EU: Financial Regulation (EUC Report)

Motion to Take Note

5.23 pm

Moved by Lord Harrison

That this House takes note of the Report of the European Union Committee on The post-crisis EU financial regulatory framework: do the pieces fit? (5th Report, Session 2014–15, HL Paper 103)

Lord Harrison (Lab): My Lords, in the welcome presence of the noble Lord, Lord Boswell, I am delighted to introduce the EU Committee report, ThePost-crisis EU Financial Regulatory Framework: Do the Pieces Fit? The report was the product of the work of the EU Economic and Financial Affairs Sub-Committee, which I had the honour of chairing for five years, up until the general election. I now speak as a former chair, having been succeeded by the noble Baroness, Lady Falkner of Margravine, who I am also very pleased to see here today. I wish her every success in her new role, in particular given the interesting times we continue to live in.

Indeed, it was precisely those interesting times that prompted the sub-committee to undertake this inquiry. Following the outbreak of the financial crisis, the European Commission introduced no fewer than 41 legislative proposals—and the alphabet soup of acronyms that followed—resulting in a radical transformation of the European Union financial sector regulatory framework. Rules, supervision and institutional structures have all been affected and EU law has significantly increased, both in breadth and depth. The sub-committee decided to launch an overview of these significant reforms. Were they necessary and proportionate? What went right and wrong in responding to the crisis? How did the European Union institutions perform and did the reforms have the desired effect?

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We took evidence over a period of several months from key witnesses, including: our own Government; Michel Barnier, the then Commission vice-president responsible for the internal market and services; two deputy governors of the Bank of England; the Financial Conduct Authority and the PRA; and two of the new European supervisory bodies, known as ESAs—the European Banking Authority and the European Securities and Markets Authority, or ESMA. We were ably assisted in our work by Professor Niamh Moloney, Professor of Law at the London School of Economics, who acted as specialist adviser for the inquiry. We are grateful to Professor Moloney and to all our witnesses. I am also personally grateful to Katie Kochmann, our policy adviser, and Stuart Stoner, our clerk whose sharp intelligence and unstinting industry have been rewarded with a deserved promotion to the Select Committee.

We began by assessing the objectives behind the proposals. These included: restoring and deepening the single market in financial services; establishing a banking union; building a more resilient and stable financial system; enhancing transparency, responsibility and consumer protection; and improving the efficiency of the European Union financial system.

We assessed the performance of the European Union institutions. We found that they were placed under considerable strain by the crisis. However, given the magnitude of the task they faced in responding to a once-in-a-generation crisis, we found that they performed well. Nevertheless, the sheer scale of the legislative reforms inevitably meant that the resulting framework contained passing weaknesses. In particular, the expected high standards of consultation and impact assessments were not always maintained. Can the Minister ensure that these will be restored to the premier position they deserve when discussing any of the new financial changes that will happen?

A principal focus of our work was an assessment of the new European supervisory authorities. They have endured a baptism of fire since their inception in 2011. I was very pleased that, six months later, we produced our first report—I think we were the first institution to do any analysis of their role. They have been responsible for much good work yet they are hampered by several fundamental weaknesses, including a lack of authority, insufficient independence, marginal influence over the shaping of primary legislation and insufficient flexibility in the correction and tidying up of the legislative errors that inevitably happen. Above all, they suffer from inadequate funding and resources—something we found in our 2011 report. In our view, the powers and authority of these agencies needed to be enhanced. I would be interested in the Minister’s view on how that can be achieved.

There are some oft-cited cases of flawed legislative reforms, including the alternative investment fund managers directive—the AIFMD—and the bank remuneration provisions in the capital requirements directive IV as well as the contentious plans for a financial transaction tax. The sub-committee expressed grave concerns about the latter proposal throughout my time in the chair, which included two sharp and critical reports, yet discussions continue on this doubtful

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project. They rumble on. Will the Minister update the House on what is happening with the financial transaction tax?

Yet these cases were exceptions. We found that the bulk of the new regulatory framework was necessary and proportionate and, significantly, would have been introduced and implemented by the United Kingdom in some form, even if action had not been taken at European Union level. This was particularly so because so much legislation derived from G20-driven international standards on financial sector regulation, where the then Prime Minister Mr Brown must be given his proper credit.

That being said, we found that not enough consideration was given to the general, overall effect on the financial sector of such a huge programme of reform. In short, the cumulative impact of the reforms was not always fully calibrated or appreciated. Many of the reforms were understandably designed to strengthen the resilience and transparency of the financial sector, yet a by-product of this focus was a belated recognition of the importance of the growth agenda. In this important discussion, I hope the Minister will fully take on board the importance not just of completing the financial services single market agenda but of the single market as a whole. Will he update us on President Juncker’s €300 billion financial injection, much of it private money, in order to get the economy of the European Union going again?

In the light of our concerns, I am pleased at the approach taken by the new Commission. First Vice-President Frans Timmermans has placed great store by the Commission’s better regulation agenda, including enhanced impact assessments, better stakeholder consultation and a recognition that the Commission should be judged by the quality of its output, not its sheer quantity. Likewise, the new Commissioner for Financial Stability, Financial Services and Capital Markets Union, the noble Lord, Lord Hill of Oareford, has made a commitment to review the cumulative effect of these various reforms. In addition, his commitment to such proposals as capital markets union as a tool for growth and investment also bodes well. We were very pleased to complete our capital markets union report before the end of my chairmanship. I hope that it will be discussed in this Chamber at a later date.

Our report was entitled The Post-Crisis EU Financial Regulatory Framework but, as noble Lords are well aware, the crisis continues to deepen in Greece. The robustness of the new framework, including key measures such as the single supervisory mechanism and the single resolution mechanism for EU credit institutions, is likely to be tested like never before, and the first few weeks seem to have done so.

Meanwhile, we have our own concerns here in the United Kingdom. Our report stressed that the implications of these reforms for the United Kingdom are immense, given that we have the largest financial sector in the European Union. We expressed concern that the UK’s influence over the European Union financial services agenda had diminished, despite the appointment of the noble Lord, Lord Hill, and stressed that the Government and other UK authorities, including the City

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of London, needed to take urgent steps to correct this, and to enhance the UK’s engagement with our European partners.

We also stressed the need to convey the message to all in Europe that the prosperity of the City of London, and the financial services industry that it hosts, is in the interests not only of the United Kingdom but of the European Union as a whole. Again, I hope that the Minister can give us an assurance that these points will be borne in mind as negotiations on the question of UK membership of the EU progress in the coming months.

I was very pleased to attend, again with our clerk Stuart Stoner, the parliamentary conference of the IMF in April, and Madame Lagarde was very pleased to receive from my hot sweaty hands a copy of this report, which she promised to read. This again demonstrates that we can have an influence by doing the studied work that is typical of this House, and I thank colleagues not just of the committee that I have left but those over the five years that I sat on it and had the pleasure of chairing it. I thank them for all their help and hope that the noble Baroness, Lady Falkner of Margravine, will enjoy her period in the chair in the coming five years, which will be testing indeed.

5.36 pm

The Earl of Caithness (Con): My Lords, the noble Lord, Lord Harrison, paid a fitting tribute to the staff of the committee, to the participants and to the quality of our witnesses, and I can do no more than say amen to what he said. I pay particular tribute to the noble Lord himself. He chaired the committee wonderfully well for the two years that I have so far sat on it. It is a very diverse committee—on the one hand there were some very strong Europhiles while on the other there were people who wanted to get out of the EU, and still do—yet, thanks to his guidance, we always managed to produce a unanimous report. That is a tribute to his skill. We will miss him but are also delighted that the noble Baroness, Lady Falkner, has taken on a pretty warm seat.

The EU has done a formidable amount of work since the crisis of 2008, with a large number of directives and regulations in a short time. It is probably unique in the EU’s history. Our report poses the question: do the pieces fit? Yes, they fit pretty roughly, but you would expect that from western European countries and the Commission. A more pertinent question is: do they solve the problem? That is more difficult to answer, because obviously a lot of stuff is yet to be implemented and the jury is still out. Still, I shall offer my initial opinions, which I have to tell your Lordships have hardened quite considerably since we produced the report.

Sovereign debt is not mentioned in our report but the European Systemic Risk Board has just reported after three years’ work on the question of sovereign debt. It has said that the favourable regulatory treatment of institutions that buy the debt leads to a continued high-risk strategy. Its recommendation is to do nothing.

The worldwide banking system remains flawed. Unlike companies, banks rely almost entirely on borrowed funds, including money from depositors. That allows

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them to take bigger risks, and they will crash the economy again—it is only a question of when. It is a greater risk for us in Europe because of the euro, which has a systemic hole in the middle of its heart: member states do not control the currency in which they issue debt.

On banking union, as we mention in paragraph 22 of our report, it was a big mistake that the third leg of the stool, the deposit guarantee mechanism, was dropped. That three-legged stool, which had a bit of strength and balance, is now a wobbly two-legged stool.

It is also interesting to note that some of the Governments that helped solve the 2008 crisis are now in deep trouble themselves and need helping out of the mess that they have got into. Looking back, like many people I was rightly angry at the way that some of the bankers had behaved—but they were a small minority. They took us right to the brink, and caused and are still causing a huge amount of pain. Undoubtedly, however, there has been more regulation than was necessary in those areas that needed attention. The solution to the crisis, which rightly started out at an international level, was expanded considerably at the EU level. Some politicians fed the flames of the anger I have described. Doubtless we all recall the words of President Sarkozy of France at Davos in 2011, and what he said pleased the press and the anti-bank movement a lot.

