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Baroness Hollis of Heigham: I do not understand that last question. The noble Baroness asked how, if people are not qualified to be banked, they will be banked. Who would not qualify to be banked, apart possibly from a bankrupt?

Baroness Byford: I thank the noble Baroness. I know that several people have applied to banks to be banked and the bank will not bank them. Therefore, they are not clients because the bank will not take them on as a risk. With the new measures put forward by the noble Baroness, that will not be a difficulty. Currently, banks do not take on everyone who applies for banking facilities. That is what I was trying to convey, perhaps not very well for which I apologise. How will the Government deal with the whole question of homeless people who apply for banking facilities or come to the social bank?

My next point touches on what my noble friend said earlier. At the moment, post offices handle all of these welfare benefits. Is it the intention of the Government that sub-post offices, part-time post offices, Crown post offices or even newly created post offices will deal with them? Will there be universal coverage? Again, I should like some clarification on that point. Lastly, will the Government forbid banks to charge at any time for the provision of basic banking services? Obviously, when banks offer services, most people are charged for that work.

These are important practical issues. I accept the Minister's assurance that claimants will be able to draw cash from post offices. However, for Members on these Benches and, indeed, on the Liberal Democrat Benches, questions still remain as regards the nitty-gritty of the arrangements. When I raised this matter two weeks ago, I was told that the Government were waiting for the PIU report. It was due to be published at Easter. That date slipped to May and I understand that publication may now be delayed until June or even September. Given the issues raised in our earlier debates on war pensions, I feel that this is another area where we wish to be absolutely clear on the detail before the Bill leaves this House.

Some noble Lords may wonder why I worry so much about these basic issues. I shall repeat what I said two weeks ago on the matter. When families get into difficulties, in particular when they break down, mothers left caring for children feel more secure when they know that they can go to the post office to claim their cash benefits. That is extremely important to them. Although it has been suggested that a form of social banking will be established for the whole family, some mothers will be hesitant about arrangements

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where the facilities for collecting cash for themselves and their children are moved to a joint bank account. It may be that at that moment their partners are people whom they do not and cannot trust in that respect. I urge the Government to consider this carefully.

I appreciate that the arrangements are not due to come into effect until 2003. However, as my noble friend mentioned earlier, post offices are small businesses and those who manage them need to plan for the future. I do not doubt the Minister's sincerity in her assurances that universal coverage will be achieved, but it is important to be clear on what will be put in place for small post offices during the intervening period. It has been suggested that subsidies will be paid. The Minister has already mentioned that provision. However, when I had discussions with a group of sub-postmasters two weeks ago, it was clear that, although they were pleased to learn that a subsidy would be paid, they knew that that would only be a short-term, stop-gap measure. Can the Minister enlarge on future plans for small post offices?

Sub-postmasters have also expressed concern about the management of the new systems by local authorities. Local authorities vary and may well interpret the regulations differently. What criteria will be set out to determine which post offices should receive the subsidy?

This is a complicated area and I apologise to the Minister for having put so many questions to her. However, she has kindly moved a step further forward since this matter was last raised by saying that the Government are considering the issue of a bank card. Perhaps she can take us even further tonight.

Baroness Pitkeathley: We are debating two issues here: first, that of benefits being paid by automatic credit transfer; and, secondly, the future of rural post offices. The two are not necessarily inter-related, although, as the former chair of a rural community council and the current president of one, I am fully aware of the problems faced by rural post offices.

As regards the issue of ACT, we need to understand how matters are progressing in this area. I believe that every year half a million people are choosing to transfer to this method of receiving benefit payments. Although many of the points made by the noble Baroness, Lady Byford, as regards access and so forth are without doubt true, so, too, is the issue of fraud and the cost of making giro payments. I seem to remember that half my working life as a social worker was spent chasing the giro that had not been paid, the giro that had been sent to the wrong address, or the payment book that had gone astray, with equal distress for the kind of families referred to by the noble Baroness. As I understand it, no one is to be forced to have his or her benefits paid by automatic credit transfer. I remember being in the Gallery of the House of Commons and hearing the Prime Minister say that this would not happen and that people could continue to be paid weekly or monthly as they wished.

As to the question of post offices--to which I feel a strong commitment, given my connection with the rural community council--I do not think that we

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should be too circumscribed in our view of the future of rural post offices or post offices in isolated areas. Given the opportunities that are opened up by electronic links, post offices can be the source of information for communities through e-mail, the Internet and so on. We should be unwise to take too limited a view; namely, that a change in the method of benefit payment would automatically have the effect on post offices that some noble Lords have suggested. We should think of the other opportunities that are being opened up to them at the same time.

9.45 p.m.

Lord Hylton: The noble Baroness, Lady Pitkeathley, has opened up a fascinating prospect for existing post offices and sub-post offices in the electronic age. That will take some time to become effective and to present a real source of income for those who are presently running those post offices. I take the view that we cannot afford to lose any more sub-post offices, certainly not in rural areas, and to some extent in urban areas. That is why I support the general principles of both amendments. I strongly agree with many of the points made by the noble Baroness, Lady Byford.

In the part of Somerset where I live, we have already lost a large number of post offices. Those that continue are often hanging on by the skin of their teeth and working on the narrowest of margins. The sub-postmaster's salary is often critically important.

Perhaps I may comment on the social uses of post offices, which go beyond their immediate functions and utility for the payment and receipt of benefits, for example. In my village we have a church and a pub, but we have no post office. The post office used to perform functions which neither the pub nor the church can effectively perform, because post offices are more accessible. You do not have to belong to the drinking set, or the religious set. They offer much more neutral ground and are valuable for that reason.

I understand that it is already possible, where towns qualify for the single regeneration budget, for credit unions to be promoted under that heading. Besides being valuable in their own right, they could spill over from a given town to its neighbouring villages. That could also provide a form of work in which those who are currently sub-postmasters could be effectively and usefully engaged. I hope that in this critical interim period, when we are trying to preserve the post offices that we have, the possibility of working credit unions into the whole scheme of things will be examined carefully by the Government.

The Lord Bishop of Hereford: I rise briefly to express strong support for the principle which I believe lies behind both amendments. However, I am not sure that the wording of either amendment meets the problem. The amendment of the noble Earl, Lord Russell, opens up the possibility that payment may not be by automated credit transfer, but it is not beyond the Government's ingenuity to think of another method of payment that is equally unacceptable. Simply to outlaw that particular means of payment is not wholly

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safe. If we are not talking about "belt and braces", perhaps the noble Baroness prefers "elastic and safety pins".

Baroness Hollis of Heigham: I cannot believe that the right reverend Prelate teases us at this late hour.

The Lord Bishop of Hereford: I apologise. The amendment in the name of the noble Lord, Lord Higgins, is also a hostage to fortune since we do not know when the legislation will come into force. Therefore, there is something amiss with both amendments. The principle behind them which has been eloquently expressed is that we must have cash payments not only for the benefit and peace of mind of people of very modest means, who depend on post offices and are used to operating a totally cash economy, but also for the benefit of the post offices themselves. The noble Lord, Lord Hylton, pointed out the critical importance of a post office in rural areas. If cash payments are not made the money is not recycled over the counter in the payment of council tax, water rates, television licences, telephone and electricity bills, the stamps on which people depend, and so on. People receive their cash in benefits and pay it back over the counter which is business for the post office. It is also business for the shop which is frequently integrated with the small post office. There is a critical economic mass which depends on those cash payments. We should like to receive an assurance from the Minister that cash payments will continue beyond 2003 indefinitely for those who want them. If we must have a card, can it please be referred to as a post office card without the word "bank"?

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