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Lord Haskel: My Lords, before the noble Lord sits down, perhaps I may point out to him that the press release from Barclays to which my noble friend referred states that the bank will abolish its disloyalty fees until the new methods of charging can be introduced with pre-notification.

Lord Newby: My Lords, I am grateful to the noble Lord. This demonstrates that this is a difficult and confusing area. I find it difficult to know quite what is meant, other than that they may possibly put more than £1 on the charges after 2001. I am sure that Barclays will take note of this debate. Indeed, I am sure that we shall all receive a clear, detailed letter within the next few days explaining that I cannot possibly be right in thinking that the bank will really increase its fees any further.

The real question is how we can move this agenda forward. My suggestion is not a purely regulatory one, although I believe that that is relevant. We should be asking the Social Exclusion Unit to look at this, not just in terms of analysing the problem but also of producing components of the solution and driving them through Whitehall. Perhaps I may introduce a really controversial element to the debate: I actually think that this would be an extremely useful issue for consideration by a cross-cutting committee of your Lordships' House, which I think should be looking at social exclusion. However, I do know when I am beaten. We may have to wait sometime for that to happen.

As I said at the beginning of my remarks, I am extremely grateful to the noble Lord, Lord Graham, for initiating this debate. Clearly this issue must be kept under review, but tonight's debate has made a very good start.

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8.22 p.m.

Baroness Miller of Hendon: My Lords, I must begin by declaring an interest. I, my husband, my sons and our family business have been, and are, very long-standing customers of Barclays Bank.

Many years ago there was a very successful bank advertising campaign. I cannot remember whether it was on behalf of one bank or on behalf of the bank advertising association. However, it depicted the bank manager lurking in a cupboard at the customer's home. The implication was that bank managers were not frightening but nice, friendly people who were there to help people at any time.

Bank branches have now been transformed into profit centres. Facilities that used to be given free, as a customer service--such as the provision of references--are now charged for. Working at a bank, which used to be the very epitome of a job for life where an able and educated employee--whatever his or her background--could climb the promotion ladder, is now an extremely precarious occupation as the banks and other financial institutions shed jobs, thousands at a time, and as automation and computerisation take over.

The advent of the bank cash machine, the so-called "hole-in-the-wall" machine, has further depleted the number of jobs at the bank counters. But what a boon those machines were trumpeted to be when they were first introduced, especially when the banks were closed on Saturdays. You can get cash any day and at any hour of the day or night. All you need is your card and the ability to remember you PIN number. You can even collect local currency abroad--so who needs travellers' cheques? There is even a row of those machines down in the basement of this building. Someone actually asked me whether I used them and I said that I do not use them very often because my best hole-in-wall bank is my husband. I just ask him and let him go down and use it if he is available. I always make jokes about my husband when he happens to be watching the proceedings.

It has long been theorised that, with the advent of the credit card and charge cards, we would eventually evolve into a "cashless society". I think I can predict that that will never happen--not so long as we need what I call "walking about money"; that is to say, money to buy a newspaper, a bus ticket or a drink at the local. There are still huge numbers of people for whom credit cards, bank cards or access to cash machines are of absolutely no use whatever. Because they are without bank accounts or access to credit, usually because they are too poor, they just do not have the benefit of using such things. I suppose some people could describe them as "socially excluded". However, as the noble Baroness, Lady Greengross, explained exclusive and inclusive in such detail, I feel that I can delete that part of my notes.

For a large number of bank customers those machines have become an increasingly used and necessary facility, especially with the ruthless closing of smaller bank branches in villages and high streets that have failed to meet the criterion of being a profit

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centre. There are, of course, other means of getting cash out of your account without using a machine or queuing up at the branch. Many large supermarkets are willing to give you cashback when you use a bank cash card. But this service is not as altruistic as it sounds because it reduces the physical amount of cash that the supermarket has to handle at the end of the day and reduces the security risk. In her own small way, my mother acquires cash by asking our greengrocer, who is still old-fashioned enough to deliver, to change cheques for her.