Bankers were blamed for everything, and when the witch-hunt has started, it is very dangerous to behave or even look like a witch. The result was that the repercussions went way beyond the banks, and most financial service industry and even non-financial firms were caught up in the “Barnier Bible”, Commissioner Barnier’s 41 pieces of legislation. As the noble Lord, Lord Harrison, said, some of the resulting legislation was ill-conceived and due to political pressure; we mention that in paragraph 5 of our summary.

Once the ball was rolling, there was no stopping it. However, I find some comfort in noticing the difference between Commissioner Barnier’s approach and that of the Commissioner my noble friend Lord Hill, whose stated objective is to have the minimum amount of regulation. Let us remind ourselves that 400 of Commissioner Barnier’s regulations have yet to pass into law. Let us also not forget that prior to the financial crisis and the introduction of all these heavy regulations, the City of London was a big contributor to the tax receipts of HM Treasury and the Government. The new rules have substantially reduced the profit of the financial institutions and hence their ability to pay tax.

In the committee we discussed an ongoing concern: namely, what is the UK’s input into all of this? It is hard to judge, but we are reassured by the Government that HMT was fully involved. My experience is that it tends to be more involved than it is given credit for, but I remain sceptical. Even this morning, evidence was taken from the Financial Secretary, David Gauke. It was on a different subject, but he said that there is no Government involvement at all—and that is with the own resources of the European budget. That is a serious concern, and it shocked all of us in the committee that he was so blunt about it.

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However, if the UK had serious input into regulations and directives such as MiFID and AIFMD, why are they so burdensome on the industry with no good effect? In our recommendation in paragraph 164 we deal with proportionality for smaller firms, some financial service providers and non-financial firms. While it is perfectly true that having one regulator for the whole of European business is of huge benefit for our global investment firms, the smaller national firms are being severely compromised by the increase in regulation and the cost involved.

I gave an example of a firm in the debate on the Queen’s Speech when I spoke on 4 June in col. 612. I now add that that firm has had a fourfold increase in compliance administration personnel in the last four years and that its annual spend on insurance and regulation this year is up 40% on 2013. With all the extra regulations to come, there is a continued state of change, challenge and fear for small companies.

Were the Government aware of the consequences of these regulations? Does my noble friend Lord Ashton agree that that business could not set up today because of the costs and extra regulatory burden, and that we are already witnessing an amalgamation of firms into even larger companies in order to stay in business? The consequent lack of choice and diversity is bad for the market and for Europe in general. The implications are more severe for the UK than for other member states—as the noble Lord, Lord Harrison, rightly reminded us, we are the financial centre of Europe, and if we suffer, so does the rest of Europe. What discussions have Her Majesty’s Government had with the Commission to correct these excessive burdens?

I, too, must touch on chapter 3 of our report, which deals with the European supervisory authorities. In response to our report, the Government stated that the ESAs will need to continue to ensure that their rules are proportionate and do not overburden industry and regulators with unnecessary guidelines and standards. Who is doing that? Who is keeping a check on the regulators at European level? There is also concern at national level that our regulators are vying with each other to show their virility. Issuing the biggest ever fine is undoubtedly good news for their reputation and pleases those who are against the financial services industry. We need to keep a very careful eye on this. How is my noble friend controlling our national regulators?

Misconduct can be handled in a number of ways, and we have seen some horrific displays of misconduct in financial services. My noble friend will be aware that the Fair and Effective Markets Review, launched by my right honourable friend the Chancellor of the Exchequer and the Governor of the Bank of England in June 2014, has just reported. This is an important area. An effective market and an effective form of behaviour can reduce the amount of regulation. What are the Government doing to encourage the Bank of England and the FCA to promote their report globally, so that there is an international agreement? When are the report’s recommendations for the UK going to be implemented?

I was very fortunate to serve on the committee at a time of such an interesting revolution in the way the financial services industry in both Europe and the

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world has changed. As I said at the beginning of my speech, my thoughts have hardened: too much has happened in too big an area, and although the consequent fallout has yet to be fully felt, when it is, we will be all the poorer for it.

5.48 pm

Lord Flight (Con): My Lords, I have much enjoyed the four years I have spent on the committee. As the noble Earl, Lord Caithness, pointed out, there was a wide range of views but we never had any problem in reaching compromise and agreement. The quality of the reports we produced and the use to which they were put were significant: they have had an impact not just in this country but throughout the EU. I thank the noble Lord, Lord Harrison, for the civilised, human and excellent way he chaired the committee, and our excellent clerk, Stuart Stoner, and the rest of the staff.

The committee was really one of the only places where European law and directives got any sort of scrutiny at all in this country. It was hard work grinding through it all—nearly every week, yet another provision had to be addressed and the Government advised about it. It was indeed a never-ending stream.

I learned a lot from my membership of the committee. In particular, I well remember a visit to Frankfurt and Berlin. I was very keen to ascertain Germany’s position on the basic argument that if the euro is not to fall apart, Europe needs to come together politically and economically, and it needs a system of transfer payments from the more successful and more competitive economies to the less successful economies. However, the universal answer that came from Germany was “Not a pfennig”. There was an absolute “no” to any form of transfer payments to the less successful parts of the EU. I am afraid that, to me, that means that the euro will not be able to succeed as a currency and will go the way of the last European currency, which was in place from 1863 to 1893.

A second point about Germany that I found quite extraordinary was the failure to understand that if you take austerity measures which grind an economy into the dirt—leading, for example, to a collapse of 25% of GNP, as in the case of Greece—you are likely to get a nasty political reaction. Of course, the Treaty of Versailles after the First World War did just that to Germany, and Germany had a most unfortunate political reaction in its turn. However, the Germans seemed not to understand that point at all.

Turning to the report, I think we can say that it is a very professional, thorough and useful chronicle of EU regulatory initiatives and policy since 2008. As the noble Lord, Lord Harrison, pointed out, there was what I would call some polite criticism of a fair amount of what we felt to be overkill and perhaps wrong, but the report certainly refers to the main flawed items at that time. The great objection to AIFMD was that it was introduced to attack hedge funds but ended up embracing perfectly straightforward investment trusts and virtually anything other than a UCITS, imposing a huge and expensive body of work and reports that nobody reads. The bank remuneration arrangements simply serve to raise fixed salary costs to banks, which is hardly desirable, and we have not yet lost the threat of a financial transaction tax.

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Although I agree with the report that much of the regulation would have been enacted in the UK anyway and that it was not specifically an EU initiative, I do not really agree that all the new regulations that have been introduced are needed or proportionate or that they achieve anything very much. I think that there has been a misguided and often wrong reaction to the financial crisis, particularly in Europe, where most of the problems have been about the euro, in contrast to the specific banking problems that this country experienced.

I like to try to step back and look at the enormous increase in regulation in recent years and to ask what it is contributing. We have gone down a route of extraordinary micromanagement and prescriptive regulation, the costs of which—ultimately passed on to ordinary savers and companies—are enormous. We have three layers of initiative: the international and US layer and the EU layer, and our own UK gold-plating of much that comes from both those sources.

Professor Gower would turn in his grave if he could see what has happened to the very sensible regulation which he introduced. His basic principle was about principle and about encouraging integrity. The plethora of overprescriptive regulation serves almost to remove the whole fundamental issue of requiring principled conduct and integrity. It is all about thousands of different rules and asking whether they have been complied with correctly. We now have a plethora of new bodies, with people not understanding what most of them are about. We have the FATF, FATCA, the FSB, the FSE, the ESAs, ESMA, MONEYVAL, the EBA and the JMLSG, to mention just a few. In 2001, the FSA had a staff of just 600; today, the FCA has 4,000 staff and the PRA more than 1,000. Coming down the pipeline are 420 pieces of EU level 2 legislation to be introduced. Within the financial services industry there are about an extra 100,000 people working as compliance employees. The FCA now has 16 handbooks of rules with 4 million words and, as I have said, huge costs are imposed, ultimately on the customers of the industry and often to little point.

To my mind, it was a mistake for the UK to surrender sovereignty in financial services to the EU. Of the 20 main measures of the last decade, I think that approximately half would have happened anyway and half very much reflect specific EU policies and objectives. There is a big issue that, although 28 EU countries—maybe it is more than that now—control the legislation, 22 of those countries have no skin in the game.

I have talked about the problems of the AIFMD. Another area that needs to be mentioned is MiFID II, which is now imposing upon what we used to call stockbroker private client activities some, I think, quite ridiculous requirements. Just yesterday, I heard of a case where an individual went along wanting a significant amount of wealth to be managed and was given 120 pages to digest and six different forms to sign—he ended up walking away saying, “You must be mad if you want me to try to digest all this and sign anything”. Also, unless older clients specifically say that they require a bold investment approach, they are put under what is viewed as a more cautious approach for older people, and that means a significant amount

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of government bonds—arguably government bonds are about the highest risk investment category for the next five years, as and when interest rates return to normal.

The latest issue, and since our report, is the EU fourth AML directive. I wonder whether Members of this House are aware that everybody now will become a politically exposed person. If you are a PEP, your bank has to monitor every transaction over your account and, if anything looks to be slightly out of the normal, report it as a potential source of corruption. The cost of doing this sort of thing is absolutely enormous. That is why banks are increasingly sacking their PEP clients. But PEPs are not just Members of the other place and of the House of Lords—they are their spouses, their children and their parents, if alive. It is a completely and utterly ridiculous system that has been brought in, particularly when I think that the power of Back-Bench Members of Parliament and working Peers to engage in corruption is virtually non-existent anyway —so watch out.

