. Certainly, if there are things wrong with it, the Office of Fair Trading must look into them, but we should not create an over-regulated, bureaucratic quagmire. Therefore, I hope that the House will reject the motion.
§ Mr. Joseph Ashton (Bassetlaw)
My hon. Friend the Member for Leigh (Mr. Cunliffe) made a magnificent, superb speech, based on his practical experience. He did the House a favour in moving the motion. He is simply asking that undertakers should give not only a menu but a menu with prices. What is wrong with that? As my hon. Friend said, the issue stems from the Prices Act 1974, which provided that pubs must display the prices of what they sell. Until 1974, they never did. If someone went into a pub, he did not know how much a pint of beer cost, and had to ask. The Labour Government said that all pubs and restaurants should display their prices on the wall. My hon. Friend is saying that the same should apply to undertakers. What is wrong with that?
People buy this product—if one may call it that—or service once or twice in their life. They are not experts and cannot shop around. There is no way that they will have time, within two or three days, to ring the undertakers or go through Yellow Pages to see how much is charged. My hon. Friend the Member for Leigh read out a list of disbursements: £60 for body removal, £25 for minister's fees, £100 for gravediggers' fees, up to £90 for the 808 cremation, £42 for medical certificates, £12 for the organist, £7 for heating the church and £100 for the flowers. Those are all included in the basic cost. People do not know the cost unless they ask, or are told after the funeral, and then the bill comes as a massive shock to poor people who are not versed in such matters.
The report of the Office of Fair Trading shows that, in Brighton, the average cost of a funeral can be £1,000, whereas in Oldham it is only £400. Why should there be such a difference for the same basic service in different parts of the country? The national average cost is £530, whereas it costs £1,000 in Brighton. I do not know what it costs in Stroud—I should like to know. It is totally wrong that people should have to pay such prices for what is basically, as my hon. Friend the Member for Leigh described it, an MFI coffin used at the crematoriums, and pay perhaps £150 or £200 for something with a factory price of about £25. Enormous profits have been made in the industry. It is time that the Office of Fair Trading not merely produced a report but acted on it.
As my hon. Friend said, for many years in this country we had a mass of small firms trading on their good will and conducting perhaps 200 funerals a year—as few as four or five a week. That was why it was cost-inefficient. Small firms had to pay a lot for hearses, cars and embalming, and for their premises, but they would do perhaps only two hours work a day. When it was virtually a cottage industry, no one could reap an adequate return unless there were many deaths.
Then in came organisations such as Hodgson Holdings and took over the small businesses. Unlike firms such as Prontaprint and Sketchley the cleaners, such organisations do not offer franchises under their own name. They simply buy the old name. Then, instead of a car being used for two hours a day, it is used all day at five or six different premises. That makes the business much more efficient and profitable, but nobody knows that all these "small firms" are governed by the same company. At least the Co-op puts its name above its shops. When people go to the Co-op they know who owns it, but they think that the other firms are the same little family firms that buried their grandfathers. They are not. Charges can go up by £100 in six months because a firm has been taken over without anyone knowing.
I am sorry that a Department of Trade and Industry Minister is to reply to this debate. The Department of Social Security should reply. It has a great deal to answer for because it has not educated pensioners or families about what to do in these circumstances. The reports that have been mentioned are usually in the quality papers such as The Daily Telegraph and The Independent. The Sunand the Daily Mirror rarely investigate such matters. As people get older and become pensioners—probably even by the time they reach 50—they would probably be happy to receive Government leaflets giving advice about what to watch for and what questions to ask.
I have with me a letter which I received today from an elderly lady in Worksop, in my constituency. Her brother, who is 79 years of age, has had a stroke. Her sister is 83. None of them has been married, and they are not insured for funeral expenses. They are so confused that they cannot ask how to claim help, despite being on income support. The lady is a widow. Her husband was a miner for 46 years and served for six years in the war. Recently, the mining industry has been offering retired people lump sums to give up their coal allowances. People were warned 809 not to accept, because doing so would put them above the limit for benefits. That woman has taken £2,000 and given up her coal for the rest of her life, thinking that she has a nice little nest egg—but now she does not qualify for the grant from the DSS because she has £2,000 in the bank. Her husband worked digging coal for 46 years for that money, and a big chunk of it will go to pay funeral expenses. The lump sum also stops people qualifying for cold weather payments from the DSS.
