Alternative Investment Fund Managers Regulations 2013
Debate between Lord Davies of Brixton and Baroness Penn(1 year, 1 month ago)
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Baroness Penn (Con)
My Lords, the operation of the consumer panel and other panels of the FCA is a matter for the FCA. I am sure that it draws on all its different panels, as appropriate, when taking forward its work programme.
Lord Davies of Brixton (Lab)
My Lords, one recognises the important issue being raised, but the context has to be understood of a financial services industry that does not have an unblemished record, in terms of the personal pensions and endowment insurance scandals. The FCA has to recognise that it cannot take the good will of the industry towards the client as given.
Baroness Penn (Con)
My Lords, some of the issues that the noble Lord sets out are why it is important to take forward the programme of reform in a measured way that takes into account the interests of all involved in the sector, whether industry or consumers, and makes sure that we have proper consultation in everything that we do.
Bank Accounts
Debate between Lord Davies of Brixton and Baroness Penn(1 year, 5 months ago)
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Baroness Penn (Con)
I agree with the noble Lord on both points. When it comes to assessing whether that has taken place, that is a question for the regulator.
Lord Davies of Brixton (Lab)
My Lords, I have to express a bit of concern about what I take to be the mood of the House. Will the Minister confirm that a PEP regime is essential, albeit one that is properly operated, and secondly, that if people cannot account properly for their income, it is right and proper for banks to refuse to continue an account?
Baroness Penn (Con)
My Lords, that is why it is important to distinguish between the PEP regime, which has caused problems for people, and questions about banks’ actions in relation to freedom of speech or political views. It is important, though, in both circumstances, whether you are a PEP or you have expressed any view that is lawfully held, that you have access to bank accounts. In taking forward our work on PEPs in particular, we are mindful of always maintaining our commitment to international standards in this area, and our amendments to the Financial Services and Markets Act do just that.
Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) (No. 2) Order 2023
Debate between Lord Davies of Brixton and Baroness Penn(1 year, 6 months ago)
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The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, as the Committee will be aware, Silicon Valley Bank UK Ltd—SVB UK—was sold on Monday 13 March to HSBC. The aim of this sale was to ensure that customers of SVB UK could access their deposits and banking services as normal; to limit risks to our tech and life sciences sector; and to safeguard some of the UK’s most promising companies.
We have achieved these outcomes—the best possible—in short order, without any taxpayer money or government guarantees. There has been no bailout, with SVB UK sold to a private sector purchaser. This solution is a win for taxpayers, customers and the banking system. The IMF has said that the UK’s response to SVB UK restored market confidence and contributed to the UK’s upgraded growth forecast. It now expects the UK to avoid a recession this year.
On Monday 13 March, the Economic Secretary to the Treasury laid in both Houses a statutory instrument, using the powers under the Banking Act 2009, to facilitate the sale of SVB UK to HSBC. That instrument has now been approved by both Houses. It granted HSBC’s ring-fenced bank an exemption so that it could provide liquidity on non-arm’s-length terms to SVB UK on an ongoing basis. This was needed to facilitate the sale of SVB UK to HSBC, because it ensured that HSBC was able to provide the necessary funds—over £2 billion in the immediate days after—to its new subsidiary. The exemption also ensures that HSBC UK can provide liquidity to SVB UK as needed.
The Economic Secretary to the Treasury has now laid this second statutory instrument, which we are debating today, to provide an ongoing exemption from ring-fencing requirements for SVB UK, beyond the existing four-year transition period. This exemption is subject to conditions relating to the size of SVB UK’s core deposits, and the type of business it can undertake.
The first condition is intended to ensure that SVB UK, or its subsidiaries, will not be able to hold core deposits—typically, retail and SME deposits—above the existing core deposits threshold in the ring-fencing regime; that is, £25 billion. The threshold is used to determine whether a bank becomes subject to the ring-fencing regime. The second and third conditions are intended to ensure that SVB UK, or its subsidiaries, will be allowed to undertake only new business activities similar to SVB UK’s existing business at the time of the acquisition by HSBC.
These conditions are intended to ensure that the exemptions from the regime are limited to what was needed to facilitate the sale of SVB UK. Together, they minimise risks to financial stability and limit any competitive distortion.