It is now also very difficult to do business with many emerging economies. If those emerging economies do not meet the required FATF standards, the bank of an exporter cannot accept payment from the bank of the company in the emerging economy to which they are exporting without an enormous process of assessment as to whether that bank is a proper institution. It is becoming more difficult as a result to export to many emerging economies.

I wish my noble friend Lord Hill success with his capital markets directive. That has been one of the really positive initiatives in recent times. But even with that there is a problem, in that the principle of the EU is that financial products and investment funds should not be marketed to ordinary citizens, because it does not think that they can understand them adequately, other than USIT funds. For example, it is making it very difficult to promote debt funds to attract investors, where SMEs in particular very much need additional finance. ESMA is trying to regulate 95% of market-making activities, which will purely clutter up the market.

However, there are even bigger, wider issues. The single market is in many ways about protection; it is about keeping out of the EU market other than EU-based products and institutions. It is no wonder that a lot of large players rather like the system, because if you are part of a cartel in a protected market, what could be better? You certainly do not want the competition of institutions from America or Hong Kong.

Those who like a command economy, having failed to achieve that in government, have moved to the regulatory sector, where they have had a heyday in introducing command economy measures. It is not just in financial services; there are now more people working in DfID than there are farmers left in this country.

I understand that part of the Government’s renegotiation agenda is to seek to acquire for the UK a veto over directives relating to the financial services industry, just as France has such a veto in relation to its biggest industry, agriculture, and Germany in relation to engineering.

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Lord Liddle (Lab): It is not the case that France has a veto in relation to the common agricultural policy, as I think the noble Lord well knows. All the decisions on the reform of the common agricultural policy have been taken by majority voting in the Council of Ministers. Of course, the council tries to take into account the views of member states which have particular interests. Surely he would acknowledge that, in the case of financial services, that is what has happened with Britain: our interests have been taken into account by the council.

Lord Flight: I would have thought that what I have just said demonstrates that what I call sensible interests, including our interests, have often been overridden. With regard to agriculture, while I am well aware that the overall reforms of the system have been pan-EU, I think that France still has some protective vetoes. We will see whether this is correct, and what the negotiations are able to achieve.

I am critical also of the UK. There has been a lot UK gold-plating of what has come to the UK both internationally and from Europe. The introduction of RDR has simply removed financial advice being available to 70% of the country’s population, as a result of which the Government are struggling with providing guidance on pension fund services and leaving people hanging in mid-air as to who they might approach to manage their pension assets.

There is the need for an independent new appraisal of what regulation in the EU and even internationally is good and useful for markets and for clients, and what is unnecessary, harmful, and incurs a cost and adds no benefit. I would like to think that the UK will give an EU lead to reform of regulatory overkill and I wish the noble Lord, Lord Hill, enormous good fortune in his commitment to review the cumulative effects of the various regulatory reforms.

Lord Liddle: Does the noble Lord accept that the Commission has just produced precisely what he is asking for? Commissioner Timmermans has put forward a whole set of propositions on regulatory reform and on reviewing existing legislation to make sure that unnecessary regulation is cut back. The noble Lord, Lord Flight, appears to be making statements without full regard to what is happening currently in Brussels.

Lord Flight: I am aware of what is happening in Brussels but I specifically said that I wanted to see the UK more active in terms of a programme of regulatory rationalisation and review. The key point I am seeking to make is that when I stand back, I perceive what I believe to have been enormous overkill, often not addressing the right areas, since the 2008 financial crisis.

6.05 pm

Lord Davies of Oldham (Lab): My Lords, the House has long appreciated the chairmanship by my noble friend Lord Harrison of this committee and the series of reports which have been of great use to noble Lords in informing us on crucial economic issues. I thought that I had a straightforward job this evening, which

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was to welcome certain parts of the full report—I have some reservations, of course—and to congratulate my noble friend on his chairmanship and on producing it. Now I am absolutely astounded as to how on earth he manages to sustain calmness in a committee which it seems has at least one representative, and probably two, who ought to have written a minority report saying that they would never have started from here and they largely do not agree with anything to do with regulation. In fact, they do not even think that the financial crisis was caused in this manner and therefore a totally different subject ought to have been tackled. I am afraid that the House can scarcely be expected to indulge in such a wide-ranging debate, and indeed I have not come armed to tackle that position—except to say to the noble Lord, Lord Flight, and to a certain extent the noble Earl, Lord Caithness, that they must recognise that this report is on the post-crisis EU regulatory framework. What crisis do they think the report is referring to?

Surely we are dealing with the financial crisis which affected the whole of the western world and caused repercussions much wider than that. It is only right that the European Community, in the same way as successive British Governments, should have set about the task of bringing in regulation against circumstances which the noble Lord, Lord Flight, must recognise. The morality that he thinks is held in a handshake of agreement between gentlemen in the City just does not hold in the present day. In fact, the attitude where such trust was held at the time clearly led to circumstances in which people could betray it in such a way that whole economies in Europe and, I might add, most of the western world and the United States, crashed in the face of banks going down. That is the measure of the crisis, so it is not surprising that my noble friend Lord Harrison chaired a committee report on financial regulation. I do not think that the Minister should be asked to respond to a widespread debate on whether regulation is needed at all. I would have thought that we have enough evidence in that respect.

That is why the committee has examined the European supervisory agencies which oversee the regulatory framework and has found a great deal of their work to be satisfactory, but has also made it clear—not just on this occasion but in the past as well—that these bodies will need considerable resources to carry out their tasks properly. That is a recommendation in the report. I do not know whether the two noble Lords have dissented from that position, but the nature of their contributions to the debate suggest that they actually have. However, the report from the committee addresses itself to that issue, and that is what is before the House today.

We know, as my noble friend Lord Harrison said, that there are areas of proper disagreement. We recognise that the financial transaction tax is an issue of considerable disagreement both in our economic, financial and political circles and, of course, in certain parts of Europe. Certainly, the current proposal is not acceptable to many. As my noble friend Lord Harrison indicated, the committee wondered what progress had been made on the financial transaction tax. We are not quite sure where the discussions on that very significant issue are. There is clearly a considerable body of opinion,

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not just in Europe or in the United Kingdom. My own party has a real interest in financial transaction tax. The United States, too, is interested in the way in which Governments can receive necessary resources from a very wealthy section of their economy which, of course, looks as if it could afford further levels of taxation.

We have a real interest in these European issues. If one thing stands out from the crisis facing Greece at present it is the question of financial regulation. That has an impact on the UK, too. We cannot shy away from the issue. We had a Statement earlier this week showing the Government’s proper concern about the situation in Greece. Why was that Statement made? It was because the UK has a very real interest in the success or failure of economies in Europe. If the Greek crisis goes to its worst position, we are conscious of the fact that there will be an impact on the British economy. As for our citizens, it must be recognised that we are effectively sending out emergency messages to so many of our people who either live in Greece or may be travelling to Greece on holiday. They are at risk because of the crisis. That is why we need to look at these issues, and why we should be grateful to my noble friend Lord Harrison and his committee.

We do not need to get sidetracked today into whether there needs to be regulation from Europe on the financial sector. The report also emphasised the fact that we have a prominent figure who is central to the success of European initiatives in this respect. I am referring to the noble Lord, Lord Hill, whom we all valued for his contribution here as Leader of the House. He is in the Commission, involved in the crucial area of financial and economic matters. Of course, therefore, we hope that he will be able to use influence to give guidance in circumstances where we all recognise that a great deal needs to be traded.

There is a whole other dimension to the report on which there may be some disagreement, but I hope that the Minister will address himself to it. The report says:

“One of the overriding concerns of our witnesses was that the legislative framework had been focused too much on stability rather than growth”.

I am not surprised that there is an emphasis on stability when absolute chaos descended upon us all for a number of months during the financial crisis. It is also clear that we will need action and regulation that promote growth, too. That was put to the committee. I hope that the Minister will address that matter as well. In addition, there was the issue of the capital markets union. We hope that there will be a constructive response to the ideas implicit in that.

The wider issue is quite clear: in the coming months and years we need to ensure that the United Kingdom’s voice is used essentially to help to create a post-crisis framework that guarantees, as far as we are able, that nothing like the circumstances that we went through in the last decade affects our country, Europe and the wider world again. We have to be a constructive and active member of negotiations.

I recognise that the Minister will not accept every point in the report. Nevertheless, the Government’s response to the report is extraordinarily welcoming.

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In fact, I have great difficulty recalling a report where so many commendations were made on the salient conclusions reached by it. Yet, here we are being sidetracked into a debate as if the report has no real credibility at all. I think that it does and that the Government recognise that it does. I therefore hope that the Minister will respond to the salient and constructive points in the report, rather than being sidetracked into what I regard as a minority viewpoint expressed by noble Lords. They certainly have every entitlement to their views, but this is not the occasion on which they should have been expressed in quite that manner.

6.16 pm

Lord Ashton of Hyde (Con): My Lords, I thank the noble Lord, Lord Harrison, for his five years chairing the committee and for producing the report. I also thank the other committee members for their preparation of this comprehensive report. Of course, I thank all noble Lords for their contributions.

The UK is home to some of the world’s most successful and competitive financial firms, benefiting businesses and working people across the country. It is therefore right that we remain focused on the legislation that provides the framework within which businesses and customers operate. It must provide the foundations to ensure that the financial services industry plays a leading role in creating jobs and generating growth, delivering for customers at every stage of their lives, but it is must also provide the foundations to ensure that the sector remains strong and stable.