The Minister will talk about free trade and the market economy. He will say that he will not interfere and set up a bureaucracy. But the Labour Government simply ordered pubs to put their prices on the wall. All we need is a similar measure under the same Act saying that undertakers have to do the same and display a price list with details of charges. People would have the right to see a list of prices, and could go to two or three undertakers collecting details of prices—perhaps in the form of leaflets. That is all that my hon. Friend the Member for Leigh is asking for. It would be a great service to many hard-up pensioners if such details were given in advice leaflets at every DSS office.
The industry is being taken over by firms that should operate on a franchise basis, and a great deal of profit is being made out of innocent people in their time of grief. It is up to the Government to protect pensioners and to act on behalf of consumers as well as on behalf of the free market.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
I wish that I could follow my hon. Friend the Member for Bassetlaw (Mr. Ashton) with the same verve and eloquence. He is a Sheffield Wednesday supporter——
§ Mr. Foulkes
My hon. Friend is a director; I must not denigrate him. Clearly, he is buoyed up by the recent victory. I support Manchester United, as well as Heart of Midlothian, so I feel that a debate on funerals is appropriate for my sombre contribution.
There may be other reasons why people do not approach the hon. Member for Stroud (Mr. Knapman) with complaints. As joint chairman, with the hon. Member for Brighton, Kemptown (Mr. Bowden), of the all-party pensioners group, I know that many members of that group have raised that important issue, and that we have had meetings with the National Association of Funeral Directors. Moreover, once a funeral is over, people may feel that it is not appropriate to write a letter of complaint to a Member of Parliament. The hon. Member for Stroud should not judge by his postbag. I assure him that the all-party pensioners group has received representations, which it has taken up with the National Association of Funeral Directors.
I used to work with Age Concern Scotland before I entered the House. That organisation, too, was worried about the matter and had received a number of complaints. You, Mr. Deputy Speaker, have been in the House for a long time, and will be able to confirm that old people and the relatives of people who have died are in a vulnerable position. They cannot haggle about prices. As my hon. Friend the Member for Leigh (Mr. Cunliffe) has said, at such a difficult time people cannot negotiate for the 810 best price. They cannot necessarily exercise the same judgment as they would when making another kind of purchase.
I speak as a Co-op-sponsored Member of Parliament. I freely declare my interest, which is on the Register of Members' Interests. Anyone who cares to read the record knows about that interest. I am pleased to see my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) here tonight. He, too, is sponsored by the Co-op and I know that he will associate himself with what I say.
The Co-op is one of the biggest undertakers in the country, if not the biggest, but that statement masks the fact that it is not a monolithic organisation. There is much misunderstanding about the structure of the Co-op movement. There is local control and much sympathetic understanding of the needs of consumers, especially elderly and, in this case, bereaved people.
About 30 of the 80 local Co-operative societies in the United Kingdom provide funeral services. The biggest provider is the CWS—the Co-operative Wholesale Society —which is very strong in Scotland and south Wales. It supplies funeral materials to other societies and runs coffin-making works in Manchester and Glasgow. There is also the CRS—Co-operative Retail Services—the biggest Co-operative funeral business in England. All the societies combine to offer a funeral pre-payment bond, which enables people to make provision for their funerals.
That is one example of the way in which the Co-operative movement not only sees people as customers but aims to provide them with a service. It thinks not in terms of profit but of providing a service to the members of the Co-operative movement. Similarly, the Co-operative college has helped the launch of the Bereavement Trust, which brings together social work professionals and funeral staff, who all help and counsel the bereaved.
The main worry of the Co-operative movement is the unlimited access to the profession. Cowboy operators are free to lower standards and to charge whatever prices they like. That emphasises what my hon. Friend the Member for Leigh said about the transparency of prices. The existence of cowboy operators is especially regrettable in a service in which reliability, sensitivity and integrity are expected by the public, as the families using the service may be unable or unwilling to exercise rigorous consumer choice. The Co-op therefore feels that more consumer protection is needed. The only way of achieving that is through a registration system that would allow only trained and reputable people and companies to offer this service. The industry would be represented on the registration council that the Co-op movement proposes. Rightly, there would be consumer and independent representatives.
