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Noble Lords: Oh!

Lord Selsdon: My Lords, it is like a little operetta, with cast and orchestra singing off the same hymn sheet, but with different hymns orchestrated like some form of conference. However, I have great appreciation for their objectives and the points raised. It is probably the only time during my attendance in your Lordships' House that I have felt that we have been outnumbered by the Liberals but never outgunned.

It may be strange but people have political motives for speaking. I have a hereditary motive. My grandfather was postmaster general--a very great and important title, and an important job in those days. He sought desperately to extend the postal services and the sub-post offices into rural England. While others have sought to encourage decline, it is on his behalf that I speak.

For many years I was with the Midland Bank. It had 3,000 branches. One could always find a Midland Bank branch because it was always near a pub. There was no point in giving the address; the branch was always in the middle of the city and the community. Every day each branch received one application for charitable funds, with a further 10 per cent at head office. The bank manager was part of the community. Many managers would resist promotion in order to retain their position in the branch. I have often thought that I would like to have retired to a rural Midland Bank branch (if one exists any more) and be a lay preacher.

I have three reasons for speaking today. One relates to the speech of the right reverend Prelate the Bishop of Portsmouth. When I was at school--I see one of my school colleagues, the noble Lord, Lord Greenway, in his place--we had always to support a charity--I think that it was the church of St John in Portsmouth. When I joined the Navy I became a Portsmouth rating. I still remember my number: PJ963040. When I sailed in the Solent and around the Isle of Wight my lifeline in storm and calm--I was not the most brilliant of navigators--was Niton radio. Therefore I have a great affection for Niton.

I am not sure what the term "essential services" means. Services usually have to support something that is desirable or viable. As recent debates on agriculture have demonstrated, in rural England grade three land is no longer viable. Therefore the decline of rural England as an economic entity today is inevitable; perhaps it has already taken place. I would hate to say that the failure of any noble Lord from the Back Benches opposite to speak in the debate is indicative that the Labour Party has no interest in the rural community or people. We have, to an extent, become a country of corporate communists. Everything is corporate; everything is controlled.

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The community and the individual have been destroyed to some extent by circumstances and by events that we have failed to foresee.

When the Prime Minister recently visited the west country--he would have been more openly attacked had he not fled from one destination to another--it was strange to hear him say, "We must modernise. That is the solution". As the right reverend Prelate pointed out, one cannot modernise in one go. There has to be a period of gestation and change.

I was brought up to believe that the pillar of the community was, first, the Church. One had to go to church. But I find now that the first to close the church buildings is the Church itself because its flock has diminished. As do others in rural communities, the churches have to lock their doors because they may be robbed. It is an amazing change. Because I sometimes had to read lessons in church, I used to panic--as I may do when having to make a speech in your Lordships' House--but the Bible was always there to read in churches. I was brought up on the old edition of the Bible; I do not like the new edition. The role of looking after one's neighbour within the community is good; the Church always undertook that. We were grateful for the vicar. (I have always referred to everyone, including important people like bishops, as the vicar.)

The role of the policeman has been mentioned today. When a youth--a term no longer used--had committed a misdemeanour the policeman might put into the bottom of his glove a few coins and give the youth a clip round the ear. That was a known discipline. Within the community people knew "whodunit".

Then we come to the landowner. My grandfather on my mother's side taught me that one had to look after anyone sick or ill who had worked on the farm. I remember, with an old nanny who stayed with my family for 90 years, being made to walk on my own, sometimes returning at dusk, with a basket containing a bottle of port, a chicken and some eggs, for those on the farm or within the community, perhaps in tied cottages--which others tried to get rid of later.

Then there was school, and the school teacher, respected by society, who often received recognition for work outside the school in the community. That was another part of the community.