Indeed, Sam Woods, deputy governor for prudential regulation and chief executive of the Prudential Regulation Authority, has confirmed the PRA’s support for the provisions in this instrument in a letter which the EST has laid in the Libraries of both Houses and which I sent to those who spoke in the debate on the first SI relating to SVB. It states that
“the statutory instrument and its conditions supports the PRA’s primary statutory objective of safety and soundness, and limits competitive distortion”.
The letter also confirms that the PRA has a range of tools to ensure the effective supervision of HSBC and SVB UK.
This amendment, along with the previous exemption, was crucial to the purchase of SVB UK by HSBC and protected taxpayers and depositors. The UK has a world-leading tech sector, with a dynamic start-up and scale-up ecosystem, and the Government are pleased that a private sector purchaser was found. I hope noble Lords will join me in supporting this legislation. I beg to move.
Lord Davies of Brixton (Lab)
My Lords, I support the order, but it raises some issues that bear significant further thought. The exemption from the ring-fencing requirement is clearly an issue, so it was discussed in the Chamber earlier in the week. The Government have said that ring-fencing is a key part of their package of banking reforms designed to increase the stability of the UK financial system and prevent the costs of failing banks falling on taxpayers—this was following the financial crisis. Clearly, it is important, and any decision to have some exemption needs careful consideration. I shall not deal with the issue in detail; I heard what the noble Baroness, Lady Kramer, said about it in the Chamber earlier in the week, so I can say in anticipation that I very much agree with her remarks.
I want to say something about the resolution process and what we learned about it during this episode. The Bank of England is responsible for taking action to manage the failure of financial institutions—the process known as resolution. The Bank said that the financial system needs an effective resolution framework, and that was one of the key lessons from the global financial crisis of 2008. Resolution reduces the risk to depositors, the financial system as a whole and the public finances which could arise following the failure of a bank. The object of resolution is to reduce the risk of bank failure as well as to limit its impact when it occurs. To be effective, a resolution authority needs powers that ensure that any losses will fall on a failed bank’s investors but without risk to financial stability or to the broader economy.
To achieve those objectives, the Bank has powers that affect the contractual rights of counterparties and investors in the failed firm, so there have to be statutory safeguards for creditors and counterparties. The requirement in general is that shareholders and creditors must absorb losses before public funds can be used. The Bank has a range of powers to enforce insolvency, which was the initial expectation in this case, or to transfer all or part of a firm’s business either to a private sector purchaser or to a temporary bridge bank established by the Bank pending a sale or transfer.
At the point of failure, Silicon Valley Bank UK had a total balance sheet size of about £8.8 billion and a deposit base of approximately £6.7 billion—that is, assets greater than liabilities to depositors. In that sense, it was solvent. However, the scale of the deterioration of liquidity and confidence meant that the Bank and the Prudential Regulatory Authority—PRA—concluded that the position was not recoverable. It is what the Governor of the Bank of England has described as “banking 101”.
Having consulted the Treasury, the PRA and the Financial Conduct Authority—the FCA—the Bank of England decided ultimately to use its resolution powers to transfer the bank to a private purchaser. My question for the Minister is: what lessons have the Government learned from this episode about the resolution process? The process is relatively new and untested, which means that each example must be explored in detail. The idea of testing the resolution regime is of course problematic; you would not want to test your home insurance by burning down your house, so we have to learn where we can.
Now, getting to the crux of what I am talking about, the example was discussed at the meeting that the House’s Economic Affairs Select Committee had with the Governor of the Bank of England on Tuesday, which I attended. Unfortunately, we do not yet have the official transcript, so I cannot quote what the governor said, but I can give the Committee my impressions of what issues need to be explored based on what was said at the meeting.
The first issue is whether the resolution regime worked. Was there a clear and predictable set of rules upon which depositors could rely or was it, in practice, totally ad hoc? It may be that what worked was the right approach in the circumstances, but we need to be clear about that. The governor appeared simply to rule out certain approaches—for example, a bridge bank—largely, it would seem, because of the impact on the public purse. Manifestly, the wish to avoid splitting the assets and liabilities led to the decision to break the ring-fence.
Another thing that was clear is that resolution is inevitably an intensely political process. When the bank said it consulted HMT, it certainly was not just officials. Certainly, the Chancellor but also the Prime Minister were involved in what in banking terms does not really count as a large institution but that on the face of it had wider financial implications. I do not want to downplay the significance of the event. It appeared that at one stage of the process it was suggested that a failure to resolve the matter satisfactorily would “really set back curing disease”—so no pressure.
