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The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): Will the hon. Gentleman accept that the Government have said that those members of the public who want to can continue to receive their payments in cash both before and after 2003?

Mr. Llwyd: Yes, I accept what the Minister says on the face of it. However, I do not know what the Department of Social Security is planning to do. Only a short time ago, under the previous Government, DSS mandarins decided that they would close a third of the benefit offices in Wales and they did not even bother to tell the relevant Minister about that. He was alarmed, and I do not know what the hidden agenda is any more than--

Mr. Alan W. Williams: The hon. Gentleman is scaremongering.

Mr. Llwyd: The hon. Gentleman also said that in the Welsh Grand Committee. The only word that he seems able to use is "scaremongering". Perhaps his constituency is different and is immune from the problems that affect the rest of Wales. I hope for his sake that it is; he might even save his seat.

Mr. Williams: I thank the hon. Gentleman for giving way having drawn me into intervening. Will he engage in some joined-up thinking? Earlier he referred to bank closures in Blaenau Ffestiniog and Harlech, and, of course, we regret that when it happens. However, does he not realise that the Post Office will have a great opportunity to develop banking services? The Government are working hard, through the computerisation of all rural post offices, to diversify the services that post offices will be able to provide. In particular, they will be able to offer banking services.

Mr. Llwyd: That argument has a flaw. It is said that automatic cash dispensers will be placed in post offices, and that is fine. However, I tell the hon. Gentleman that they are extremely costly to install and, in many areas, banks were not able to afford them. Even if they are installed, the best reckoning is that it will cost £2.50 a transaction. The hon. Gentleman shakes his head, but he is no expert on the subject. The accepted truth is that it will cost £2.50 a transaction.

Mr. Simon Thomas: Is my hon. Friend aware that many sub-postmasters in my constituency complain that they do not have the turnover to get a national lottery terminal in their sub-post offices, let alone one that would allow a bank to put in an automated teller machine?

Mr. Llwyd: My hon. Friend is right, because we are talking about rural areas. What exactly will a village shop diversify into? For heaven's sake, what can it diversify into? There is nothing much that it can do. It might be

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able to add a few lines to what it sells, but it is pie in the sky to suggest that every post office will be able to trade itself out of a deeply worrying position.

Mr. Ruane: Will the hon. Gentleman tell us where he gets the figure of £2.50 for each transaction from?

Mr. Llwyd: The figure of £2.50 a transaction has been extensively referred to in the press recently. If it proves to be wrong, I shall gladly apologise.

Mr. Livsey: I support what the hon. Gentleman is saying. Under legislation, the regulator has no power to impose a 30p rate, and the banks have said that they are going ahead with a £2.50 charge.

Mr. Alan W. Williams: Not true.

Mr. Llwyd: I think that I have made the point sufficiently. There is real concern about this issue. I shall not dwell on it now, because it will be for another day. I have received numerous petitions on the subject, and I have sent them on to the Government. I hope that we shall be able to get them to reconsider this very damaging proposal. It might work in some urban areas, but it is certainly no good for any rural area. It will be extremely damaging for rural Wales.

Mrs. Betty Williams (Conwy): What would be the hon. Gentleman's party's answer for a small village in my constituency, where the postmaster is giving up? The Post Office has written to say that it has advertised extensively to try to find somebody in the village to take over the business. That has nothing to do with the changes in 2003. If an answer is not found by the end of this month, that post office will close. There is another example in my constituency.

Mr. Llwyd: There are several answers. The first is that such businesses are now blighted, because the change is hanging over their heads. I have examples of post offices that have closed. Corners of village halls are being adapted for a few hours a week. It is possible to do that. There is no point in the hon. Lady's shaking her head. She asked for a response and I have given her a reasonable response. We all have the same problems.

Let us see what happens in the coming months. Some people from the hon. Lady's own party are campaigning on the matter. Her neighbour, the hon. Member for Clwyd, West (Mr. Thomas), is campaigning on it now, a bit late in the day. He is getting on the bandwagon. [Interruption.] Not a Hague wagon, but a bandwagon.

