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Lord Ezra: My Lords, I thank the Minister for that Answer, but does he agree that the first effect of this policy has been to push the Post Office into the red for the first time in more than 20 years? It has had to write off some £570 million expended on the Horizon computer system, which was originally devised to improve the payment of benefits and which is now no longer required for that purpose. Secondly, does the Minister also agree that approximately 8,000 post offices--getting on for half of the total--will have 40 per cent of their revenues eliminated as a result of this policy and that this will seriously jeopardise their future existence? Does not the Minister accept that it has been a little unwise to introduce such far-ranging changes and reductions in revenue for the Post Office at a time when it faces more intense competition than ever before?

Lord Sainsbury of Turville: My Lords, the loss to the Post Office is due entirely to what is, in effect, an accounting provision which has made it write off this very large sum of money. At the moment, the underlying profitability of the Post Office is extremely sound and it appears that it should remain so in the future. We have adjusted the external financial requirement and the profit target to take account of the fact that the Post Office will be paying for this project from gilts and assets held on its balance sheet. We should not think that the Post Office is in any financial difficulty at the moment. The change will not take place until 2003--it is not taking place at the moment--which is an extremely sensible timeframe for doing this. It is very difficult to calculate the exact impact on individual post offices. People have the right

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now to move to the ACT system and will presumably continue to do so. To calculate the exact financial impact we shall have to know what payments will be made by the Benefits Agency and the post office counters network to post offices, both in these circumstances and the new ones. The timeframe is a good one. It should not push people into immediate difficulties.

Lord Islwyn: My Lords, does the Minister acknowledge that, up and down the country, there are many thousands of elderly people who do not have bank accounts? In turn, they regularly go to their local sub-post offices to draw their pensions and other benefits, to chat to friends and perhaps to seek a bit of advice. Can the Minister give an assurance that our Labour Government will do nothing to curtail this very reasonable practice?

Lord Sainsbury of Turville: My Lords, let me make it clear that, even with the new system, in the future recipients of benefits will be able to go to a post office to get cash in exactly the same way as they do at the moment. What we are talking about here is a systems change that will introduce an automated accounting system to the transaction and will ease the migration out of order books. It will still enable people to go to the post office to get cash in the same way as they have in the past.

Lord Elton: My Lords, is the noble Lord aware that the fact that something is to happen in three years' time does not make it any the less worrying? Is he further aware that the worry of many of us is that the last focal point in many rural communities will be extinguished if the average village post office ceases to be profitable, as suggested in the supplementary question of the noble Lord, Lord Ezra? Can the noble Lord tell the House whether the Government will look at the Post Office not only as a business--as was made clear in the first part of his Answer--but also at individual village post office counters as a matter of social importance and therefore political sensitivity?

Lord Sainsbury of Turville: My Lords, the Government are totally committed to the idea of maintaining a nationwide network of post offices. We are acutely aware that they play an enormously important role in the lives of the elderly and the less mobile. That is why the Prime Minister has asked the performance and innovation unit in the Cabinet Office to carry out an urgent study on the post office network to assess its contribution to the vitality of local communities, how it fits in with the objectives of the Government and what future objectives we should have for it. In the meantime, a great deal of action is being taken to help with the financial viability of individual post offices, including the introduction of the new pay system that gives postmasters fixed payments. Furthermore, we are working in conjunction with VIRSA to produce a leaflet which explains how local communities can support their local post offices. Lastly, action has been taken on rates so that very small post offices

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need only pay 50 per cent. These actions have been taken because the Government are well aware of the importance of the post office network within local communities.

Lord Peston: My Lords, does my noble friend accept that we have no better example of the failure of the free market than the behaviour of the commercial banks? They seem either to provide seven or eight branches of different banks in the same locality or no branches whatsoever. Can my noble friend reassure noble Lords by stating that the Government support the view that, particularly in small rural communities, the Post Office should provide a basic banking service--which it is well set up to do--essentially for the purpose of cash transfer? That would deal with an area of business that the commercial banks are nowadays anxious to be rid of.

Lord Sainsbury of Turville: My Lords, for most people a credit account of that sort should not attract any charges. As the Secretary of State has made clear, we certainly wish to ensure that those on income support get the full amount of money they are entitled to from their benefits and that no deductions are made from those. That point has been actively considered in terms of setting up an appropriate service.

The Attorney-General (Lord Williams of Mostyn): My Lords, we have entered the 18th minute and I know that the noble Baroness has tabled an extremely important Question.

Rights of Way: Horse-drawn Vehicles

2.54 p.m.

Baroness Trumpington asked Her Majesty's Government:

    Whether, in order to permit the harness horse equality with the ridden horse on public rights of way, they will rectify the anomaly in the Department of the Environment, Transport and the Regions' consultation paper, Improving Rights of Way in England and Wales, which puts horse-drawn vehicles into the same category as the motorised vehicle.

Baroness Farrington of Ribbleton: My Lords, we have given careful consideration to the responses to Improving Rights of Way in England and Wales, including the noble Baroness's proposal that we should distinguish between the rights of horse-drawn vehicles and those of motorised vehicles when using different classes of highway. We shall take those points into account when we introduce new legislation soon.

Baroness Trumpington: My Lords, I am very fond of the Minister, but does she realise that, although she has tried her best, 15,000 harness horse drivers will be disappointed that they have not been able to receive a more formal response to my Question? Does she further realise that on this matter they have the

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support of ramblers, GLEAM and the British Horse Society? Lastly, does the noble Baroness agree that it is vitally important to keep horse-drawn vehicles off our congested roads as much as possible?

Baroness Farrington of Ribbleton: My Lords, I am deeply sorry to have disappointed the noble Baroness, Lady Trumpington. I should have liked to have been in a position, when wishing her a happy new year, to be able to respond to her Question in the manner she wished. Given her great experience of this position at the Dispatch Box, the noble Baroness will be aware that parliamentary privilege prohibits detailed revelation of the contents of legislation in advance. However, I can say to the noble Baroness that one-fifth of all the responses to the consultation came from those with equestrian and carriage vehicle interests. In addition, Ministers and officials met representatives of various organisations. This Government listen carefully and we shall pay full regard to those responses.

Lord Burnham: My Lords, when the House of Lords was the House of Lords--namely, before 1911--the horse-drawn vehicle could be equated with the motor vehicle now. How are the horse-drawn vehicle and the harnessed horse defined today from the point of view of legislation?

Baroness Farrington of Ribbleton: My Lords, the Question tabled by the noble Baroness relates to a consultation document issued by the Government. Further, the noble Baroness was certainly not alone in pointing out that the legislation did not seek to make distinctions on this point. We are dealing here with rights of way over which motorised vehicles are rightly prohibited. When the legislation is produced I hope to be in a position to demonstrate that the Government have listened to the points made.

The Countess of Mar: My Lords, does the Minister appreciate that many of these rights of way are not metalled but are ordinary dirt roads. One of the problems here is that wheels tend to cut up the roadway very much more than do horses' hooves or human feet. As landowners are responsible for maintaining these rights of way, will the Minister take that point into consideration?

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