Finally, the underlying question is whether we are heading in the direction that means that it will, in practice, never be acceptable to impose losses on uninsured deposits. We must remember that in this case the deposits were generally commercial, not personal, deposits. These issues are being discussed, and there is ongoing discussion about a digital currency, but it would be best if they were discussed clearly, openly and together.
Baroness Penn (Con)
To answer the noble Baroness’s question about whether SVB UK will be permitted to use unlimited amounts of retail funding from HSBC’s ring-fenced bank, the ring-fencing exemptions are subject to conditions that restrict the amount of SVB UK’s core deposits and the type of business that it can operate, as I have set out and as is in the SI. In addition, the PRA has granted HSBC UK and SVB UK temporary waivers to remove constraints in the PRA Rulebook relating to the capital requirements regulation—CRR—on the intragroup lending and funding from HSBC to SVB UK. These waivers, along with the modification to the regime the Government made in the first SI, allowed HSBC to provide emergency liquidity to SVB UK.
As is usual practice with PRA waivers, they are time-limited. One of the waivers expires on 17 September 2023 and the other on 17 June. Whether these waivers are extended or modified is a matter for the independent regulator. The waivers are part of the range of tools that the PRA can use to ensure the effective supervision of HSBC UK and SVB UK. If these waivers lapse, the constraints in the PRA Rulebook regarding intragroup lending and funding from HSBC to SVB UK will come into effect, which would mean that SVB UK would not be able to be funded to an unlimited extent from HSBC UK’s retail deposits.
The noble Baroness, Lady Kramer, said that she took no comfort from either the provisions in this SI or the PRA’s wider supervisory and regulatory powers. What I would say is that the PRA has confirmed its support for provisions in this instrument. Sam Woods has stated that the SI and its conditions support the PRA’s primary statutory objective of safety and soundness and limits competitive distortion. He outlined that the PRA has a range of tools that it can and will draw on to ensure the effective supervision of HSBC and SVB UK and ensure the protection of retail deposits. It will continue to supervise both HSBC UK and SVB UK in line with its usual supervisory approach.
The noble Baroness asked me about Section 55M of FiSMA. I suggest that I should perhaps write to the noble Baroness and the Committee on this point. I have the outlines of an answer, but I think that it might be better delivered in writing for complete clarity. To come back to her point, more broadly, about parliamentary scrutiny or control over the process around the ring-fence and changes to it, the actions in this case are entirely in line with powers granted to the regulators in terms of operating the resolution regime. What we should not do is to think that the powers used under the special resolution regime are indicative of the Government’s or regulators’ approach to reforming the ring-fence more broadly. Any fundamental reforms to that ring-fencing regime would require changes to primary legislation. There is nothing in this process that has changed that.
To turn to the question from the noble Lord, Lord Livermore, on lending to the sector, or sectors, that formed a large part of the customer base for SVB UK, he is absolutely right that it is essential that tech and life science firms have access to the capital that they need to start up and scale up. We support that through the British Business Bank, which has several programmes tailored specifically to the needs of the UK’s life science and technology companies, including the £200 million Life Sciences Investment Programme and the £375 million Future Fund Breakthrough programme, which is specifically aimed at increasing the supply of growth-stage venture capital to UK-based companies working in capital and R&D-intensive areas, such as quantum AI, life sciences and clean tech. There is the National Security Strategic Investment Fund, which invests commercially in advanced technology firms and aims to accelerate the adoption of the Government’s future national security and defence capabilities.
Further to that, at the Budget, the Government extended the British Patient Capital programme by a further 10 years. Alongside that, the Government launched the long-term investment for technology and science initiative to aim to spur the creation of new vehicles for investment into science and tech companies, tailored to the needs of UK defined contribution pension schemes. The contribution of pension scheme capital in this area is something that we discussed quite a bit yesterday, and the Government have further intentions to take forward action in this area.
Baroness Penn (Con)
I believe that at the Spring Budget the Chancellor said that he would report back in the autumn on the further work undertaken in that area—so quite soon, I would say.
I shall read through the transcript of this debate and look to ensure that where I have not fully answered the questions raised I write to noble Lords. Although it has been a short debate, it is an important area and I want to make sure that we get all the facts clearly on the record.