We are emerging from the worst economic crisis in living memory—a point well made by the noble Lord, Lord Davies of Oldham. It is important to remember that context when considering the significant volume of EU financial services legislation since the crisis. I particularly draw the attention of my noble friends Lord Caithness and Lord Flight to this. In making their criticisms they have to bear in mind the situation pertaining and which we are addressing, and the chaos and misery that it caused to many people in the European Union. It was crucial that we acted quickly and decisively to shore up the financial system and then put in place measures that aim to ensure that we never face such a situation again.

There have been benefits: an increase in transparency; a more level playing field across the EU for financial actors; the tools to end the adverse relationship between sovereign countries and bank, to ensure that taxpayers are never again in line to bail out banks; and a more stable financial system. However, the speed of action and complexity of issues means that there will be some unintended consequences.

I shall now address some of the points that the noble Lord, Lord Harrison, made. He asked for the latest on the so-called Juncker plan, also known as the European fund for strategic investments. I can report that the 25-26 June European Council approved the fund and called for its rapid implementation.

The noble Lord, Lord Harrison, also mentioned the committee’s finding that the UK’s influence in Europe was diminishing. We continue to be an active and influential member of the EU and have many

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examples to prove that from building a coalition to deliver the first ever reduction in the EU’s budget to delivering fundamental reform of the common fisheries policy. We are at the heart of the debate on interests that matter most to the UK but I accept what the report said. The Government will definitely consider those views addressed in it.

Both the noble Lord, Lord Harrison, and the noble Lord, Lord Davies of Oldham, asked for an update on the financial transaction tax, which has many problems as far as the UK is concerned. The UK believes that the Commission’s proposal is unlawfully extraterritorial. We also believe that the proposal is technically flawed. Following this lack of agreement, the 11 participating member states have committed to finalising a watered-down first stage of the tax covering shares and some derivatives by the end of this year. The Chancellor will not hesitate to challenge in court the final FTT directive if our legal concerns are not addressed.

My noble friend Lord Flight talked about gold-plating. I draw his attention to the bit in the report which said that arguments about gold-plating in the UK are “finely balanced”. He also mentioned the fourth anti-money laundering directive. We have been in regular discussions with the private sector to take its concerns into account both throughout the year and prior to making any amendments to the regulations. This directive has been agreed by all EU member states and was published in the EU OfficialJournal in June 2015. The Government are required to transpose this directive into UK law and we intend to run a full consultation prior to the next set of amendments that are due to come into force by June 2017 at the latest.

Finally, my noble friend Lord Flight mentioned politically exposed persons for UK purposes. The revised global standards, to which the UK is fully committed, require that they be treated as politically exposed persons on a risk-sensitive basis. The revised standards require that for all foreign PEPs enhanced due diligence is required. Domestic PEPs will be subject to enhanced due diligence and ongoing monitoring when the business relationship is assessed as high-risk. The Government seek a risk-based approach to the application of this requirement in negotiating the fourth anti-money laundering directive.

I turn to the report and again thank the noble Lord, Lord Harrison, and the committee for their work, which I believe constitutes a useful and valuable contribution to the debate on financial services regulation within the EU. The Government agree with the committee’s recommendations on the need for reviewing the financial regulatory framework following the upheaval in recent years. Under First Vice-President Timmermans’ Better Regulation Package, as mentioned by my noble friend Lord Caithness, the Commission has moved to strengthen its programme that assesses the existing stock of EU legislation to make it more effective and efficient. The Government also strongly welcome the plans of the noble Lord, Lord Hill, to undertake an assessment of the cumulative impact of financial services legislation.

The Government also agree with the committee’s calls for improvements to the Commission’s approach to impact assessments, which was the first question of the noble Lord, Lord Harrison. We particularly welcome

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Vice-President Timmermans’ proposals to lighten the regulatory burdens for small and medium-sized enterprises. I say to my noble friend Lord Caithness that the Government acknowledge the important role that small businesses have in supporting the economic recovery. We are committed to creating the best possible environment for a sustainable private sector. This includes our approach to EU legislative proposals, where there is a commitment to the “Think Small First” principle when preparing initiatives, including lighter regimes for SMEs in new legislation and exemptions for microenterprises. Vice-President Timmermans’ proposals on better regulation include guidelines for mandatory SME and competitiveness tests in all impact assessments, and we particularly welcome these proposals. These are welcome steps in the right direction. The Commission must now deliver on its proposals to improve the process of EU lawmaking.

My noble friend Lord Flight mentioned the alternative investment fund managers directive. The Government recognise that this has imposed new costs on the alternatives sector, particularly managers above the AIFMD threshold. This underlines the need for better impact assessments and improvements to the better regulation agenda.

Turning to the European supervisory authorities—ESAs—it is clear that they are an important part of the European regulatory framework. They have been tasked with a significant workload and they have performed well under difficult circumstances. We fully agree with the report in these respects. Given the large amount of secondary legislation the ESAs have had to deliver since their inception, it is understandable that they have been focused on the creation of the single rulebook, but we believe that, as the flow of post-crisis legislation slows, they should focus on delivering other parts of their mandate, such as pushing for greater convergence in supervision, ensuring consistency and raising standards. They have a crucial role to play as system managers and in improving supervisory standards across the single market.

However, one area where the Government disagree with the conclusions of the report is on additional funding for the European supervisory authorities. The report recommends that additional funding should be given to the ESAs to fulfil their mandate. The Government believe that, at a time when Governments across the Union are tightening their belts, it is not appropriate for the ESAs to seek large increases in their funding. The Government are convinced that, through proper prioritisation of their work, the ESAs can deliver against their existing mandate with their existing funding.

The Government join the committee in welcoming the work of the Financial Stability Board on tackling “too big to fail”. It is clear there have been positive developments in the EU and internationally. The stabilisation of the banks through the implementation of capital requirements under Basel III through the EU’s fourth capital requirements directive is one good example.

I also ask noble Lords to note the publication of the final report of the Fair and Effective Markets Review, which was mentioned by my noble friend Lord Caithness. The review, established by the Chancellor,

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made far-reaching recommendations to improve the fairness and effectiveness of wholesale fixed-income, currency and commodity markets. Given the global nature of these markets, we will be taking forward several of these recommendations internationally, including with the Financial Stability Board and the International Organization of Securities Commissions. The review warmly welcomes the Bank for International Settlements’ work to create a single global FX code. The review has worked with colleagues from other central banks to develop a work programme that will deliver a robust set of standards. It has recommended that once the global standards are in place, the UK backs these standards with a new regulatory regime for FX spot markets. Given that the same standards should be upheld in all jurisdictions, this should not affect the UK’s competitiveness.

Indeed, ensuring global regulatory consistency is essential in stopping the build-up of risk from the variation of reform, regulatory arbitrage and market fragmentation, and the UK continues to play a significant role in the international push for a stable, safe and globally regulated financial system. But we also need a smart regulatory approach which also recognises that in some cases member states can be best placed to determine what regulation is appropriate for their markets.

The Government understand that the euro area is moving towards greater integration, and that this has implications for the UK. The committee’s report rightly notes the risks to the UK of further eurozone integration. We have consistently recognised the wish of euro area member states to achieve closer economic and fiscal integration to strengthen the single currency. The crisis unfolding in Greece has underlined the desire—and, indeed, the need—for collective action across the euro area in times of difficulty.

A stable and growing eurozone is in the interests of all EU member states, including the UK. At the same time, the Government have been clear that we will not be part of this closer integration. We have, however, been closely involved in the negotiations, particularly over banking union, to protect UK interests. The UK continues to be an active and influential member of the EU and the Government continue to be at the heart of the debate, working closely with other member states, including euro area member states, on the key issues of the day—improving Europe’s competitiveness, the single market and trade.

The report states that while the UK’s expertise in financial services is respected, the UK’s influence over the legislative process is diminishing. While I appreciate that there is always more that can be done and welcome the constructive recommendations in this area from the committee, the Government have secured positive outcomes for the UK, at times having to fight hard for them. For example, the Government have successfully worked with our European partners to introduce tools for resolving EU banks that are credible, workable and closely aligned with existing UK legislation, through the bank resolution and recovery directive. We have also secured flexibility for the UK to implement its macroprudential regime, within the scope of the capital requirements directive IV proposal, and exempted British pensions from new rules on disclosure for investment

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products. Where the Government thought that EU legislation was at odds with the treaties, we have challenged it in the courts as we have on short-selling, the financial transaction tax, location policy and the bonus cap.

There are some questions I am afraid I did not manage to get hold of but I remember one in particular from my noble friend Lord Caithness. He asked: what am I doing to control the regulators? The answer is that the European supervisory authorities are held to account through their respective boards of supervisors, where the FCA and the Bank of England are represented. Domestically, the FCA and the Bank are held to account by the Treasury Select Committee, Her Majesty’s Treasury and Parliament. Regulators need to be independent to serve as a second pair of eyes for the single market.

As the Prime Minister has set out, and as the noble Lord, Lord Davies, mentioned, we need to make the EU a source of growth, jobs, innovation and success, rather than stagnation. We strongly support Mr Juncker’s vision of a well-regulated and integrated capital markets union of all 28 member states which maximises the benefits of capital markets and non-bank financing for the real economy. We fully agree with the committee that the concept of capital markets union should be welcomed. It is a project to which the UK is fully committed. But if the single market is to continue to be a driver of growth, European legislation must focus on finding the right balance between enhancing the EU’s competitiveness in an increasingly global environment, promoting growth, maintaining stability and protecting consumers. We need strong regulatory standards applied internationally but this also means proportionate and consistent legislation that continues to decrease barriers between member states and recognises that, in some cases, the responsibility for regulating markets best falls to member states themselves.