However, it was the banks and post offices which became an essential part of life. One needed communication and money. Money oiled the wheels and made the world go round. The closure of banks destroys many historic ingredients which cannot be replaced within a community. The presence of building societies in town centres to replace shops is another matter. And we add to that the closure of the post office, seeking to replace the service through bank accounts. I had the privilege of being involved with the launch of the original Giro system, introduced many years ago. In those days, only 30 per cent of people had bank accounts. Some said that no more than 30 per cent should have bank accounts. Bank accounts cause anxiety today; and the

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banks have forgotten the one basic principle of a bank manager: "Know thy customer". It is almost a legal requirement within banking that one should not do business with people one does not know. Nowadays it is impossible for a manager (if such he is called) to know anyone. He is protected by systems which take the relationship back to a branch or centre miles from the community.

We have found that economic circumstances have destroyed the community environment. How can that be corrected? Let us take the Church. It is part of the community whatever one's religious beliefs. It is a meeting ground. More people now go to church at Christmas than at Easter. On the continent of Europe the attendance at many churches, Catholic or non-Catholic, is relatively high.

The post offices should not be closed unless there is a suitable alternative. People with pensions do not want to have money transmitted electronically to bank accounts. There are many fears. Recent reports have indicated that the security services will examine the Internet. We know that electronic transfer systems are not perfect. We know that anything electronic is not perfect. There is no human element; and some people believe that nothing exists unless one can touch and see it. Payments to people through post offices have been invaluable throughout history. To remove those is a major mistake.

We have to consider why these things have occurred. Let us take transport, an issue which noble Lords beside me support strongly. I wonder why, when we have North Sea oil, we have the highest transport costs in the whole of the European Union. We have the highest prices for petrol, the highest prices for cars, the highest bus fares, the highest train fares and, until recently, the highest fares for internal air transport. That may be accidental or the political demands of government to tax the motorists and receive as much revenue as possible from the transport sector. That does not make sense.

Why do we penalise the old who have less money? A transaction within the Post Office costs about 70p. If it is for only £2 or £3, 70p is a large proportion of it. For breadwinners and earners, the costs of banking and making financial transfers are not as proportionally high. When we are over 60, we receive various kinds of support; for instance, from British Midland Airways when we fly abroad. Why should we not consider providing support for the old and retired people in urban areas, as we do in inner cities and other areas?

I do not want to criticise noble Lords opposite or their Government, but I believe that the Government have forgotten how to care for people. The Ministers care for people, but their hands are tied. The debate has raised issues which, as regards services, may not be financially essential or desirable, but the removal or destruction of such services destroys a large part of our country. That is something that we cannot afford.

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5.51 p.m.

Lord Phillips of Sudbury: My Lords, I do not know how to respond to the strictures of the noble Lord, Lord Selsdon, about these Benches. Perhaps it is best to pass over them and treat the matter with good will.

I want to remark briefly on topics that have been raised. First, I refer to the suggestion made by the right reverend Prelate the Bishop of Hereford that village shops should attract charitable status. I have been pursuing that rather hopeless task for a long time and I know that the problem is that village shops are not exclusively charitable because they serve the needs of all the inhabitants of their catchment area, not merely the poor and needy. That is the stumbling block.

I turn briefly to the predicament of village shops. First, I must declare an interest as a patron of a charity called VERSA, the Village Retail Services Association. The noble Baroness, Lady Byford, who is also a patron, will speak about the charity, too. Village shops and institutions are making a vigorous attempt to preserve and better themselves. One such attempt is SAVE, Sainsbury's Assisting Village Enterprises. It is an imaginative partnership in which Sainsbury allows village stores to stock its standard products at standard prices. Thus, it does good to both the local inhabitants and the stores. It is an imaginative effort and is to be commended. About 200 stores are utilising it and I suspect that many more will do so.

As regards rural police, we have heard a great deal of informed comment not least from my noble friend Lady Harris. My home town of Sudbury in Suffolk is a thriving market town--it no longer has a live market--of 20,000 people and serves at least 30,000 more. Its local police force has been so reduced in numbers and competence that last week, at an incident in one of the town's off-licences in which a gang of rowdy and, I am happy to say, not-too-brutal youths was causing trouble for the manager, it took an hour for the police to arrive. They came from Bury St Edmunds. Indeed, it took them one and a half hours to arrive at the site of an accident in a village just outside the town. They came from Felixstowe, which is 40 miles away.