I just mentioned handling money. It is not appreciated that this is the least profitable part of all the banks' business. In fact, they lose money to it. When the American serial bank robber Willie Sutton was eventually caught by the FBI, he was asked why he kept robbing banks. He replied, "Because that's where the money is". To be fair to the banks, which is rather hard in view of what everyone has said and the briefings and letters that have been referred to, all of those bundles of notes lying in bank tills and in their vaults are not earning the banks any interest. I suppose that that is one of the reasons why they feel they need to make this charge. The cost of installing the machines, of expanding their number, of maintaining and servicing them, of running the computer systems and of the inter-bank book-keeping that they depend on, to say nothing of the physical work that is needed to keep them stuffed with bank notes, may possibly justify some small charge.

However, we all believe that banks ought to be crediting their own customers with some of the benefits that they are getting by reducing the number of staff they need to employ and even because of the benefits that the banks get from interest on overdrafts, or from the free use of our money sitting on the current account. Even on the aspect of servicing competitor banks' customers, there is the swings and roundabouts concept because they, in turn, service yours.

I believe that the Government are having to reconsider their plans for the method of payment of state benefits. The idea of simply paying them into beneficiaries' bank accounts may not work because so many of them do not have these bank accounts. Moreover, such a scheme would destroy thousands of village post offices and the village shops that so many people need for support in isolated communities. I am not sure whether it was the noble Baroness, Lady Dean, or the noble Baroness, Lady Greengross, who made a point in this connection, but one of them said that if you actually have to pay for the service when you draw out your benefit, it really would be extremely ludicrous and most unfair.

There is, perhaps, another means of distributing small amounts of notes and coins that it is uneconomic for banks and their computer systems to handle. The local post office could operate a discretionary cashback facility to customers, which they could do even without any machinery other than the guarantee implied by the cheque card. In itself, that might alleviate the aspect of social inclusion that might be

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suffered by the less well-off or those without easy access to cash machines operated by their own personal bank.

Given the public concern that is being expressed on this whole matter, I congratulate the noble Lord, Lord Graham of Edmonton, on having brought this matter to the attention of your Lordships' House. The only pity is the timing. For example, had this debate taken place yesterday instead of today, this House could have sent a powerful message to that same board regarding our feelings on the subject, not necessarily as individual paying customers but as a voice of the public. We should regret that we were unable to do that before the announcement was made earlier this evening.

The impending report by the former telecoms regulator, Don Cruickshank has been widely leaked, including on the BBC "Watchdog" programme last Thursday. The noble Lord, Lord Newby, mentioned some of the recommendations and I shall not go through them again. Don Cruickshank thought that the charge should be capped and low. He thought that it should not be more than 15p to 29p.

Before I entered the Chamber this evening I turned on Ceefax to see whether there was any more information available than was issued in the press release. There was mention of a charge of £2.50. I think that has to be wrong and the BBC has it wrong. The noble Lord shakes his head; perhaps that is not wrong. However, I assume that that figure is reached from the £1.50 disloyalty fee and the suggested £1 surcharge. I do not know. However, I noted in an earlier press report, which I do not have with me, that Barclays Bank abandoned the disloyalty charge in October 1999. I am not sure where that takes us. However, as I am a customer of Barclays and I have been quite tough on Barclays, I ought to try to redress the situation one tiny bit, if that is possible.

In one of the briefings Barclays stated that it thought it would take three years to implement the necessary software changes. However, I understand from the news today that this will be done by January 2001. The same Barclays briefing states,

    "The amount of the charges should be clearly displayed on screen. Consumers can then decide, before they use a cash machine, whether or not they wish to proceed".

We would certainly all agree with that. Transparency, which was not evident before, is absolutely essential. As I said a few moments ago, it is most unfortunate that we did not have the opportunity to send a strong message to those attending the meeting in Harrogate before they made their proposals today. We could have sent them a simple message summarised in just 10 words; namely, "There should be moderate or no charges and full disclosure".

8.32 p.m.

Lord McIntosh of Haringey: My Lords, my noble friend Lord Graham expressed some anxiety about the timing of this debate. With the exception of the point that the noble Baroness, Lady Miller, has just made, I should have thought his timing was immaculate. We

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should consider what he has achieved by tabling this Unstarred Question six weeks ago. First of all, he gets Don Cruickshank to leak the important parts of his own report last Friday.

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