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Mr. Hoon: There is a competition on the Opposition Benches for the title of chief conspiricist, but I am sure that hon. Members who persist in reminding me of my previous responsibilities will also be able to contribute to Defence questions in due course.
Sandra Gidley (Romsey) (LD):
The Leader of the House will be aware that this is the time of the year when many decent citizens have their lives blighted by the sort of travellers who trespass on land, intimidate the local residents and leave behind a trail of destruction. In my
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area, the county council, the borough council and the police all seek to blame each other and pass the buck, but the buck surely stops with the Government. When will they devote some Government time to tackling the problem?
Mr. Hoon: That is an issue that right hon. and hon. Members raise regularly. We all understand the harm done to local communities when illegal trespassers settle and leave behind significant disruption, but increasingly effective legal measures are available, and the Government have improved those measures over the years. If there are specific legal difficulties, I hope the hon. Lady will raise them with me and I will ensure that the problems are examined.
[That this House condemns proposals by the Government to cut Oxfordshire County Council's Supporting People budget by 60 per cent., or in real terms by £5.9 million by 200708; further notes that the service loss has been described by Oxfordshire Age Concern as 'alarming' and by mental health charity Oxfordshire Group Homes as 'disastrous'; agrees with Oxfordshire County Council that the proposed Supporting People distribution formula is a 'rushed job done by the Government's consultants through the minimal consultation' with neighbouring authorities faring dramatically differently from 48 per cent. gains to 73 per cent. cuts; believes that the proposed distribution formula threatens to be a one-way street for support services with big cuts in the services which lose and virtually no expansion of services in the authorities which gain; and
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calls on the Government urgently to review the proposed Supporting People distribution formula to ensure that the most vulnerable in the community continue to receive the funding and support they require.]
We need an early review of the distribution formula for the "supporting people" programme. As it stands, counties such as Oxfordshire will have a 60 per cent. cut in the budget. Not surprisingly, organisations such as Age Concern say that that is alarming. Mental health charities have said that it will be disastrous. This is ticking time bomb for the Government, since it will mean that in the year to come all sorts of organisations will not get the money that they thought they would get to do valuable work supporting the vulnerable. Please will the Leader of the House ensure that we have an early debate on the topic?
Mr. Nigel Evans (Ribble Valley) (Con): I will be at the fleet review on Tuesday, too, so if the Leader of the House could give me a lift back, I would be extremely grateful. I wonder whether he saw the BBC "Panorama" programme on Sunday night about cannabis and psychotic disorders, particularly affecting young people who take cannabis regularly. We used to have an annual debate on the Government's drugs strategy and an annual report, but that seems to have gone by the board. Is it possible to have an urgent debate on the Government's drugs policy before the Government inquiry reports around Christmas time on the reclassification of cannabis from class B to class C?
I, too, saw reports about the harmful effect of cannabis. It is a matter of great concern and I know that the Government will respond in detail to the recommendations.
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I begin by apologising to the House that I have to leave after opening the debate to attend a family wedding. The Conservative party has been generous in understanding that. The Chief Secretary will remain throughout the debate, and will close it ably and effectively. [Interruption.] I am always nice about the Chief Secretary.
I am delighted to bring the Bill before the House. In doing so the Government are fulfilling a commitment made in May 2004 to bring home reversion plans into statutory regulation by the Financial Services Authority. To buy a home reversion plan is a huge financial decision, involving the most important and sometimes only significant asset of elderly people. In addition, it can have significant implications for tax, benefits, inheritance and long-term financial planning, which need to be considered carefully. Regulation is facilitated by the Bill and is not designed to discourage people from purchasing such products. It will help people make informed choices, offer valuable consumer protection and ensure that there is a level playing field in the equity release market. Most of that already falls within the scope of FSA mortgage regulation.
Furthermore, the provisions will ensure that those who are uncomfortable about taking out interest-bearing loans, such as Muslim consumers, can access the growing market in sharia-compliant home finance products while benefiting from the protections afforded by the FSA regulation. The Bill has been introduced to meet the needs of consumers, but also at the behest of the industry, which has welcomed the news that the Government are to legislate to level the regulatory playing field in this area.
Mr. Michael Fallon (Sevenoaks) (Con): I thank the Minister for giving way so early in his speech. He says that the Bill will be of benefit to consumers. Will he confirm that his own regulatory impact assessment says that the measure will cost £11 million immediately and will have an ongoing cost of £5 million a year? Is that not exactly the kind of over-regulation about which the Prime Minister was complaining?
I refute that suggestion. These measures are supported by the organisations that sell the products, and by consumers. Surely we have a responsibility to protect consumers, particularly vulnerable consumers, many of whom are older people. They require protection by the FSA. The hon. Gentleman is out of touch if he regards the measure as an example of over-regulation. There is a consensus that it is effective and sensible.
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Hon Members will find it useful if I take a moment to clarify what home reversion plans do. At base they are simply a form of equity release schemefinancial products that allow home owners to release the value of their property above any amount over the mortgage. Equity release schemes involve a provider giving the home owner a lump sum, income or both on the basis of the value of the home, while allowing home owners the right to continue to live in the property. Providers receive their returns when that home is sold. These schemes are generally sold to the over-60s and they provide a valuable means for pensioners, who may be cash poor, to realise some of the value that they have locked up in their homes and so improve their standard of living.
The products are not simple to understand. Realising a cash lump sum or income by equity release can have complex implications for pensioners' tax and benefit situation. Hence the need for regulation to ensure that potential purchasers of equity release schemes receive an appropriate level of advice.
There are two basic types of scheme: mortgage-based schemes or lifetime mortgages, and reversion plans. The clear difference between the two is that in mortgage-based schemes the householder retains ownership of the property whereas in reversion plans the reversion provider becomes the owner of whatever proportion of the property is sold. In mortgage-based equity release schemes, also called lifetime mortgages, home owners take out a loan secured on their property, but with the interest on that loan becoming payable when the house is finally sold, either on death or when the owners move into long-term care. These products are currently regulated by the FSA. In a home reversion plan, home owners sell all or part of their house at a discounted rate in return for a lump sum and/or income, and continue to live in the house rent free or for a peppercorn rent for life. The amount paid to the house owner is based on a number of factors, including the value of the property, the proportion of the property sold, the life expectancy of the owner, long-term interest rates and expected house price inflation. These plans are not currently registered by the FSA.
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