The report of the Office of Fair Trading on the funeral industry found many causes for concern similar to those I have outlined which worry the Co-op. The OFT, with the National Association of Funeral Directors, has developed a voluntary code of conduct. Although the good faith of the association is not in doubt, many Co-op funeral departments are active members of the local NAFD branch but are worried that voluntary self-regulation will not work. The association will find it difficult to discipline or expel members who provide its subscription income. As the House would expect, many of the worst offenders—those who engage in bad practice and charge high prices —are not members of the association. Accordingly, they 811 are beyond the theoretical scope of the code. We want to give the association a fair wind, but we are sceptical about its success.
The Co-operative movement would like to see introduced a Bill—it has discussed it with my hon. Friend the Member for Leigh because of his concern—that would go much further than the NAFD code in many respects. The main difference is that the movement believes that the protection of consumers must have the backing of us all.
The Government could help reputable funeral businesses to keep down their prices by introducing the zero-rating of VAT for all funeral services. At present, most funeral costs are exempt from VAT, which means that businesses cannot reclaim the VAT that is paid on their inputs. The Government are negotiating with the European Community on the harmonisation of VAT sales in the single market, and we support the progress that has been made now that the Community has accepted the principle of zero rating for social goods such as food.
We believe that funerals should be included in the list. It is a service that has to be used by everyone eventually. It is not a purchase that can be delayed or forgone, however much we might like it to be. Funeral arrangements take place at a time of financial uncertainty, and possibly financial stringency for those who have to pay. The increase in the rate of VAT that was announced in the Budget makes it all the more necessary to move to positive zero rating for funerals. I hope that the Minister will give a specific and positive answer to the suggestion that zero rating should be adopted.
We in the Cooperative movement are grateful to my hon. Friend the Member for Leigh for all the work that he has done. We are pleased that he succeeded in obtaining a place in the ballot and thus was able to initiate a debate on the funeral business. We hope that the Minister will give sympathetic consideration to a matter of great concern for the Co-operative movement and for those of us who are members of the all-party pensioners group, which has discussed these matters on several occasions and on whose behalf I speak this evening. I hope that the Minister will recognise and respond to the eloquence of the arguments advanced by my hon. Friend the Member for Leigh.
§ Mr. Nigel Griffiths (Edinburgh, South)
First, I pay tribute to my hon. Friend the Member for Leigh (Mr. Cunliffe) for the force of the arguments that he deployed, for his well-informed contribution and for the long-term interest that he has taken in the subject, which means that he is one of the premier spokespersons on the funeral business in this place. I pay tribute also to the hon. Member for Stroud (Mr. Knapman) for his informed contribution to the debate. Similarly, I pay tribute to my hon. Friends the Members for Bassetlaw (Mr. Ashton) and for Carrick, Cumnock and Doon Valley (Mr. Foulkes).
We are used to death in the House. One took place fairly recently when a political career was killed off during the autumn as the result of a murder most foul and treacherous. There is more than a whiff of political morbidity coming from No. 10 Downing street at present. More than 600,000 deaths occur in Britain each year, and almost all require the services of a funeral director. The debate that we have today is nothing new. Funerals have 812 been seen as a burden on the poor for more than a century, and for more than 100 years people have used friendly societies, burial societies and industrial assurance companies to help them to meet the cost of funerals.
The majority of people working in the funeral business are well trained. They are competent, compassionate and professional. They take a pride in their work, which has an honourable and well-documented history going back over 3,000 years. It is right that they should be rewarded for their service. I welcome the acknowlegement of my hon. Friend the Member for Leigh that he has witnessed an improvement in the performance of the trade. There are, however, no grounds for complacency.
In April 1976, the Labour Government's Secretary of State for Prices and Consumer Protection asked the Price Commission to report on funeral charges and associated charges such as the cost of coffins, burials, cremations and the like. The commission's findings were that most people were not given written estimates. Only 70 per cent. were given oral estimates. Action was taken to introduce improvements and a code was produced in 1979. It is sad that, in the 1980s, the quality of information and service seemed to slip back in some sectors.