Mortgage Market
Debate between Lord Davies of Brixton and Baroness Penn(1 year, 6 months ago)
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Baroness Penn (Con)
My Lords, interest rate decisions remain a matter for the independent Monetary Policy Committee of the Bank of England, but I say to my noble friend that high inflation is also bad for the economy. To have high growth we must first have low inflation, so we absolutely support the Bank of England in its task of pursuing the 2% inflation target and the difficult decisions it will have to take to achieve that.
Lord Davies of Brixton (Lab)
My Lords, I cannot resist the temptation to draw to the House’s attention the fact that this is the 278th anniversary of the Battle of Naseby—I am not picking a fight with the noble Lord.
My question concerns the fact that this is going to have a massive effect on the buy-to-let market. We are expecting further increases in interest rates, given recent news. A report in the Times last week showed the relationship between increases in the bank rate and the knock-on effect on “underwater” buy-to-let owners. This will cause severe damage to the buy-to-let market. I have mixed feelings about that market, but to the extent that owners of such properties cannot maintain their property properly, this will have a deleterious effect on the UK’s housing stock. The Government should be seized of this issue. To me, the solution is that the Government should provide funds to local authorities in order that they can take over these underwater buy-to-let properties—interestingly, a large proportion of them are ex-council properties anyway—so that local authorities can address the housing problems in their local areas.
Baroness Penn (Con)
My Lords, the noble Lord will know that the Government have given local authorities many more powers and more discretion in how they approach housebuilding and house supply in their area in recent years. He is right that the changes to interest rates will affect those in rented accommodation as well as those who have mortgages through channels such as he described. The Government are putting in place further support for renters. We have a series of reforms coming in through the Renters (Reform) Bill which will improve quality and security in the private rented sector. For those on benefits, the Government boosted investment in the local housing allowance in April 2020 by nearly £1 billion, and rates have been maintained at this increased level.
Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022
Debate between Lord Davies of Brixton and Baroness Penn(2 years ago)
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The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, in the Autumn Statement, the Government set out their prioritisation for taxation to be fair by following two broad principles: first, that we ask those with more to contribute more; and, secondly, that we avoid the tax rises that most damage business.
Noble Lords will remember that the National Insurance Contributions (Increase of Thresholds) Act 2022 increased the point at which class 1 and class 4 NICs are paid to align with the personal allowance for income tax. As a result of that legislation, almost 30 million working people are better off. We are here today to discuss the final element of the Government’s ambition to align national insurance contribution thresholds with the personal allowance for income tax.
I note that, in its 19th report, the Secondary Legislation Scrutiny Committee raised these regulations as an instrument of interest. The regulations introduce a new threshold within class 2 NICs from which self-employed individuals start to pay class 2 NICs. This will be known as the lower profits threshold. Class 2 NICs will now be due only if profits exceed the new lower profits threshold, set at £11,908 for the 2022-23 tax year.
The new lower profits threshold will be aligned with the personal allowance. However, the threshold is being set at £11,908 for 2022-23 to reflect the fact that personal NIC thresholds were increased from July this year, meaning that individuals will benefit from an increased threshold for nine months of the tax year. For 2023-24, the self-employed thresholds will be set at £12,570. This means that no one will pay a penny of income tax or national insurance contributions on their first £12,570 of income from 2023-24 onwards, allowing people to keep more of what they earn.
However, this measure goes further. Class 2 NICs are the mechanism by which the self-employed become entitled to certain contributory benefits, such as the state pension and statutory maternity pay. To ensure that individuals do not lose access to their benefit entitlement, the existing small profits threshold will be maintained as the point at which the self-employed gain access to certain contributory benefits. This means that individuals will benefit from the increased threshold for paying class 2 NICs without losing their entitlement to contributory benefits.
This measure will apply retrospectively from the start of the 2022-23 tax year, in line with the provisions made in the parent Act. This means there will be no delay in this measure benefiting around 500,000 self-employed individuals, saving them £163.80 a year. Changes will be delivered via the annual self-assessment process for the vast majority of customers, following the end of the tax year.
These regulations fulfil the Government’s obligation to increase the point at which the self-employed pay class 2 NICs. Importantly, they ensure that thresholds are aligned and our tax code is simplified. I beg to move.
Lord Davies of Brixton (Lab)
My Lords, as a supporter and fan of national insurance, I did not want these regulations to pass unnoted. I am a believer in the national insurance system—I guess there are not many of us left—where people pay contributions and that provides entitlement to national insurance benefits.