I shall leave the subject there. I have flogged it enough, and I do not want to bore the House. However, it is part of the question of social exclusion. In rural areas, public transport is, alas, very poor, and this will mean people having to travel distances for basic provisions. That is the problem facing some of our rural communities.

I ask the Secretary of State whether it is possible to shift the Government's emphasis to encourage small and medium-sized enterprises to take on labour. The truth is that 90 per cent. of the businesses of Wales are small and medium-sized, and many are in rural areas. That is something that surely could be done. There is the question of objective 1 money being used for it, in conjunction

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with Government policy. I hope that we could look at this in order to assist the growth and revitalisation of rural areas.

Mr. Wigley: My hon. Friend has emphasised the crisis hitting the rural areas, where the post offices are under threat. If they are under threat now, they will be that much more under threat if the changes are made. That does not apply only to rural areas. Sub-post offices in suburbs and some of the mining villages in the valleys will equally be under threat. People in those communities will also be deprived of the services on which they depend.

Mr. Llwyd: Certainly.

I have made my point about the rural areas. There is a genuine crisis. The hon. Member for Brecon and Radnorshire (Mr. Livsey) was right to speak as he did about our problems.

On the positive side, I welcome the new deal, despite the cost of implementing it. It is a step in the right direction, and I am pleased that it is happening. It is having some effect. As the Secretary of State said, it is having an effect in rural Wales as well. It is disproportionately less, because of the sparsity of population. Nevertheless, it is a step forward.

In conclusion, I urge the right hon. Gentleman to look at the problems of rural Wales and do what he can, in conjunction with the First Secretary. We owe it to our constituents to ensure that we have a revitalised rural economy. If we do not, we shall fail our young people, who have to leave to look for jobs, and we shall imperil our culture, language and everything that we all hold dear. Large swathes of inhabited Wales will disappear from the map.

The right hon. Gentleman is a serious politician, and I hope that he will take this message on board.

5.14 pm

Mr. Denzil Davies (Llanelli): Given that, as my right hon. Friend the Secretary of State pointed out, this is the first Welsh day debate since the Assembly has been up and running, I am tempted to engage in a brief discussion of the relationship between Westminster and Cardiff bay, but, because of the few minutes available to me, I shall not do that. Instead, I shall speak of what is understandably the hottest subject in Wales: objective 1 status. When my right hon. Friends the Prime Minister and the Chancellor of the Exchequer secured objective 1 status, they also secured about £1.2 billion from the European Commission.

Mr. Caton: I hear what my right hon. Friend says, and I have heard the Prime Minister, the Chancellor of the Exchequer and, indeed, the Secretary of State make the same claim. Moreover, I have heard members of Plaid Cymru claim that their party secured objective 1 status. But should we not give credit where it is due? The Tories secured objective 1 status for us by running down the economy during their 18-year tenure.

Mr. Davies: I shall resist the temptation offered by my hon. Friend, and concentrate on the good work done by my right hon. Friends in Brussels. I do not know the

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extent to which they realised that, although that £1.2 billion is very welcome, something approaching another £1.2 billion from the Treasury was needed to match it. If the Chancellor did not know that at the time, it must have come as a bit of a shock to him on his return. Perhaps the moral is that it is dangerous to be at the heart of Europe, because we do not know what we will get from Europe at the end of the day.

It may not be necessary to draw on all those guaranteed funds if and when they arrive, because funding for projects may come from other sources. Some may come from local government; some may come from other public bodies; some may come from voluntary organisations. Hopefully, much of it will come from the private sector. Indeed, if projects are not financed by the private sector, they are probably not very good in any event, and are certainly not the wealth-producing projects that we want. However, there must be a lender, or provider, of last resort. The Treasury must be the provider of last resort if the £1.2 billion is not matched elsewhere, and the Exchequer must give a guarantee to that effect.

We in Wales may think that this is our peculiar problem, but I understand that it is also a problem for areas in England that have secured objective 1 status. The problems in Yorkshire are probably as great as those in the valleys of south Wales--and I believe that Yorkshire has obtained close to £1.2 billion. We all know of the problems in Liverpool, and those in Cornwall. This is not just a problem for Wales; it is a problem for the British Exchequer, for the British taxpayer and, ultimately, for the House, because the Exchequer is accountable to the House.

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