The 1979 code contained six simple provisions. It provided that practitioners in undertakers' businesses should keep their dealings with their clients confidential and that they should advise them on certification, registration of death and associated matters. The code stated that all clients should be given full information about the services offered and that they should be handed a price list or a leaflet setting out prices. It was set out in the code that those who offer funeral services should offer a basic, simple funeral if that was requested and required.
The code included the provision that clients should be given a written estimate to cover the charges and that the charges should not go beyond that estimate. It was stated that fair prices should be detailed and that clients should be provided with detailed accounts. These were simple recommendations. It is amazing that, after 12 years, not all the recommendations have been adopted by all practitioners in the funeral business.
The report of the Office of Fair Trading, which was published in July 1989, arose from complaints about non-compliance with the code and other matters that had been made by the general public. As we have heard from hon. Members on both sides of the House, costs increased by nearly 30 per cent. between 1975 and 1989. Apparently the cost of coffins and the level of professional charges increased beyond the rate of inflation. My hon. Friend the Member for Leigh cited the example of the price of a £19 coffin increasing by as much as 1,000 per cent. Another, more luxurious, coffin—a coffin that will be requested by some—with a wholesale price of £60 increased to £350. My hon. Friend gave examples of handles costing up to £8 subsequently being charged at £42. He spoke of plastic nameplates increasing in price from 69p to £65. We support his contention that basic prices have increased and that the added value on basic products is considerably less than the price eventually charged.
My hon. Friend the Member for Leigh has given a new meaning to the letter RIP—not rest in peace but rip off, as prices soar. The report of the Office of Fair Trading focused on the code of practice of the NAFD, the key requirements of which were not being observed by members of the profession. The shortcomings were detailed. They included a failure to provide price lists, a 813 failure to supply written estimates to clients, and a deep-seated reluctance to provide all the details of a modest and basic funeral.
Last year, the NAFD published in its trade magazine the results of its own random inspections to check whether its members were complying with the code. Up to a year after the report of the OFT, half the inspections revealed that funeral directors were still failing to fulfil the code's requirements of price lists and written estimate forms.
Labour makes five key demands. The funeral code must be applied to all funeral directors, it must extend to cover pricing, and every customer and potential customer must be given a detailed breakdown of funeral costs. It is not satisfactory that a grieving relative should have to organise a funeral after someone has passed on. It is just as important that everyone should be able to make inquiries, irrespective of whether they require a funeral today, tomorrow or sometime in the future and get a price list from every funeral director.
That brings me to the excellent point raised by my hon. Friend the Member for Carrick, Cumnock and Doon Valley about the registration and regulation of all practitioners. By simply registering practitioners, we would have an additional check that the best codes of practice and the highest professional standards were being adhered to. That additional check is necessary, and should be applied to all funeral directors.
We desire to drive out the bad practices, albeit in a small minority, which are prejudicing the standards of the best practitioners in the industry. We must ensure that a price-marking order is drafted in line with section 4 of the Prices Act 1974, to compel all funeral directors to display prices and to provide full itemised costs for all potential customers. It may not be necessary to enforce that measure, but the fact that it would be hanging over the tiny minority of unscrupulous practitioners would be a threat.
§ Mr. Gerald Howarth (Cannock and Burntwood)
I should be most interested to know how many complaints the hon. Gentleman has had from his constituents about the affairs of funeral directors. Can he tell the House who would pay for the panoply of regulation he suggests, which is so typical of socialism?
§ Mr. Griffiths
We know that the hon. Gentleman is assiduous in speaking for the No Turning Back group. He acknowledges that freely, and the Minister also nods his assent. The hon. Gentleman is leaving the Minister short of time to wind up.
The facts are quite simple. The public is demanding regulation of the trade. I have a number of excellent practitioners of funeral services working with the Co-op and in the private sector in my constituency and I would not seek to malign them. I have received only one complaint in the past six months, but it was a serious complaint at a time when the individual concerned was in a great deal of emotional distress. My constituents will not welcome the account of today's proceedings and the barracking from Conservative Members. If I am pressed to name the individual who complained, I shall do so, having asked that person for permission.
I have been a Member of Parliament since 1987 since when I have received several complaints. Every Member of Parliament will be aware of problems in the funeral industry. It would be surprising and, frankly, astonishing if, given that there are 600,000 funerals each year every 814 hon. Member were not aware of one or two complaints. It is perhaps a tribute to Opposition Members such as my hon. Friend the Member for Leigh that their constituents are able to make their complaints known to them. I am not surprised that Conservative Members are shaking their heads and saying that they have no complaints.