It has been understood, from the beginning, that there are people in employment and people who are self-employed. For practical reasons, different sets of rules have to apply to each group of workers. Nevertheless, the objective should always be neutrality in the financial impact, otherwise it is bound to give rise to issues of financial arbitrage regarding being employed or self-employed. That is all well understood. I will avoid going off down the IR35 track; there will be plenty of other opportunities to pursue that.
On the face of it—I would be interested in the Minister’s views—this change might be seen as a move towards reducing inequality between the employed and self-employed. However, in practice, it increases the difference. The tell is the fact that there is a cost, in a normal year, of £100 million. In the context of the figures we have seen in recent Budgets, that is not an enormous sum, but it suggests that this is a move away from neutrality and that it further increases the advantages that people perceive in being self-employed as opposed to being employed, with all the problems that flow from that. The background to this is clearly the extent of the acknowledged problem of fake self-employment for financial reasons. Perhaps the Minister would indicate, in broad terms, quite how this change fits in with what I hope is an understanding that there should not be excessive financial advantages in being self-employed.
I heard what the Minister said about the changes to entitlement to benefits. I emphasise that, in achieving neutrality between employed and self-employed contributions, there should equally be neutrality between the benefits paid to people who have paid the different types of contribution.
Defined Benefit Pension Funds
Debate between Lord Davies of Brixton and Baroness Penn(2 years, 1 month ago)
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Baroness Penn (Con)
My Lords, the Government do not agree with the noble Baroness’s assessment of the situation. Along with the Bank of England and the Financial Policy Committee, we keep a close eye on identifying and addressing systemic risks to improve UK financial stability. In 2018, the committee specifically looked at UK pension schemes’ resilience to an instantaneous 100 basis point rise in yields across maturities. The movements that we saw a few weeks ago were greater than that. As the FPC has also noted, it may not be reasonable to expect market participants to insure against all extreme market outcomes, because there can be negative effects to that as well.
Lord Davies of Brixton (Lab)
My Lords, I declare an interest as a fellow of the Institute of Actuaries. I am afraid that there will be an alliance of regulators and providers who will say, “Nothing to see here, we can move on”. There are questions to be answered about what damage has been done and about what we can do to ensure that it does not happen again. There is so much hidden in the investment policies of pension funds. Can the Government give an assurance that there will be a proper investigation of what happened, with an independent element?
Baroness Penn (Con)
My Lords, the Pensions Regulator and other regulators have said that they will want to look at what has happened and learn lessons. I also understand that the Work and Pensions Committee in the Commons is looking at this issue, including any changes to the Pensions Regulator, for example, that may need to be made. The Government look forward to reading the results of its findings.
Social Security (Contributions) (Amendment No. 2) Regulations 2022
Debate between Lord Davies of Brixton and Baroness Penn
Baroness Penn (Con)
My Lords, this measure will deliver a small but important element of the health and social care levy. The health and social care levy will create a long-term, sustainable source of revenue for healthcare. This extra funding will help the health and care system recover from the pandemic and implement reform to social care as soon as possible. The levy will operate as an increase to NICs rates in 2022-23 before becoming a stand-alone tax from 2023-24 onwards.
National insurance is a progressive basis on which to raise revenue. The primary threshold means that the lowest earners do not pay any national insurance contributions. Last week’s announcement that the Government are aligning the annual primary threshold and lower profits limit, the point at which employees and the self-employed respectively start paying national insurance contributions, with the income tax personal allowance at £12,570 from July 2022 will reduce NICs by more than £330 for a typical employee in the year from July and will mean that around 2.2 million working-age people will be taken out of paying class 1 and class 4 NICs altogether, on top of the 6.1 million who already do not pay national insurance.
These small but important regulations will ensure that the 2022-23 NICs increase is also applied to the married women’s reduced rate, as has been made clear in government communications and as is anticipated by stakeholders. The married women’s reduced rate was introduced to allow women to use their husband’s NI contributions to qualify for a state pension. This rate was removed by the Social Security Pensions Act 1975 and the circumstances in which it continues to apply are relatively unusual.