I therefore repeat my thanks for noble Lords’ comments and the committee’s review of the regulatory framework since the financial crisis. The Government can safely say that by far the majority of its recommendations were accepted. I counted at least 23 out of 33 recommendations that were accepted without any qualification; even some of the others were accepted with some qualification. Generally speaking, the Government accept the review and warmly welcome it, as I warmly welcome the insights of noble Lords this afternoon.

6.33 pm

Lord Harrison: My Lords, in concluding the debate I remind my colleague the noble Earl, Lord Caithness, of something he said to us when we embarked upon this report: that he hoped it would become a textbook for those who seek to discuss these matters in future. I believe that we have achieved that. I thank my noble friend Lord Flight for his comments and for the PEP talk that he gave us in the midst of them.

I thank my own Front-Bencher, my noble friend Lord Davies of Oldham, who has wielded this responsibility over many years, for sympathising with me over the sometimes choppy waters that we on the committee experienced in dealing with financial affairs. However, we were always united in having the proper

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and right approach. I hope the noble Baroness, Lady Falkner, during her reign of the tricky committee that is the financial services committee, also experiences the calm that has been displayed here this evening in helping the UK resolve some of the really challenging and important points that are being made to us about the future.

Motion agreed.

Health: Children and Young People

Question for Short Debate

6.35 pm

Asked by Baroness Hollins

To ask Her Majesty’s Government what steps they are taking to safeguard the physical and mental health of children and young people.

Baroness Hollins (CB): My Lords, this is the first debate that I have spoken in with the noble Lord, Lord Prior, and I welcome him, rather belatedly. I refer to my interests in the register. I am also grateful to other noble Lords for agreeing to speak in this debate, given the lateness of its timetabling only last Thursday.

I begin by reminding noble Lords that most factors that influence child and adolescent physical and mental health lie outside the health sector and that a preventive approach is essential to secure the best outcomes. Health outcomes, social achievement and resilience in adult life are largely set during the developmental period: in the first 18 years of life and particularly in the first 1,001 critical days from conception to age two. Even before conception, maternal behaviour can have long-term consequences for a child’s health and well-being. I am thinking here, for example, of foetal alcohol syndrome, which is the leading preventable cause of disability in children, and the need for women to be better informed and to discontinue drinking alcohol before conception. At the moment, government advice on the matter of alcohol in pregnancy is less than clear.

I would like assurances from the Minister about three key issues, which interweave with the other issues that I will go on to discuss. First, will the Minister assure the House that the Government intend to improve the collection of outcome data, including a child-led outcomes framework such as that requested by the Coram Foundation? This would enable us to better understand the scale of the problem, to plan services and to monitor progress. It would also allow children, young people and carers to express the outcomes that matter to them, because they are the recipients of care.

Secondly, will the Minister commit to focusing on preventive measures in all policy relating to children and young people? This should be targeted both at high-risk individuals and families and at a public health level, because this matters to all children and young people.

Thirdly, will the Government invest in early intervention systems and strategies in both physical and mental health? When things start to go wrong, there is less distance to travel back to wellness and health than once

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a chronic condition has set in. We see this all too frequently in child and adolescent mental health services—CAMHS—and with childhood obesity.

The BMA has called on the UK Government to adopt a “health in all policies” approach, whereby health is incorporated into all their decision-making areas. I ask for this to always include a particular focus on the 25% of the population who are children and young people, even where a policy may, on the surface, seem to relate only to adults. The BMA has highlighted that austerity measures and welfare reform disproportionately affect families and children. Disabled children feel the effects even more. Is it not time that the impact of austerity and funding cuts on the availability of children’s health services should be objectively monitored?

We know that childhood poverty has a significant negative impact on children’s longer-term mental and physical health life path. We also know that at least half of all mental illness starts by the age of 14 and probably more than three-quarters by the age of 24. The total economic and social cost of mental health problems in England alone is estimated to be £105 billion, and mental health problems are the leading cause of sickness absence in the UK. With such a clear link, it seems unfathomable that 3.5 million children live in poverty in the UK, according to Barnardo’s.

The BMA Board of Science report, Growing Up in the UK, published two years ago, advocated a life-course approach to child health where health and well-being are integrated on a continuum. As I said, this begins prior to conception, by ensuring the optimum health for the mother, and runs through to adolescence. The report made a wide range of recommendations that remain relevant, including that there should be an annual report on the health of the nation’s children with accountability at ministerial level for children’s health and well-being. Are the Government planning to develop a national children and young people’s health strategy, as recommended even more recently in the 2014-15 report of the Children and Young People’s Health Outcomes Forum? I should express a little disappointment that the Five-Year Forward View hardly mentions children in any of the areas identified as a priority.

Secondly, the BMA report stressed that children’s services should be family centred, with a focus on the importance of parenting and treating the child and family as a unit. The Department of Health’s own report, Future in Mind, advised evidence-based programmes of intervention and support to strengthen attachment between parent and child, avoid trauma, build resilience and improve behaviour. I am pleased that there is increasing recognition from Government on this issue of early years intervention. The cross-party manifesto The 1001 Critical Days places an emphasis on pre-conception until the second birthday as a period to dramatically improve outcomes in childhood. I hope the Minister will support its recommendations.

Prevention is always better than cure, but it also worth noting that infants, children and young people regularly use NHS services and account for about two-fifths of a typical GP’s workload. I will use mental health and obesity as two examples where early intervention should be prioritised once things start to go wrong.

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Parity of esteem with respect to mental and physical health should be aimed for with children and adolescents just as much as with adults. Remember, there is no health without mental health and separating the two just does not work and is not cost effective. Considerable investment in child and adolescent mental health services will be needed to ensure sufficient specialist counsellors are available locally. Freedom of information requests by the charity Young Minds found that more than half of councils in England cut or froze budgets for CAMHS between 2010 and 2015. That had a detrimental effect on the early intervention and prevention capacity of child and adolescent mental health services. Cutting their budgets means that the threshold for treatment has become much higher and many CAMHS must now concentrate on acute crises in adolescents and have little capacity for family interventions with younger children with severe emotional and behavioural disturbance. That goes against all the advice coming from the professional bodies and the Department of Health.

Despite having one of the most advanced health systems in the world, child physical health outcomes in the UK are among the poorest in western Europe. If we compare ourselves with Sweden, the country with the lowest mortality for children and young people after controlling for population size among other variables, we find in the UK that every day five children under the age of 14 die who would not die in Sweden. That equates to the alarming figure of 132,874 person years of life lost each year in the UK, the majority of which would be as healthy adults contributing to the country’s social and economic strength.

Childhood obesity is another key area where preventative work in physical health needs to take priority, as it also causes diabetes and heart disease. The BMA and the Royal College of Paediatrics and Child Health have expressed serious concern about the rapid rise in rates of obesity. A new BMA report to be called “Food for Thought: Promoting Healthy Diets among Children and Young People” will be published later this month. The report will call for the appointment by government of one person to drive a co-ordinated obesity prevention strategy. I urge the Minister to give serious consideration to widely supported recommendations that a strong regulatory framework should be central to the approach to reducing the burden of diet-related ill-health in the UK.

The Prime Minister publicly expressed his concerns over the commercialisation of childhood and commissioned the Mothers’ Union to report on it. The report by Reg Bailey Bye Buy Childhood generated considerable media coverage, with many commentators expressing serious concern over the targeting of children for commercial benefit. Children and young people, as well as adults with learning disabilities, are particularly exposed and vulnerable to a range of food and drink marketing tactics.

While there have been some notable improvements in measured health outcomes for children and young people over recent years, the evidence is telling us that the rate of improvement is slower than it should be. The infrastructure for the delivery of clinical research in the UK is unparalleled internationally. However,

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the RCPCH report

Turning the Tide

identifies a continuing imbalance between research that targets adults and research that addresses the needs of infants, children and young people and calls for an increase in the number of child health research posts in the UK and a designated fund for child health research which must address mental and physical health.

Safeguarding has two meanings in this debate, one being the need to safeguard health outcomes, but it would be strange for me not to mention child protection concerns. So many children in the UK have been sexually abused. It is shocking that the scale of child abuse of all forms led to the need for the introduction of the Modern Slavery Act 2015. This issue requires a debate all of its own to cover it adequately, but given the Prime Minister’s launch of a child protection task force, will the Minister commit to commissioning and introducing a standardised, compulsory multiprofessional safeguarding training programme for all professionals working with children and families across health and social care? This would need to have a centralised government point of accountability to prevent the fragmentation of responsibility caused by mandated responsibility written into the Modern Slavery Act 2015.

In closing, I will summarise my key areas of concern: outcome data relevant to children and young people are needed to allow us to assess the scale of the problem and track progress; preventive measures, beginning before conception, are needed in all policy decisions that affect children and young people, regardless of government department; and we need a commitment to early intervention strategies where there is evidence things are going wrong. While healthcare professionals clearly have a key role to play in improving child health, it also requires political will and leadership. With concerted action from government, we could make health outcomes for children and young people comparable to the best in the world.

6.47 pm

Baroness Stedman-Scott (Con): My Lords, I congratulate the noble Baroness on securing this important debate about children and young people’s physical and mental health. I hope I am not at risk of repeating some of the things that she said, but I hope she will take it as significant endorsement. I am not an expert on physical or mental health, but I have a lifelong interest in these issues, not least because I am a fellow of the Centre for Social Justice, which has spent more than 10 years researching the root causes of poverty and disadvantage.