§ Mr. Griffiths
If the hon. Gentleman had considered the matter so important, I am sure that he would have raised it in his speech.
We backed the Director General of Fair Trading when he spelled out what must be done. More formal intervention may well be needed. My hon. Friend the Member for Leigh suggested that the matter should be referred to the Monopolies and Mergers Commission. I shall certainly welcome the Minister's response to that suggestion, as I do not believe that it can be ruled out.
I hope that the Minister will investigate the information that my hon. Friend the Member for Leigh gave the House about bids by private firms for municipal funeral services. It cannot be right that a bid of £350 a funeral for a council contract is being made by a company charging its customers double that in the private sector. Surely the Minister is not satisfied to let matters rest there. Surely he must investigate the unjustified price increases in identical funeral in less than month. More than £100 more is being charged for the same funeral.
In short, we need a more positive approach from the Government backing the Office of Fair Trading, supporting my hon. Friend the Member for Leigh and other hon. Members in their efforts to make the industry more accountable, and, most important of all, strengthening the rights of the relatives and friends of the 5 million United Kingdom citizens whose deaths will necessitate funerals in the next decade. We want the Minister to respond positively to those questions.
§ The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh)
The hon. Member for Leigh (Mr. Cunliffe) has chosen a subject for debate which is of interest to all hon. Members. I am sure that the House will have listened with great interest to his comprehensive speech. I am sure that every one of us has had experience of losing loved ones. Often the bereaved feel vulnerable and unable to cope with the practical problems associated with death. They look for support and help and for someone to take over the responsibility of sorting out details and making arrangements.
The hon. Member for Leigh quoted Gladstone, and we all agree that how we treat our bereaved is a measure of the tender spirit of the land. The majority find the help and support from their funeral director adequate. Despite some of the comments made today, we should not forget that there is no evidence of widespread dissatisfaction with the industry. The report by the Director General of Fair Trading in January 1989 produced no such evidence.
As we have heard today, some 650,000 people die each year in the United Kingdom. Most of the associated funerals are arranged by funeral directors. In 1986, the last full year in which the Office of Fair Trading separately recorded complaints about funerals, there were only 126 complaints. My hon. Friend the Member for Stroud (Mr. 815 Knapman) said that he had received no complaints from his constituents, although I accept that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) put a different interpretation on why there had been so few complaints.
§ Mr. Gerald Howarth
Is my hon. Friend aware that, in eight years a Member of Parliament, I have not had one complaint from my constituents? I can tell the hon. Member for Edinburgh, South (Mr. Griffiths) that I have full surgeries. Sellmans, Stacey and John Short and Son in my constituency provide a splendid service, as I am sure the Co-op does—otherwise, I would have received complaints. Is my hon. Friend aware that companies such as John Short and Son produce a full price list, as the hon. Member for Leigh requested? Is it not correct to say that the Opposition want another panoply of controls for which the customer will ultimately pay?
§ Mr. Leigh
My hon. Friend makes his point most effectively. I shall take up one of the points he made.
Since becoming the Minister responsible for consumer affairs, I have received only a handful of complaints about the quality of service provided by funeral directors. I do not dismiss the concerns of those involved in the particular cases, but I urge hon. Members to keep the issue in perspective, as I am sure the hon. Member for Leigh would wish.
We are considering an industry with a long tradition of service to the community. The face of the industry is changing in a number of ways. The hon. Member has referred to increased concentration. There have been changes of ownership and a number of small independent firms have disappeared. People are more likely to find that their local undertaker is part of a group rather than an independent. We should not assume that this is necessarily a change for the worse. There have been changes in society, too. Most people no longer expect their local funeral director to be someone they know—they just hope to receive an efficient service at a reasonable cost carried out with sensitivity to their wishes and feelings. My hon. Friend the Member for Battersea (Mr. Bowis) raised that point in an intervention.
I do not think that we should expect the funeral industry to look today as it did 20, or even 10, years ago. Equally, we should not jump to the conclusion that changes in its structure mean that excessive profits are being made and that people are being ripped off.
