---

Farepak

I congratulate my hon. Friend the Member for South Swindon (Anne Snelgrove) on her powerful speech and her advocacy on such an important cause. As has been said, the fact that so many right hon. and hon. Members are here—this is surely the best attended Westminster Hall debate—shows the extent and depth of concern, reflecting that of our constituents, that something must be done. As she said, it is particularly tragic that so many of those affected can least afford to lose that kind of money—least of all at this time of year. Many of my constituents are affected, as are those of other hon. Members. A lot face the loss of hundreds of pounds. Our local paper, the Oxford Mail, reported the case of a mother of six and her daughter, a mother of one, who had paid in £900 and £450 respectively. It is not hard to imagine what a blow the collapse has been for their Christmas. A local agent and near neighbour of mine, Debbie Simms, who first alerted me to the scale of loss locally, paid her final instalment of £1,600 into the bank on Friday 13 October, shortly before the administrators were called into Farepak at quarter-past 2 that very day. She and I have been considering whether there is any way of getting the money back from the bank concerned. The questions to which we must get answers and on which my right hon. Friend the Minister must act, although I know that he is already doing so, fall under three key headings. First, how did the collapse happen and could it have been avoided? As my affected constituents have pointed out, there were signs that something was wrong when shares in the parent company, European Home Retail, were suspended in August. How was Farepak allowed to go on collecting money? How is it that, as The Sunday Telegraph reported, millions of pounds were regularly transferred between Farepak and EHR? How is it that Farepak’s bank, HBOS, continued to take in customers’ money to credit a company that it must have known was in serious difficulty? The Department of Trade and Industry inquiry must get clear answers on such questions and on the responsibility of Farepak directors. It must also have lessons to learn in respect of my second key question: how can we better protect the hard-earned money of people who save up for Christmas in such a way? After all, as has been pointed out, Christmas hamper schemes such as this one are, to all intents and purposes, savings schemes. They should be regulated as savings schemes and brought within the supervision of the Financial Services Authority. There is a clear need for standards. There should be oversight of the adequacy of such schemes’ financial positions and protection against money being siphoned off to elsewhere within a group. Furthermore, a bond or insurance scheme that protects against financial insolvency should be set up. I hope that my right hon. Friend the Minister can provide positive assurances that action, with legislation when necessary, will be taken as a matter of urgency on all those points. The third and most pressing question of all is about what can be done now to help those who have lost out. I commend the speed with which my right hon. Friend, as Minister with responsibility for consumer affairs, moved to try to get a goodwill contribution from the British Retail Consortium. It was a bitter disappointment when it decided that as an organisation it could not help. I had written to the chief executives of Tesco, Asda and Sainsbury’s, all of which serve my constituency, asking whether they could donate just some of their profits in that very worthwhile direction.