A full copy of  Ian McCartney’s speech to the Westminster Hall debate on the collapse of Farepak is available at: http://www.publications.parliament.uk/pa/cm/cmtoday/cmwhall/05.htm

Following yesterday morning’s Westminster Hall Debate on the collapse of Farepak.

1. The collapse of Farepak

Three weeks ago it was announced that Farepak, the Christmas hamper scheme, had collapsed. This has led to tens of thousands of predominantly low income families losing significant savings for this Christmas, and is a devastating blow to those families at this time.

People contributed to the Farepak club on a regular basis throughout the year and would normally expect to receive their vouchers at this time and hampers towards the end of the year. Despite having put money aside, customers will not now receive their vouchers or hampers and are unlikely to get back much, if any, of the money they have paid.

While the British Retail Consortium is no longer supporting efforts to come up with a goodwill gesture at this time, we remain determined to do what we can to support the people who have lost out.

Therefore we are happy to support the Farepak Response Fund, an independent organisation which is being set up by the respected voluntary sector organisation Family Fund. The Farepak Response Fund, which is being formally established over the coming days, has already received pledges of over £1 million.

Clearly MPs, or indeed the government, cannot get involved in the event of every insolvency. However given the particular circumstances of our people being so appallingly let down at Christmas time, we are seeking support for a goodwill gesture in this case.

2. What victims of Farepak should do

It is important that customers make a claim with the Administrator.

Contact details for creditors are: tel 0870 830 6010, fax 01793 606 057.

e-mail customer.claims@farepak.co.uk <mailto:customer.claims@farepak.co.uk>

Information on making a claim is posted by the administrators at www.farepak.co.uk

3. What action we have taken

This issue has been reported widely in regional and national media, and raised by many MPs as a matter of urgency.

We have responded with a number of initiatives.

Firstly, the DTI set out the procedure for dealing with such cases. Alistair Darling has subsequently announced to the Trade & Industry Select Committee on 24 October that an investigation of Farepak under the Companies Act 1985 is now under way. Officers from the DTI’s Companies Investigation Branch are now looking through the company’s records, alongside the administrators. This will allow any subsequent proceedings to take place more quickly than usual, should they be necessary.

There have been a number of very serious allegations  made about the conduct of Farepak and companies closely linked to it. All these matters are now being dealt with by the investigation.

Secondly, Ian McCartney has arranged to see John Fingleton, Chief Executive of the Office of Fair Trading, on 8 November to ask the OFT to look at whether any specific regulatory changes are required to cover this form of trading.

There is currently no specific regulation of this form of trading, although it is of course covered by general consumer protection and other statutes. It does not fit within the definitions of the provision of a financial service, and so is not regulated by the FSA.

Thirdly, Ian McCartney will be meeting the Hamper Industry Trade Association. To be clear, there are close to one million customers in the two remaining, large hamper schemes. Those companies are supporting our action, and have indeed offered very significant contributions to the Farepak Response Fund.

The above-mentioned measures will, we believe, make sure that this never happens again. However, we remain determined to help the estimated 100,000 plus families who have had their Christmas wrecked by the collapse of Farepak.

So fourthly, the government has been supporting the Family Fund in establishing the Farepak Response Fund, so we can make good the many pledges of support received from across the country in recent weeks.

4. The Farepak Response Fund

We are determined to do what we feasibly can to help the victims of the collapse of Farepak. We are working closely with the Family Fund - a registered charity based in York, which is well-respected in government, business and charity sectors.

The Family Fund is now setting up a dedicated voucher fund for Farepak customers, called the Farepak Response Fund.

The Fund will be independent of all agencies and will accept donations from all sectors.

It is important to stress that the Fund should only be contacted with pledges/donations. Vouchers will be distributed by the existing agents. Individuals who have a claim in the insolvency should contact the Administrator.

A number of MPs have already made a huge contribution to support the people who have lost out due to the collapse of Farepak. As set out previously, Ian McCartney has said he will give a day’s pay in support of the fund and has urged those campaigning on the issue to consider voluntarily doing likewise. I have joined this valuable move in support of the Response Fund.

I will be visiting Burns Avenue on Friday 10 November to meet again with some of the many local residents affected by this financial collapse.

Alan Keen MP