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Lord Selsdon: My Lords, perhaps the noble Lord will allow me to intervene. I like to feel that the pressure that we, on all sides of the House, could put on the banks would be considerable if it came from Leicester. In order to be the chief general manager of the Midland Bank, it was always deemed that one had to be, first of all, the manager of the Leicester branch.

Lord Whitty: My Lords, as my noble friend Lady Farrington and the noble Baroness, Lady Byford, are present, I am not going to disagree with that.

It is clear that in terms of both quality of life and economic viability, the financial sector is very important. We have made it clear to the banks that we

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expect them to play their part in eliminating financial exclusion, which is an important part of social exclusion. They need to develop appropriate products and delivery channels to ensure that they reach people in deprived communities. That does not necessarily mean that we can expect the reopening of all the banks that have closed over the past half-decade or so in both inner cities and rural areas. There is no single solution; diversity and choice are important.

I should say to the noble Lord, Lord Newby, that we are encouraging the main banks to develop accounts with no overdraft facilities and no frills--bank accounts which are appropriate for the kind of people who at present do not have bank accounts but whose failure to have access to financial facilities is not only an enormous financial loss to themselves but a social cost to the community as a whole. I am pleased to say that some of the banks are committed to this concept. We need to ensure that they all are. To respond to the noble Baroness, Lady Byford, we are not going to compel the banks to issue bank accounts to people to whom they would not otherwise issue them, but we are encouraging them to have a broader view of their role, which eventually must be profitable and commercial to them as well.

Baroness Byford: My Lords, I am grateful to the noble Lord for giving way. Is he able to comment on the article in yesterday's Independent on the establishment of a social bank for the 2 million people who do not have a bank account if the banks are not to be forced to provide banking services? If he is not able to comment, I quite understand.

Lord Whitty: My Lords, the noble Baroness has the advantage of me in having read the Independent yesterday. I am aware of general provisions in relation to social banking, some of which relate to what I am about to mention in relation to the Post Office.

Before we leave banking as such, there is a problem if banks do not seize this opportunity to play a more social role in these communities. There is a problem for them, and their image has seriously suffered. The other week I was accused of calling for a boycott of the banks when in the very same breath I had denied that I was calling for a boycott of a major bank. But that is the way it goes. What I was concerned about is the banks' boycott of customers. Indirectly, they are effectively boycotting some of the rural area customers who have relatively simple banking requirements. We have to change.

The noble Lord, Lord Newby, referred to new financial arrangements for the Post Office being part of the Link arrangements and to the Post Office's role there. It would be disingenuous to pretend that the Post Office is not also under serious pressure. It has lost 10 per cent of its network over the past decade. But we are committed to the maintenance of a nation-wide network of post offices. The role the Post Office can play may well change as a result of arrangements it is making with the banks. I know that the noble Lord, Lord Tanlaw, was deeply sceptical about the Horizon project, but in the immediate period it is technologically

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quite important--the automation of all post offices by 2001. To date, a quarter of them have been converted. As the noble Lord said, a significant amount of money is going into the Horizon project. That will be an efficient delivery mechanism, but it needs to be sufficiently flexible to move into the next stage of modernisation, including taking advantage of the ADSL operations, which even in rural areas will probably be commercially viable for BT.

In immediate terms, customers of certain banks--the Alliance and Leicester, again, the Giro Bank, the Co-op Bank and Lloyds TSB--already have access to banking services at post offices. We now have an extension to Barclays customers and Co-op Bank customers in Scotland and Northern Ireland. Once the Horizon programme is fully implemented, those agency agreements could enable the Post Office to play a major role effectively as a social bank but in co-operation with the banking community as a whole.

