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Lord Sharman: Sadly, that was a false dawn. I am in a state of total confusion. I really do not understand what the Minister has been saying to us. I wish to reserve my position until I have had an opportunity to read in detail in Hansard what he said.

I make two observations which struck me as he was making his remarks. Clearly, the noble Lord does not consider that a caravan can be a home, which it is to many families in this country. The same can be said about a boat. Both may have valid legal mortgages on them and, for the life of me, I cannot understand why they should not be considered in the same manner.

However, I shall look in some detail at what the Minister said before returning to this matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 98 not moved.]

Lord Lipsey moved Amendment No. 99:

("( ) The Treasury shall within 28 days of the passing of this Act make provision under subsection (1) in respect of buying, selling, subscribing for, carrying out or underwriting contracts of insurance against the provision of long-term care or offering to do so, either as a principal or as an agent.").

The noble Lord said: First, I thank noble Lords on all sides of the Chamber who have been kind enough to support this amendment. In recent weeks, I felt rather like the Ancient Mariner as I prowled the

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Corridors of this House, stopping one in three and telling of the woes which will arise if this amendment, or at least its substance, is not accepted by the Government. However, I have been received with nothing but patience, understanding and a great measure of support. I extend that thanks to my own Front Bench and to the Minister, in particular, who has been endlessly generous with his time and patience in discussing this matter.

When I spoke on this matter on Second Reading, I pointed out that there really was a very wide consensus that long-term care products should be brought into regulation in view of their nature and the vulnerability of those to whom they are sold. That extended to the PIA, the new FSA, both the majority and minority members of the Royal Commission on Long Term Care and, perhaps most significantly, to the Joint Committee chaired with such distinction by the noble Lord, Lord Burns.

In the past few weeks, we have been reminded of that by some of the letters that we have received from outside. Many Members of the Committee will have received a letter from Age Concern. I see the noble Baroness, Lady Greengross, in her place. Age Concern states that it believes that it is,

    "vital that people are given appropriate financial advice from a competent professional and hence we believe these products ought to come under the rules of the Financial Services Authority".

I have received a letter from the Continuing Care Conference which is an umbrella organisation, a very fine organisation, embracing all the interests from producers to those who are cared for. It too says that it believes that,

    "regulation and consumer protection is essential",

since it says that,

    "by their very nature, they involve large sums of money and entail a long-term relationship with the customer".

It is striking that that is also the view of the industry. I have received a briefing from the Association of British Insurers which says that it is supportive of regulation. Even the industry wants to be regulated.

Today, the fourth estate has rowed in. In its leader this morning, the Guardian stated that,

    "peers should step in where pusillanimous ministers fear to tread".

Needless to say, I should resist absolutely any suggestion that anyone on our Front Bench has any pusillanimity of any kind whatever. But I agree with the broad thrust of the Guardian's leading article. So it seems that everyone is out of step except our Treasury. That is a puzzle, particularly to people like me who believe that the Treasury does little wrong. The problem is that the Treasury has not been terribly good at communicating its problem. It has taken more positions on the issue than appear in the Kama Sutra. I have argued through each of them, only to find that behind it lies yet another position. I hope that we are now getting somewhere near the top of the mountain and that we shall see what it is really on about.

In the course of saying that, I shall deal with the argument eloquently put by the Minister at Second Reading where he hinted that CAT standards might be enough to control the product. But they are not

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enough in this area. I take the example of a lady of 90 who has no dependants, no heirs; no one to whom she wants to leave her money. She is going into a home. A salesman comes up to her and says, "Listen dear, unless you take out my insurance policy, you will be on the streets". He gives her his insurance policy. That policy may be absolutely perfect. It may meet CAT standards in every regard, but she does not need it, because under the existing arrangements, even before the Royal Commission's report is implemented, as soon as her assets go down to a certain level, she will be paid for by the state. She does not need the product, although it is an excellent product. What is needed is a salesman who is regulated, so that he cannot say that to the old lady, at least not if he wants to be reasonably sure of keeping his job.