These overlap to a very large extent with the root causes and effects of poor mental health. The National Audit Office has documented how young people who should be poised to make their mark on the labour market yet struggle with pronounced depression and anxiety are much more likely instead to be unemployed. Conversely, early episodes of unemployment can have lifelong effects not just on wages but on mental health. Working with Graham Allen MP, the Centre for Social Justice blazed an important trail in social policy by emphasising prevention rather than cure. The concept of early intervention when it is clear that deep and potentially intractable problems are brewing in a child

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or young person’s life is not rocket science but common sense, yet much government spending has been focused in the past on late intervention.

I am encouraged that there is cross-party consensus that that needs to change. Take the troubled families programme, for example, which built on Labour’s family intervention project pilots. The coalition Government estimated that £9 billion was spent per annum on disruptive and highly distressed families, but only £1 billion of that spend was helping them to turn their lives around and prevent further harm. The other £8 billion was used to mop up the mess: over three-quarters of a billion pounds was spent on health, for example, over £2.5 million on criminal justice and almost £4 million on safeguarding children and behavioural interventions in schools. And that was a conservative estimate: for example, the health spend did not take into account domestic violence and other A&E admissions, yet violence is a factor in around three-quarters of so-called troubled families.

While families in that category are in a small minority, the Government have recognised that many of the problems affect a large number of families, hence they have expanded the programme significantly. Surely they were influenced in doing so by the Riots, Communities and Victims Panel’s estimate that at least half a million families were teetering on the brink of considerable difficulties that were not simply financial.

All this is a preamble to my main point that if any Government are to safeguard the health and well-being of children and young people, they would do well to start with parents, strengthening and stabilising families and helping to prevent the relationships within them from breaking down. Government research shows that the poor outcomes of many children who experience family breakdown include poor mental and physical health, particularly depression, smoking, drinking and drug use in teenagers.

We know that a high number of under-18s cannot get local help when they experience a mental health crisis, further compounding their loneliness and difficulties. Either they are treated on adult psychiatric wards or they have to travel hundreds of miles across the country to receive hospital treatment. The Government and local health commissioners simply have to address this, but they also need to do far more to prevent mental health problems from arising in the first place.

Addressing our epidemic levels of family breakdown is vital. This is not an argument for families to stay together however abusive or conflictual the relationships within them, but it is a plea for recognition that adverse childhood experiences, many of which could have been prevented by working early with families, are like a child’s footprint in wet cement—they last a lifetime.

Standing back for a moment, it is important to acknowledge that families can greatly benefit society and boost a nation’s economic competitiveness, and to acknowledge the profound social and financial consequences when, for whatever reason, families fail. Family breakdown costs £48 billion per annum and disproportionately affects people in the poorest communities, where two-thirds of children do not grow up with both their parents, compared with two-fifths of children in more affluent areas, although that is still a high proportion.

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So while I applaud the Government’s launch of a taskforce to improve the mental health and well-being of children and young people, I also want them to develop a robust and comprehensive range of family policies, and to appoint a family champion who will drive and sustain this agenda—a Secretary of State with clear accountability for families who has the resource and clout to drive through a programme to strengthen families, boost stability and uphold fatherhood and its importance. This range of family policies must support all the main functions of families: family formation, and separation when that is inevitable; relationships between parents; and economic support for child-rearing and caring for older people. The family test introduced in 2014 is a great start but, while this views all departments’ policies through a family impact lens, it reacts to what other departments propose rather than being proactive in strengthening families.

A lot is being done already in terms of childcare: the CANparent programme; the troubled families programme; 4,200 extra health visitors and the doubling of family nurse partnerships; shared parental leave; family-based arrangements in child maintenance; an additional 10,000 family mediations; the marriage allowance, which recognises interdependence within couples; and funding for relationship support. Coming down the tracks, this Government have promised to increase income tax thresholds, provide better mental health support in pregnancy and introduce better measures to eliminate child poverty by recognising the root causes of poverty, including family breakdown.

However, a truly comprehensive approach to strengthen the family and prevent relationship breakdown requires ensuring that a family strand runs though practically every area of government. For example, the MoJ should encourage parenting and relationship support in prisons. Robust research shows that when offenders leave prison and are in a good relationship, that can help them turn away from crime, and their children are less likely to suffer bereavement and loss if they come back into their lives with a better idea of how to be good parents. BIS needs to look closely at what Lloyds and other employers are doing with regard to employee webinars on parenting and couple relationships. Helping employees cope with family worries reduces absenteeism, so the Government should be encouraging employers to help pick up the tab for relationship support.

There are many other examples across government, hence the family champion need not be someone heading up a department for families but could be like the Cabinet Minister for Women and Equalities. Alongside their main departmental role they would spend time on this responsibility, with the necessary governmental structures in place to ensure that adequate attention was given to it. For example, there should be a statutory duty to report on the extent to which family stability has improved or worsened on their watch.

Adequate and appropriate healthcare services are essential, but the welfare society begins in the home, and in children’s earliest years. It is essential that we focus our efforts on families and take a preventive approach to reduce demand—and deep human misery.

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6.56 pm

Baroness Walmsley (LD): My Lords, I thank the noble Baroness, Lady Hollins, for introducing this debate. I hope she will forgive me, but given the other recent debates on children’s mental health, I feel that I have said all I need to say on that subject for the moment, so I will concentrate on children’s physical health, although I am of course well aware that there is a major link between the two.

There is good news and bad news about the health of our children in the UK. On the good side, according to research from the King’s Fund and the LGA, some damaging health behaviours among children have halved over the past 10 years, with fewer children taking drugs, smoking and drinking alcohol. This is particularly good news, because we know that half of the big adult health-risk factors are initiated in adolescence, so if we can nip it in the bud at that age, we will save lives and money. Smoking is still a big killer in this country and is a particularly large factor in health inequality. Alcohol, too, is particularly harmful to immature livers, and abuse of alcohol also leads to other risky behaviours, so a reduction there is also very good news. The finding about drugs may or may not take into account the so-called legal highs, because the finding was up to the year 2013, but any improvement is good. The paper does not postulate a reason for these improvements but it could have been caused by an improvement in the standard of PSHE in schools. I still regret the fact that this life-skills learning is not mandatory in all schools but I concede that the last Government put a great deal more emphasis on it and took some of the good advice offered by the PSHE Association.

On the other side of the balance we have rising childhood obesity, many children who do not take enough exercise—for various reasons, including lack of facilities—one of the poorest records on child mortality in Europe, far too many unwanted teenage pregnancies, abortions and sexually transmitted diseases among young people, and poor children who can have up to seven years’ shorter lifespan than their well-off counterparts down the road.

Let us talk about obesity. I will not repeat the many and varied serious disease risks that result from obesity. We need to invest in prevention. I am a firm believer that good health begins at home—as does poor health—and that it can be reinforced by schools. Indeed, it is wise for schools to care about their children’s mental and physical health, because they affect academic achievement. Therefore, if we are to have a long-term effect on the health of the population, we need to start, as many noble Lords have said, with the parents, before birth if possible. Again, there are considerable inequalities here. The percentage of premature and low birth-weight babies among deprived communities is much higher than among the higher demographic groups. Some of this, as we were told by Simon Stevens this morning at a seminar, is due to the higher incidence of smoking in pregnant women, but not all of it. Poor nutrition, stress and poor antenatal care are contributors. Stress is a killer and is particularly damaging to the brain development of young babies and children, especially if it is caused by domestic violence.

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It is appalling that in this highly developed country, there are pregnant women who do not have access to good fresh food. There are food deserts: places where people cannot get to shops that sell good fresh food because there are none; moreover, they do not have the means of transport to get to one. The main problems, however, are the lack of cooking skills, and poverty. Cheap food tends to be highly calorific and low in nutrition. As we know, overweight mothers more often have overweight children—and so the cycle continues. I would like to see compulsory cooking lessons in schools and good-quality health education, through which children are taught how to eat well. Many schools have done really well on this. They have school meals staff who are passionate about providing fresh and nutritious food; in some places, they even grow it.

Of course, this requires leadership from head teachers, who have a lot of other things to worry about, but as I said, it pays dividends, because well-fed children learn better. That is why the Liberal Democrats in the last Government were keen to bring in free school meals for key stage 1 children. School meals in local authority schools have to be up to certain nutritional standards, which is why I want to ask the Minister why the Government do not insist that academy schools abide by these standards. Currently, they do not have to.

School food is particularly important for very poor families who may be in houses with poor cooking facilities, who may have had the electricity or gas cut off, who may be in bed-and-breakfast accommodation with no cooking facilities at all, and who may have chaotic lifestyles, meaning that the children do not have regular mealtimes. School food is therefore particularly important to poor children. We really need to pay attention to this issue for the sake of their future health.

You may ask why I am concentrating so much on food—apart from the fact that I like it. The reason is that if we instil healthy eating in children, we are carrying out a major preventive programme against heart disease, diabetes, strokes, musculoskeletal diseases and the rest. Given that resources are scarce and the population is both growing in number and ageing, this strikes me as common sense.

Let me turn from prevention to care. As the noble Baroness, Lady Hollins, said, 40% of GP visits are made by children, so those who suffer most when it is hard to get a GP appointment are children. The Government have a commendable ambition to reduce weekend mortality by making primary care services available seven days a week, but if this is done without more resources, by spreading out what is already there, the result could be disastrous. I have already mentioned our poor child mortality figures. Like the noble Baroness, I was horrified to learn that every day in the UK, five children die who would not have died if we had the same child mortality figures as Sweden. Will the Minister look into this? That is five family tragedies every single day that could have been prevented. If they can do it in Sweden, why can we not do it here?