The right reverend Prelates, the noble Lord, Lord Selsdon, and others criticised the decisions in relation to the payment of benefits. We are committed to the migration of all benefit payments to secure electronic means by 2005. That has been made clear by my colleagues. However, we have also given--my noble friend Lord Sainsbury mentioned this yesterday--an assurance that those claimants who wish to continue to collect their benefits in cash at post offices will continue to be able do so. We will therefore see a Post Office providing both traditional banking services and locking itself into Internet-based services. One can envisage a situation where post offices develop beyond that, much on the lines envisaged by the noble Lord, Lord Tanlaw--either for banks or village halls or village shops--and where they form the basis in this Internet society of other information services for rural communities, or act as bases for larger retail outlets--the relationship between village shops and Sainsbury was referred to--as a way of delivering services, both physical and electronic, to the inhabitants of our more remote communities. Post offices seem to be well placed to play a major role in those developments, as do village shops and other village-based outlets.

The noble Lord, Lord Newby, asked whether we would trigger the clauses in the Postal Services Bill relating to subsidy. We are currently awaiting a report from the Performance and Innovation Unit on the future of post office networks. While we put the enabling power in the Bill, we will need to assess the situation in the future. The major revenue stream from the Benefits Agency will not cease to operate through post offices before 2003. In that sense we can take a reasonably medium-term approach to future potential subsidies.

Many other areas were referred to. The noble Viscount, Lord Falkland, referred to libraries. I accept some of what he said, but I also recognise that library services, particularly in some of the smaller libraries, need to develop and modernise. There was a fair degree of concentration on the health service. The noble Lord, Lord Clement-Jones, was to the forefront in referring to the need to develop the health service.

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We have established primary care trusts and primary care groups. We have established health action zones, which now cover 50 per cent of the population of England--some 13 million people--who live in deprived areas. The noble Lord referred to NHS Direct. I appreciate that there are differing views on that. I nevertheless appreciated the noble Lord's comments. We are talking here about a 24 hours a day, seven days a week service which already covers 65 per cent of the population of England. It represents a major increase in accessibility to NHS services and one which should benefit many of the more deprived people who do not have a continuing relationship with their GP, particularly in inner-city areas but also in some rural areas where there is not a convenient GP surgery.

There are substantial problems of investment, staff planning and motivation, to which the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Byford, referred. Many of those can be dealt with within the substantially increased allocation to the health service which the Chancellor announced in the Budget Statement. That will include the development of walk-in centres located in areas of which, one hopes, the noble Lord, Lord Clement-Jones, would approve, and well as some others. We will look at the way in which we use staff, including, for example, the prescribing powers of nurses and other paramedics. It will also involve mobile delivery services and the engagement of local pharmacies with GPs in order to provide a very direct and accessible service, particularly on estates and in rural areas.

I have rushed my speech and I have still managed to take up 26 minutes, which shows what a wide-ranging debate it has been. I hope that on other issues I may write to noble Lords, in some cases after consulting colleagues on their areas of responsibility. It has been a worthwhile and timely debate. I reject the deeply pessimistic note that the noble Lord, Lord Selsdon, struck at one point in his address. In order for us to address the problems of rural areas and rural poverty, and of inner-city areas and inner-city poverty and isolation, we need a combination of government action and of facilitating self-help in those areas. That involves both local and national leadership. It involves a degree of joined-up government. It involves co-operation between the private, voluntary and public sectors. It involves a serious degree of engagement of all public and private service providers in those areas. It involves reasonable access to essential community services.

How we define "reasonable" and how we define "essential" has probably not been completely addressed in the course of the debate. But we all know broadly what we are talking about and we all know that a significant percentage of our population currently suffers, and probably suffers more than it would have done in relative terms, and in some cases in absolute terms, from lack of access to those services, from isolation and from cumulative deprivation. Our neighbourhood renewal strategy must address those problems; and, together, we must address the prevalent trend in some of those areas; namely, of both

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public and private services in retreat--which means, in consequence, that those neighbourhoods are in retreat.

As I hope noble Lords will appreciate, the Government have made an energetic start. We do not believe that we have yet tackled all of the problems as effectively as we need to. We are building on that in terms of the allocation of resources and joining up activity, and in terms of the priorities of government. It is only a start. People in deprived communities striving to make a better life for themselves deserve more from us, and the Government are committed to ensuring that that happens.

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