As the debate went on, however, we found a different argument coming forth from the Treasury; the argument that we are hearing. When I was on various broadcasts the other week debating the matter, I was told that a Treasury press spokesman had said that the idea was premature. What a great, "Sir Humphrey" word "premature" is. "Premature", when 30,000 policies have already been sold. "Premature", when it is 12 months since the Royal Commission reported and 10 months since the Burns committee reported. "Premature", when the Government have only just got around to setting up a committee to consider the issue, which has met--I asked the other day--precisely once. "Premature"--this is the most important point, because it matters to consumers--because, by this summer, the Government have promised to give their response to the Royal Commission and to tell us what is to happen. When that response comes--the Royal Commission majority and minority reports both found a role for long-term care insurance--many people will realise for the first time that, contrary to their present expectations, the state will not fund all their care needs for them and, if they want to leave legacies to their children or to keep their money, they must insure for it.

There is an issue of timing here. If the matter goes on being "premature" for too long, we shall find that we are just getting out to look at the bolt on the stable door while in the meantime the horse is galloping off, four fields away. It will then be too late to deal with the matter. It is not premature; it is overdue.

From what I am saying, it will be clear to the Committee that I believe that the matter should have been dealt with before now. Having said that, we are where we are. I accept that there are certain hoops which must be gone through before regulation may be put in place. For example, it is clearly right in terms of general government policy that a proper regulatory impact analysis should be carried out before the form of regulation is finalised. Equally, it is clear also that the matter is urgent. As the time for the Government's answer to the Royal Commission looms closer, it is becoming more urgent.

Having spoken to many noble Lords about the matter, I do not believe that the House will ever forgive itself if it allows the legislation, which gives it a grip on

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the issue, to go through unless and until it is satisfied that the Government have seized the point and are moving to action on it. I look with my customary optimism--perhaps with a little more than my customary optimism--to my noble friend the Minister for comfort. By the time we reach Report stage, I shall be looking for more than comfort. I shall be looking for commitment. I do not believe that we should let the Bill pass unless we are reasonably assured by Ministers that the interests of such a vulnerable group of consumers will really be protected.

10.15 p.m.

Lord Burns: I too want to support the amendment. I agree with the noble Lord, Lord Lipsey. It is a puzzle that we are debating this matter. Just over a year ago, on, I believe, 16th March--I stress that date--in evidence to the Joint Committee, Howard Davies put the case for the regulation of long-term care better than I could. He took the committee through the methodology he wanted to deploy in looking at the new product area. He argued:

    "I would say that long-term care insurance probably also scores quite highly ... I suspect that if you ran a complete cost-benefit analysis on that you would find that scoring quite highly".

Having listened to the arguments, the Joint Committee also concluded that long-term care should be included.

In response to the report of the Joint Committee, the Government offered some optimism. They said that they also appreciated the thinking behind the recommendation that long-term care insurance be brought within the remit of the FSA. That has been considered in the context of the Government's response to the recent report of the Royal Commission on long-term care which reached a similar conclusion.

That is good. But almost nothing has happened. As the noble Lord, Lord Lipsey, pointed out, we have had radio silence. That has caused a number of noble Lords to wonder what is going on. Those of us who know the Treasury well know that it can work fast when it needs to. We also know that sometimes it does not necessarily want to move too quickly.

I would like to believe that it is merely the pressure of work and the huge effort that has gone into this Bill that explains the silence. I hope that there is no joined-up decision-making problem with other departments. The best gloss I can put on it is that a decision in principle has been taken but that it will take time to complete the work.

It would be sad if the Government decided on the basis of all the talk about this over-mighty and unaccountable organisation that somehow or other we should draw a line in the sand on this point and that these products should be left out of the ambit of the FSA. That would be a bad mistake. There may be worries that if we have regulation here it may stifle growth in the market. It is equally possible to argue that if we had regulation it would make the market grow faster than otherwise because of the extra security that it would give to people.

The Minister said in relation to the previous amendment that in practice this provision does not need to be in the Bill. I believe the scope is already

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there. However, several noble Lords want some reassurance, not only that it is possible, but also that there is a good chance that it will happen. I believe that we need a decision in principle about this matter, even if all the detail cannot be announced now. At a minimum, we require a strong indication that the Government are minded to include long-term care within the scope of the Bill.

I do not believe that there is any reason to make a fuss over this issue. I hope that the Minister can give us the comfort that we need to go quietly because that is what we want to do. But it is important to say that to some of us that it is beginning to look a little too difficult.

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