To qualify for this rate now, a woman must have opted into the scheme before May 1977, have been married at the time and not divorced since, currently be under state pension age and not have had a break of two years in her employment. As such, the rate applies to only a very small number of individuals. A 2019 scan showed between 250 and 1,000 such employments still qualify for this rate. Due to the qualifying conditions, we expect that fewer such employments, and fewer individuals, will qualify in 2022. Legislation is already in place so that, from April 2023 onwards, these individuals will be subject to the stand-alone health and social care levy in the same way as other individuals. However, in order for the 2022-23 NICs increase to apply to this group, further legislation is required. This has led to these regulations.
This measure will, for 2022-23, increase the married women’s reduced rate by 1.25 percentage points from its current rate of 5.85% to a temporary rate of 7.1%. This cohort will still benefit from a reduced rate of NICs compared with the main rate of class 1 NICs, which will be 13.25% for the 2022-23 tax year. Noble Lords should note that stakeholders are expecting this rate to increase. The 2022-23 NICs rates have been publicly communicated on GOV.UK. Employers and software and payroll providers have updated their systems to reflect this increased rate. Failing to increase the married women’s reduced rate for the 2022-23 tax year would mean that this group is unfairly advantaged compared with others. This group will, like others subject to the new levy, benefit from increased spending on health and social care. It is only right that they also contribute to its funding.
Exempting this group from the NICs increase would undermine the principle of the health and social care levy, which has been designed to apply consistently and fairly across the population. Although these regulations will apply to only a small number of individuals, the changes they make are therefore critical to ensuring that the health and social care levy operates correctly.
I understand that noble Lords may have concern with the speed at which these regulations have been provided. I recognise that this is not ideal and apologise for the delay in laying these regulations. I very much appreciate noble Lords’ co-operation and efforts to ensure that these regulations are properly scrutinised. The health and social care levy, and the temporary increase to NICs, have been thoroughly scrutinised and debated in recent months. I welcome this further engagement to ensure that the levy can apply as intended. I therefore beg to move.
Lord Davies of Brixton (Lab)
My Lords, I could not resist coming to this debate. It is akin to social policy archaeology. I very much thank the Minister for her clear, straightforward and unarguable introduction. In fact, she addressed the two points which I was going to raise. She mentioned that this was small—a word she used two or three times—and my first question was, “How small?” She came up with the pretty broad figures of 250 to 1,000. This sounds a bit vague. I have seen another figure elsewhere of 200, so it is certainly of that order. I do not know whether the officials can tell us, but do we simply not know because there are so few that they do not get picked up in the sample survey which is undertaken? As the Minister said, it is relatively unusual.
The second question I had was: why are we getting this too late? It leaves us with the suspicion that someone forgot it and was desperately trying to make it up before the deadline.
My final point is that women who chose the married women’s option probably got a poor deal. I have always been surprised that this has not been pursued. You only need to reflect on the level of attention which was given to the increase in the women’s retirement age issue. In some ways, it could be argued that the women who opted for the married women’s option have had an equally bad deal. If you actually look at their contributions, they have paid as much as someone who is contracted out of the state earnings-related scheme, yet the latter group has been treated very much better. However, we have a Treasury team on this occasion, so maybe this is something I need to take up with the DWP.
With those few remarks, I thank the Minister. I will not be objecting to the regulations.
Drug-related Mental and Behavioural Disorder Hospital Admissions
Debate between Lord Davies of Brixton and Baroness Penn
Baroness Penn (Con)
My Lords, any illegal drug use, including use of cannabis, can be harmful both from immediate side-effects and from long-term physical and mental health problems. It can, for some, have a negative impact on fertility. Cannabis is classed as a class B drug, which is a matter for the Home Office, but there are no plans to change that classification.
Lord Davies of Brixton (Lab) [V]
Look, my Lords, there is no great mystery: people with mental health problems have seen their community services reduce over time, which means that there is an inevitable increase in admissions to hospitals under a section of the Mental Health Act. The promised reform of the Mental Health Act might help and will be welcome in any event, but it is obvious that more resources in community support are needed to prevent admissions, as well as an increase in the numbers of skilled professionals to provide the therapy. What is the Government’s plan to improve these mental health services outside hospitals and where are the necessary resources?
Baroness Penn (Con)
My Lords, the Government are committed to increasing resources for drug treatment services in England next year and we have put in an extra £80 million for that. That will fund, among other things, additional in-patient detox beds. We are also committed to increasing the resources that go into mental health treatments through the NHS long-term plan.