Of course, concern about the cost of funerals is not new. Since the 19th century, organisations such as friendly societies, burial societies and industrial assurance companies have made payments to their members to cover the costs of funerals. In 1949, the then Government introduced a death grant of £20 to cover the necessary expenses of a decent funeral. In 1976, widespread concern about the cost of funerals led the then Secretary of State for Prices and Consumer Protection to ask the Price Commission to report on funeral charges and associated charges, including the prices of coffins, burial and cremation. It will be of interest to hon. Members that the commission concluded that, although there was scope for some reduction in funeral charges, profits were not generally excessive. Nevertheless, the commission made the following important observation: 816In the relationship between funeral director and client the former has a marked psychological and commercial advantage, so that the balance of bargaining power is tilted in his favour"—> a point made by the hon. Member for Bassetlaw (Mr.Ashton) in a characteristically powerful speech.Owing to the distress which usually accompanies a bereavement, those who seek the funeral director's services rarely obtain more than one estimate. For the same reason, the funeral director is able, if he wishes, to influence the relative degree of elaboration of the funeral. We have, however, been assured that this is the exception rather than the rule.The commission was therefore concerned that the normal forces of competition did not work effectively in this industry because of the special circumstances surrounding services associated with death. To shift the balance more in favour of the client, and to try and encourage clients to make informed choices, the commission recommended that funeral directors should give clients a written estimate, and that a basic simple funeral should be made available, and its price displayed in a prominent position.
The Director General of Fair Trading was asked by the Government to negotiate a code of practice with the National Association of Funeral Directors to cover those points. As my hon. Friend the Member for Stroud said, that code of practice exists today. I do not think that I need go into great detail about it, as it was read out by the hon. Member for Edinburgh, South (Mr. Griffiths).
Let me put this matter in perspective. The report of the Office of Fair Trading pointed out some significant factors that need to be borne in mind in considering the cost of a funeral. First, the funeral director has little control over the cost of disbursements included on his bill, such as the cost of the burial plot, the cost of providing an organist, and the cemetery or crematorium fees. Secondly, the funeral director's own costs, such as those incurred in the provision of staff, vehicles and embalming equipment, are also to some extent outside his control and may have risen at a rate above the rate of inflation.
At this stage, I should say a bit more about costs. People tend to judge the amount of work involved in arranging a funeral by the amount of time they actually see spent—the visit to their home by the funeral director, and the work that he does at the funeral itself. Clearly, a lot more work is involved. I should not like to hazard an estimate of how much, although I know that the hon. Member for Leigh has his own views on the subject, and we listened with some interest to those views. It is clear that, when the time factor is taken into consideration, along with the industry's overheads, which reflect large items of capital expenditure, a funeral is never going to be cheap.
That point was clearly brought out in the report of the Director General of Fair Trading. It is important to remind the House that Sir Gordon did not claim that funeral directors were overcharging or making excessive profits. Comments made in the Director General's report have been quoted out of context, sometimes giving the impression that Sir Gordon took a view on the question of profits. That is not correct. Indeed, he had no basis on which to take a view, as he had not collected any information about funeral directors' costs and margins.
However, he did emphasise that the cost of a funeral is substantial. He recognised that the bereaved sometimes find the final sum larger than they expected. That is why he recommended improvements in the code of conduct of the National Association of Funeral Directors, to provide 817 more information about prices and about the itemisation of estimates and bills. I listened with interest to what the hon. Member for Bassetlaw said about itemisation, and I shall certainly give the matter consideration.
The funeral directors' association also called for better publicity for the option of a basic "no frills" funeral. I have noted the remarks of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) about VAT. The hon. Gentleman will not expect me to comment at this stage, but I will give the matter some thought.
I shall deal further with the question of overheads when I comment in more detail on competition in the industry. In the meantime, I want to return to the report of the Office of Fair Trading. The Director General concluded that members of the public needed more information about the price of funerals, including more comparative information, to encourage the bereaved to make an informed choice. He wanted, among other things. to see more publicity for the basis funeral and better itemisation of individual charges in estimates and accounts. I repeat that I shall consider carefully the comments of the hon. Member for Bassetlaw on the question of itemisation.