I am also concerned about services for children with physical and learning disabilities. In the last Parliament, Sarah Teather, as Children’s Minister, initiated education, health and care plans in an attempt to co-ordinate all those services around children. But

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many of these services are delivered by local government, and there have been many cuts to local government funding. I am therefore concerned that the thresholds above which children become entitled to such services may not be appropriate. Will the Minister say something about that?

Health inequality is worse in this country than in many other developed countries, so we need to focus on child poverty and scrutinise every statement from the Chancellor about taxes and benefits, asking what effect they have on the health of our children. Will the Families Minister be doing this tomorrow, when the Chancellor announces his Budget? I doubt it but I shall be pleasantly surprised if the Minister assures me in a few minutes that she will.

7.05 pm

The Earl of Listowel (CB): My Lords, it is a pleasure to follow the noble Baroness, Lady Walmsley, and particularly her words on the physical health of children. She reminded me of the importance of my parents to my physical health—and not only genetically. My mother used to take us for two-hour walks across Hampstead Heath. I also remember my father’s hand on my back when I learned how to cycle, pushing me forward and helping me to balance. He taught me to swim and we would go swimming together. He taught me to play tennis and we would play tennis together. So I think that we need to reach the parents, as they probably have the most influence on our children’s physical health—which may be one of the most difficult things to influence. Of course we need to try in schools but we also need to begin at the beginning with parents.

I went ice-skating over the weekend and asked whether there were any family concessions. The answer was no. Part of this strategy, which I hope the Minister will talk about and perhaps write to us about, is asking how to get fathers-for-free passes for leisure activities so that they can engage in them with young people. It would strengthen their relationship with their children and also be a good model for healthy activity. So I was grateful for what the noble Baroness said about that.

I will speak a little more about the importance of strong families in terms of the mental and physical health of children. In particular, I want to talk about father-daughter relationships. I think that the noble Baroness, Lady Stedman-Scott, covered this, but I would be grateful to hear the Government’s strategy for families, and particularly for engaging fathers in families. Perhaps the Minister would write to me about that.

I want to say a few words about the mental health of looked-after children. I remind your Lordships of a report produced last month by the Alliance for Children in Care and Care Leavers. There have been a couple of recent reports on the mental health of looked-after children and the key themes are the importance of stable relationships with these children when they come into care and the importance of recognising their need to recover from early trauma. Enver Solomon, one of the co-directors of the alliance, is quoted as saying:

“Ultimately, the care system should help children overcome their past experience and forge the lasting and positive relationships that we know are vital”,

to their future well-being.

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The NSPCC produced a report yesterday on the emotional well-being of children in care. In the executive summary are five key points, the first of which is to:

“Embed an emphasis on emotional wellbeing throughout the system”.

The report goes on to develop that idea, saying that a key part of the job of foster carers and residential childcare workers should be helping young people to recover from their earlier trauma.

The fourth of the five key points is that we should support and sustain children’s relationships. A key means by which these children can recover from early trauma is by having strong relationships with their foster carers, their residential childcare workers and their teachers. Today I met a few young people in care. I heard from Ethan, who is a 10 year-old. He was complaining about the number of different social workers that he has experienced, and which other young people are still experiencing. I also heard from a 10 year-old girl who expressed concern about the number of changes of foster placements for young people in care. When we mentioned to her the very welcome introduction of the Staying Put scheme, she wanted to be reassured that many young people would now be able to stay with their foster carer from the beginning of their time in care to the age of 21, as Staying Put allows. So young people in care also believe that this is the right thing.

The Future in Mind report on child and adolescent mental health support services looks at the care of the most vulnerable children. I want to highlight to the Minister and your Lordships a key passage in the report. Paragraph 6.9, “A consultation and liaison mental health model”, is a bit jargony, I am afraid, but I will quote a little from it:

“Applying an approach whereby specialist services are available to provide advice, rather than to see those who need help directly to advise on concerns about mental health … is already best practice in some areas … Consultation and liaison teams can be used to help staff working with those with highly complex needs”.

Let me give an example of that. Kent, for instance, offers that kind of support to groups of its foster carers. A very experienced clinician will work with groups of foster carers. They may present a particular child and talk about them, share that experience with the group and then the clinician will facilitate the group.

Another example is my experience of 11 or 12 years ago, when I was told that there was a very effective hostel for young people in Olympia—effective in terms of keeping young people off the streets. I went along to visit Lydia Beckler, the manager of that hostel. She said that a clinician—a child and adolescent psychotherapist—visited the home every two weeks and the staff had a couple of hours with them to present a child to the group and get the clinician’s input. She said that the secret of their success was that kind of support.

It was a Centrepoint organisation—a large organisation for vulnerable young people—and these staff were working with perhaps the most challenging young people in the whole of the organisation. Miraculously—perhaps not so miraculously—they had the lowest sickness absence rates in the organisation. It supports

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the staff and helps them to be resilient in the face of very challenging young people. One young woman there had an unmentionable number of scars on her wrists from self-harm. These were really troubled, difficult young people, supported well.

Unfortunately, that kind of approach is so vulnerable, and it was lost to that particular institution after a couple of years because of financial worries. It seems costly to have staff spend time away from clients to sit with the clinician and think about what needs to be done. In fact, it is very efficient. In terms of making the best use of scarce CAMHS resources, having a clinician supporting the staff in that way enables them to make the right choices about when to refer children to more intensive services. I commend that to the Minister and to your Lordships as an approach.

Moving on—I am aware of the shortage of time—I would like to talk again about families. We have spoken about the importance of perinatal support, but I draw the attention of the Minister to a report from the OECD from 2011 entitled Doing Better for Families, which highlights that, in 2011, the percentage of children in this country growing up without a father in the home was approximately 21.5%, in the United States it was somewhere in the region of 25%, in Germany it was, I think, 15% and in Italy it was 10%. The report also projects that, by 2025 or 2030, we will have overtaken the United States considerably, when beyond 35% of children will grow up in households with just one parent. That really means without a father—nine out of 10 of those absent parents will be a father. That poses some challenges for us. President Obama, when he was Senator Obama, spoke very movingly and powerfully about his experience growing up without a father and the experiences of other young men growing up without fathers.

However, I think that girls are less talked about, and we really should think about the relationship girls have with their fathers, which may also have a strong influence on the future relationships that they make with men. We may be setting up a very perverse cycle of failed partnerships leading to further failed partnerships down the line. I want to quote from a book on father-daughter relationships that quotes an American journalist—I need to find my glasses before I do so—although it is a bit alarming. I have not looked at the research that this is based on; it is quite personal, as it is about her experience, but she is a well-respected journalist. I wanted to quote from Linda Nielsen’s book, Father-Daughter Relationships: Contemporary Research and Issues, but I see that my time is up. However, I hope that we will have another opportunity to discuss these matters very soon. I look forward to the Minister’s reply.

7.15 pm

Lord Northbourne (CB): My Lords, I want to delay your Lordships for about three minutes. I did not think that anybody was going to talk about schools. I want to do so because they have a major part to play in both the mental health and the physical health of parents. It is a kind of religion that schools are only about academia; they are not, and we have to use them as we can to solve the problems of our society.

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All schools, particularly those teaching pupils of secondary school age, should focus more on building self-confidence and interpersonal skills in all their pupils, especially in those who are likely to miss out on high academic achievement. My experience in working with disadvantaged children has led me to believe that fear of failure often blights the life of the disadvantaged child. All schools, especially all secondary schools, should give their pupils opportunities—somewhere, somehow—to succeed.

This is not a pipe dream. The best schools are doing it already, through a range of extracurricular activities—through involvement in running the school where appropriate, and in activities and adventures and sport and commitments of many different kinds. All are potential opportunities for children’s involvement and success. I admit that to do these things costs money, but it does not cost as much money as does having the number of disengaged children that we have in our society today.

7.17 pm

Lord Hunt of Kings Heath (Lab): My Lords, we have had a very good debate, and I am pleased that the noble Baroness, Lady Hollins, has enabled us to do it. Rather like the noble Baroness, Lady Walmsley, I want to start by focusing on physical health issues. As she said, the frightening obesity rates among young people are associated to a certain extent with lack of exercise, but I agree with her on what she said about food, eating and poverty.

We have heard the noble Lord, Lord Prior, speak at a number of seminars recently. He has stressed the Five Year Forward View, which the Government have endorsed. One of the encouraging things about that report is that I see—I think for the first time—some passion coming from NHS management about the need to deal with public health issues. That document points out the issue of obesity among young people and the problems that it is going to store up for the future. It also recognises the role of government in terms of legislation. Does the Minister accept the need for legislation when it comes to basic issues of the amount of salt, sugar and fat in foodstuffs, particularly those marketed at young people? He will know that in this country young people drink more of those super-sugary drinks than in any other country within Europe. Of course there is always a balance to be struck between the emphasis on individuals, the parental role and schools, but in the end legislation is sometimes required. I urge the noble Lord that his department ought to be battling in Whitehall to get some legislation around the protection of young people.

I hope that the noble Lord will respond to the point made by the noble Baroness, Lady Walmsley, about academy schools and their ability to go outwith much of what is sensible in relation to the teaching of young people in this area. Also, alongside the issues of food and healthy eating, there is a real concern about where exercise for young people has gone within our schools.

Frankly, we have now reached a point of hysterical obsession with testing young people, and that is crowding out the agenda and the focus. When I talk to year 6 teachers about the SATS testing that now has to be

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undertaken, I realise that in many schools they are doing nothing else but preparing for the tests for six months, mostly all the wretched testing around maths and English to the exclusion of almost anything else. We are reducing children’s education to a miserable exercise, one in which teachers do not believe, but they are being forced to do it. This is the Government’s obsession, and of course Ofsted has lost any notion of independence in terms of its own role.

