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Last Updated: Tuesday, 7 November 2006, 14:39 GMT
Farepak families fund is launched
Catalogue detail from Farepak website
Farepak collapsed without warning in October
A new fund is being set up to help the thousands of families affected by the collapse of the Farepak hamper firm.

The Minister for Consumer Affairs, Ian McCartney, said the Farepak Response Fund was being established with help from York-based charity Family Fund.

He said Tesco had pledged 250,000 and called on other firms to help.

Swindon-based Farepak ran a savings scheme for 150,000 people for vouchers and Christmas hampers, but collapsed in October without offering compensation.

In another development, Sainsbury's has agreed that Farepak customers can get 25% of the value of their savings in Sainsbury's vouchers.

Family grants

Mr McCartney announced the creation of the fund after a House of Commons debate on Farepak's collapse.

"If you are a multinational, national or local firm, it gives you the chance to make a donation, great or small," he said.

Let's get resources to people who need them
Minister for Consumer Affairs, Ian McCartney

The Family Fund is a registered charity covering the whole of the UK, funded by government money, which provides grants to families with severely disabled children.

Mr McCartney said that during 2006, it had given out grants totalling 27m to 46,000 families.

'Spirit of Christmas'

He said the Farepak fund, which will grant vouchers to affected families, would be independent and accept contributions from any organisation or sector wishing to help.

"The fund is about a spirit of Christmas," he said. "Let's get resources to people who need them."

Calling the situation a "national emergency", he also asked MPs to give a day's pay towards the fund and said he was in negotiations with the London Stock Exchange about a possible fundraising day there.

MPs have called the Farepak problem a national tragedy and emergency

After announcing its donation, Tesco said: "While the circumstances surrounding Farepak are not in any way of our making, we are very concerned about the impact on those affected.

"We believe the DTI scheme offers the best means of helping all Farepak customers to enjoy their Christmas."

Argos said it was "currently investigating ways in which we can reach out to Farepak customers to help them out as we approach the Christmas season".

Marks & Spencer chief executive Stuart Rose, speaking before the Farepak Response Fund was announced, had said M&S would be willing to contribute to a scheme to help once one was in place.

And Park Group, which owns High Street Gift Vouchers, one of the products sold by Farepak, has said it will contribute 1m to the scheme.

Meanwhile, home shopping firm Findel, which bought a number of business assets - but not the stricken hamper firm - from Farepak owner European Home Retail, said it would support the fund.

Angry MPs

Earlier in the Commons, Labour MP for Birkenhead, Frank Field, attacked the role of HBOS in the collapse of Farepak.

HBOS was Farepak's banker and Mr Field said it should bear a heavy responsibility for the misery caused.

I felt angry, upset and confused, when I heard that Farepak had collapsed

Mr McCartney said he hoped HBOS would contribute to the fund.

But some MPs said they wanted a protest outside HBOS's headquarters in Edinburgh.

And the Labour MP for Swindon South, Anne Snelgrove, said in the Commons that the demise of Farepak was the "nightmare before Christmas" for hamper savers.

After the welfare fund was announced she said: "At last we now have a system where we can bring in money from big business and others who want to donate."

'Goodwill gesture'

Sainsbury's has become the first major retailer to give some help to Farepak members, offering vouchers to be spent in its stores.

The supermarket said it would need the help of Farepak agents, who hold customer details, to ensure its plan was a success. Sainsbury's hopes to despatch the vouchers by the beginning of December.

It said: "While Sainsbury's has no involvement with Farepak and its operation, we now know that many of Farepak's customers had planned to use their savings to buy Sainsbury's vouchers.

"We hope that through this goodwill gesture, we have been able to give these customers that opportunity and we have gone some way to mitigating this difficult situation."

The Department of Trade and Industry has launched an investigation into what happened at Farepak.

Administrators said that no orders would be fulfilled after the company was taken into administration on 13 October.

Some of those affected are understood to have lost thousands of pounds they had saved in vouchers ready to spend at Christmas.

What MPs have said about the Farepak collapse

Farepak: Your stories and views
07 Nov 06 |  Working Lunch
Hamper rescue plan is 'unlikely'
03 Nov 06 |  Wiltshire
Government to probe hamper firm
24 Oct 06 |  Business
Hamper campaign website launched
27 Oct 06 |  Working Lunch
Goodwill hope for hamper victims
21 Oct 06 |  Wiltshire
Farepak agents speak of sadness
17 Oct 06 |  Business
Bleak Christmas for hamper firm
16 Oct 06 |  Business

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