MPS have been urged to back new laws to regulate Christmas savings clubs. The move, by Labour MP Anne Snelgrove, is aimed at preventing a repeat of the collapse of the Farepak savings scheme in 2006, which hit thousands of hard up families in the North West during the festive season.

The Swindon South MP has introduced her own legislation in the Commons, with the backing of other MPs. Although it is unlikely to become law she hopes it will persuade the government to bring in its own measures.

The collapse of Farepak owing £50 million hit 150,000 savers who had put aside money for presents and food hampers.

Mrs Snelgrove said: "Now is the right time to move forward with proper long-term regulation. I hope to persuade the government to compensate former Farepak savers by giving them the confidence this will never happen again."

The MP hopes that her Christmas Saving Schemes (Regulation) Bill will be a blueprint for government laws.

Ministers helped set up a Farepak fund which has repaid some of the lost cash, with many MPs giving a day's pay to the fund.

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