The noble Lord may ask what all this has to do with him. It has plenty to do with the health department now that it is no longer concerned with NHS performance—or at least we are being told that, because the 2012 legislation promised it. The department has the space in which to argue in Whitehall for some of the measures that now need to be taken.

I agree with the noble Earl, Lord Listowel, about the whole issue of access to leisure facilities and the impact of local government reductions on many of them. Many local authorities have decimated their leisure service provision, which has a devastating impact on the ability—particularly of those who do not have access to resources—to use such facilities. This will become a very serious problem for the future.

I do not want to spoil the noble Baroness’s Question for Oral Answer on Thursday, and she might have mentioned it, but the Government and certainly the Chancellor have rather undermined NHS England when he swiped £200 million from the public health budget of local authorities in-year. There is a sense in which the Government are saying that of course prevention is important, but their first action after the election was to reduce the amount of money available to local authorities to act in this area. The noble Baroness, Lady Stedman-Scott, made some important points about families, which I hope the noble Lord will respond to.

We have debated the issue of mental health some four times, I think, over the past few weeks. That is important because it is an important subject, but we know from the Royal College of Psychiatrists, which is one source of information for this debate, that one in 10 children and young people suffers from a diagnosable mental health disorder. Half of all diagnosable mental health conditions start before the age of 14, and 75% by 21. We also know that the figures are even more worrying for young people from BME backgrounds. The Health Select Committee report published in November 2014 talked about,

“serious and deeply ingrained problems with the commissioning and provision of children’s and adolescents’ mental health services”.

I know that the Government are going to talk about the task force, and that is welcome, but perhaps I may put four questions to the Minister. First, why is the funding for children’s mental health services still so low in view of all the problems that have been identified? Secondly, I understand that, of the joint strategic needs assessments that are written by each public health director for their local authority, very few mention children’s mental health services. I also suspect that even fewer pick up the point made by the noble Earl, Lord Listowel, about the health concerns around looked-after children. Why is that? Does the Minister believe that directors of public health need to

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have their attention drawn in their annual report to the importance on the state of the health of their local authority, and that this is an important area for them to be concerned about?

Finally, I want to ask about the introduction of waiting time standards for mental health services. The Minister will know that this was introduced in April 2015 and people are guaranteed talking therapy treatment within six weeks, with a maximum wait of 18 weeks. For individuals experiencing a first episode of psychosis, access to early intervention services will be available within two weeks. I recognise that it is early days; we are only four months away from the start of these new standards, but I wonder whether the Minister can say something about how he thinks the service is progressing.

7.25 pm

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, first, I congratulate the noble Baroness, Lady Hollins, on securing this debate. One advantage of the debate having quite a broad title is that one does not quite know where noble Lords will be coming from.

I shall start with schools, and I declare an interest. I was a founder of two free schools and, until recently, I was chairman of a free school and an academy group of schools in Norwich. It is good that they have freedom to decide on things such as school meals; it is right that academies should have that freedom. I spent last week talking about a sports strategy for our schools. Competitive sports and physical exercise are extremely important, and I do not agree with the noble Lord, Lord Hunt, that the curriculum crowds out those activities. One can make room for them. I agree very much with the noble Lord, Lord Northbourne, that not just in secondary schools but in primary schools such activities are essential in building up young people’s self-esteem, self-worth and a sense of purpose, whether they are doing competitive sports, the Duke of Edinburgh’s gold award or any schemes of that kind. They are hugely important.

The thing that ran through the speech of the noble Baroness, Lady Hollins, and many other speeches, was early prevention. We have had four debates on this subject in the last few weeks. What I have learnt most is the importance of early prevention, right through to early pregnancy—and indeed before.

I also draw attention to the comments of the noble Baroness, Lady Stedman-Scott, on the importance of the family. Other noble Lords have also stressed that. There is no substitute for family; the state can never be a substitute for the family. The noble Baroness put a figure of £48 billion on the cost of family breakdown but that does not do justice to, or begin to reflect, the family misery that that encompasses. The noble Earl, Lord Listowel, drew our attention to the number of families growing up without a father. He mentioned that the figure will be 35% by 2030, according to an OECD report, which is truly frightening.

I hope that I can pick up a number of other points made by noble Lords. I was shocked by the comparison between our performance and that of Sweden. I have not seen that figure before. Infant child and adolescent death rates in the UK have declined substantially, but the overall UK child mortality rate is higher than that

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of some other European countries. I had not realised that as many as five more people under the age of 14 die each day in our country compared with Sweden. I think that that is what the noble Baroness, Lady Hollins, said. Sometimes numbers can detract from an argument; that number certainly adds to this one. The

Why Children Die

report by the Royal College of Paediatrics and Child Health stated that there is no single cause for the disparity between countries and, equally, there are no simple solutions. I have no doubt that inequalities of health and of life contribute more than most to that rather startling statistic.

If I have time, I shall talk about three broad areas: ensuring that children are properly supported by health services; steps to ensure that children can live healthier lives; and those services that ensure that we can protect our children. I will leave the issue of child slavery, raised by the noble Baroness, Lady Hollins, for another day. Perhaps I may write to her on that?

Starting with maternity, what happens in pregnancy and in the early years of life has a long-term impact. There can be no doubt about that. We have made some achievements over recent years. Again, I am not sure that the numbers add much to the argument, but I have a list of the additional midwives and midwifery-led units, and of the extra money that we have spent in this area. I do not think that that adds much to the argument because we know that much more can be achieved.

Noble Lords are probably aware that my noble friend Lady Cumberlege is leading a major review of maternity services and that the Government will provide an additional £75 million over the next five years for services to support women with mental health issues in the perinatal period. We heard in an earlier debate from, I think, the noble Baroness, Lady Walmsley, who said that one in five children whose mother suffers from mental illness—postnatal depression—will, in turn, suffer from mental health problems. That was another point that the noble Earl, Lord Listowel, made: there is a cycle to these things. If a child is brought up in a family that has suffered a breakdown, there is more chance that, in turn, that child’s family will also suffer. I know from personal experience how mental health, whether for genetic or other environmental reasons, can dog families through the generations.

Support in the community in early years is provided through the Healthy Child Programme, led by health visitors and their teams. Over the last four years, a major programme to revitalise the health visiting workforce has taken place, with 4,000 new health visitors now in post and a further 9,000 completing training. I ought to mention, although it is not an easy question, the £200 million that has come off the public health budget, as raised by the noble Lord, Lord Hunt. I hope that the noble Lord will allow me to defer an answer to that until the Question that will be asked on it early next week. From September 2015, health visitors and early education practitioners will deliver integrated reviews with the aim of giving families and health and education professionals a more complete picture of child development.

A number of noble Lords raised obesity. Childhood obesity is clearly a huge issue. The latest estimate of the cost to the NHS of overweight or obesity-related

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conditions is £5.1 billion, but of course obese children are more likely to become obese adults, with all the health conditions that go with that. The noble Lord, Lord Hunt, said that he detected signs of passion in NHS England, reflected in the

NHS Five Year Forward View

, about this subject and about prevention more generally.

There is a wider debate to be had about the role of government, how much legislation we want in this area and how much we rely upon personal responsibility. If we bring tax into these areas, for example, does that fall disproportionately on the very people who can least afford it? These are big issues and I do not think there is a right or a wrong answer.

It is not acceptable that one in five children leaves primary school clinically obese—that is, obese children aged 10 and 11. Obese children are more likely to be ill, absent from school, and suffer psychological problems than children with normal weight. While some progress has been made, we know that we must go much further. We have invested £222 million in programmes such as the PE and sport premium for primary schools, School Games, and Change4Life Sports Clubs. Last week we launched this year’s Change4Life 10-minute shake-up campaign with Disney, which encourages children to do 10-minute bursts of moderate to vigorous activity, inspired by Disney characters. I guess it is a fact that we cannot do enough in this area and there is a lot more that we, schools, families, parents and society could do. Clearly, there is a role for government but it is easy to say always that government should do more.

I should touch on preventing domestic abuse and child sexual abuse. As part of our strategy to prevent violence and abuse towards women and girls, we are

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providing tools and guidance for health and care professionals to enable them to better identify cases of violence and enable the young people affected to access the right therapeutic support. Routine inquiry into domestic abuse is expected to be undertaken in maternity and adult mental health services. Following publication on 3 March of the Government’s report,

Tackling Child Sexual Exploitation

, this will be expanded to settings used by children at risk of sexual abuse, including mental health services for people over 16 years old.

Last week, the Care Quality Commission published the results of its children’s in-patient and day case survey. I was going to talk about this but as no noble Lord raised it I will leave that for another day and move on to children’s mental health. It is an issue that we have discussed before but it is important to say that the Government are committed to spending an additional £1.25 billion over the next five years. That is a huge increase in the budget. This is on top of the £150 million for children and young people with eating disorders. That has to be one of the most shocking and ghastly illnesses that any child or family has to cope with.

This Government have also introduced the first ever waiting time standards for mental health. I think it is too early for me to report back to the noble Lord, Lord Hunt, on how that is going. Parts of these standards will apply to children and young people, including the target of treatment within two weeks for more than 50% of people of all ages.

I am afraid that my time is up. This has been a very quick whistlestop tour of some very important issues. I thank the noble Baroness, Lady Hollins, for bringing this debate to the House.

House adjourned at 7.38 pm.