I am afraid that the National Association of Funeral Directors was not totally in agreement with the report of the Office of Fair Trading, and there would be no point in pretending that it endorsed the conclusion drawn by the OFT from the survey. But it did accept that changes in the code of practice were necessary. Accordingly, revisions were made, and a new code promulgated. I shall not go into that code in great detail, as the hon. Member for Edinburgh, South did the House the service of reading out its main points. It is an extensive code, the purpose of which is to reassure the public. For instance, it makes absolutely clear the need to observe the confidence of every client, to render good service at all times, to ensure that advertising is in good taste, to provide clients and the general public with full and fair information, to give a written estimate of all funeral charges, and to come up with an itemised account. I should like to deal with those matters in more detail, but unfortunately time does not permit.
I do not think that legislation to regulate the funeral industry is either necessary or desirable. In this respect, I listened to the remarks of my hon. Friend the Member for Stroud. It is not my purpose to encourage people to go round complaining about the service that they have received. However, there is no substitute for the informed consumer's taking considered decisions in his own interests. I accept that clients of funeral directors may not have at the top of their list, or in the forefront of their minds, the need to make an informed choice, but legislation will not change that. Ultimately, it must be for the individual to judge whether he has received good service. If he feels that the National Association of Funeral Directors has put in place a system of conciliation and arbitration is of the utmost importance, and I am glad of this opportunity to give publicity to that valuable initiative.
There have been changes in the industry. We have heard about them in this debate, particlarly from the hon. Member for Leigh. However, the Co-op remains dominant. In this respect, the whole House is grateful for the particular expertise that the hon. Member for Carrick, Cumnock and Doon Valley brings to the subject. In addition, there are still a large number of independent funeral directors.
The funeral industry is not the first in which small, independent firms have experienced difficulties. The fact 818 that a number have sold out to groups does not necessarily reflect predatory behaviour on the part of the latter. A number of factors, including increased competition, may have contributed to the changes in the industry. There are signs of more active marketing of different products—for instance, the range of packages to enable one to meet the cost of a future funeral by regular payments. I accept, of course, that the hon. Member for Leigh does not give much credence to these packages. Such arrangements are not new in themselves, but their development in the upper part of the market are.
There were some remarks about profits. It has been claimed that some funeral directors are making huge profits. On this point, other hon. Members, like me, will have read the report of the Great Southern Group's results for 1990. The group, which is quoted in the unlisted securities market, suffered a 9 per cent. downturn in pre-tax profits. The setback occurred despite an overall gain in market share. I hope that this reference to the profits of the Great Southern Group shows that there is another side to the story.
§ Mr. Cunliffe
Does the Minister concede that the You Care group made a year's profit of £500,000 on a turnover of £2.5 million? Does that not reflect a balance? The Minister talks about competitiveness. Surely this is a classic example of how one company can out-compete another?
§ Mr. Leigh
I cannot comment on the profits to which the hon. Gentleman has referred, but I repeat that we must put the industry in perspective.
I listened carefully to the speech of the hon. Member for Leigh, which lasted more than an hour and 20 minutes. I think that the hon. Gentleman was trying to intimate that the industry's profits are generally excessive. I do not think that that is in fact the case. The hon. Gentleman is nodding his head. The insistence of the Director General of Fair Trading on the inclusion of stricter requirements on transparency of information in the code of the National Association of Funeral Directors will also contribute to the increasing competition to which I have referred.
I will say more about the role of information in encouraging consumer choice, which is not straightforward in relation to funerals. As a general policy, the Government strongly hold the view that one of the keys to increased competition, and therefore to lower prices and more efficient services, is a well-informed consumer. That does not mean simply the provision of more information. Consumers need clear information, presented in a way that is easy to analyse and to compare—and at the right time.
Many people do not consider shopping around for a funeral. Some are too distressed, while others regard it as inappropriate, or even disrespectful, to do so. Instead, they want the funeral director to take the arrangements off their hands. Often, they do not think to ask the sort of questions that they would consider natural when contracting any other kind of service.
One might argue that that gives the funeral director an opportunity to take advantage of the consumer. Equally, the director may be faced with the problem of deciding the extent to which he should bother the bereaved with details——
§ It being Seven o'clock, proceedings on the motion lapsed, pursuant to Standing Order No. 13(8) (Arrangement of public business).