I want to raise briefly the issue of rating relief. It is utter nonsense to allow second home owners rating relief. Where that derived from and the justification for it is, I suspect, beyond modern understanding, but surely we can abolish it.

I now turn to the main purport of my comments tonight: law and justice locally. I do not confine myself to villages or market towns because the subject of the debate is communities, which exist also in the larger cities. Where they do not, it is vital that we encourage them to coalesce and to revive. I am sad to say that legal aid, which I am sure noble Lords will agree is a crucial pillar for the poorer sections of our communities, particularly where they are not thriving, is not in good fettle. We had long and anguished debates on the Access to Justice Bill and I have to tell the House that the Legal Aid Practitioners Group, which is the front line of legal aid service providers, is in a state of alarm at the degree to which the new

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regime discourages solicitors from making their services available to legal aid clientele. Only this morning, an inner London solicitor told me that each day he is turning away between 30 and 50 individuals seeking legal aid. That is not even being done on a carefully considered individual basis; people are simply being turned away in shoals. That is the story across the country.

The simple reason is that this year legal aid rates of remuneration have been frozen for the eighth year running. I am not talking about real remuneration rates; I am talking about absolute remuneration rates. The level of remuneration for legal aid has fallen eight years in a row and it is now a serious issue in terms of maintaining communities of all kinds at a point of the greatest pressure.

I should like to spend five minutes talking about the position of local courts with regard to the strength and health of local communities. Perhaps I may again refer to my home town of Sudbury. Since the war it has lost its Quarter Sessions and county court, and its magistrates' court is now under threat. In 1998, Suffolk got rid of five magistrates' courts, leaving five in existence. We are already one of the most, if not the most, underserviced counties as regards magistrates' courts facilities in the country. The basis on which closures are undertaken is a matter which I am sure your Lordships will want to contemplate and which I hope that the Government will want to review. It is common ground that local justice is important in all manners, aspects and dimensions. One cannot have justice of the people, by the people and for the people if it becomes a distant enjoyment.

The main reason given for the closures, which are occurring in large numbers all over the country, is on grounds of efficiency, particularly on grounds of better facilities as regards premises. Perhaps I may refer to an Answer which the noble and learned Lord the Lord Chancellor gave to a Question that I asked on 7th February (col. 385 of Hansard) about court closures. I asked whether there would be taken into account the extra travel costs and time spent by users of courts when, after local court closures, they had to attend more distant, alternative premises. The noble and learned Lord answered that it was important that facilities were not substandard. He said that the use of,

    "satellite courts, for example parts of local council chambers which lacked essential facilities"--

although he did not say what "essential" might mean--should be terminated. He talked of "secure accommodation", although where a prosecution case involves someone in custody whom the police consider to be particularly dangerous there is no problem about having him transferred to a larger court complex. He also talked about,

    "waiting areas for victims and witnesses away from defendants; consultation rooms; and access for the disabled".

He referred also to the lack of "reasonable staff accommodation" and to "unsound" courts in terms of structure. He went on to refer to a variety of other reasons for closure.

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There is a heavy preoccupation, if I may express it in that way, with premises. I am bound to say that it is not a preoccupation which most users of the courts share and it can go far too far in the balance which must be struck between keeping open a rather old and old-fashioned court and closing it and moving to a shiny new complex 20 miles up the road.

Perhaps I may refer to the case of Haverhill, a town whose court was one of those closed in 1998. It has a population of 20,000 and is one of the fastest-growing towns in Britain. It has serious problems which are not typical of the county of Suffolk; for example, at the last council elections it had a turnout (I believe I am right in saying) of 7 per cent. It has a higher than average crime rate. The report which provided the basis for the recommendation by the Magistrates' Courts Committee for its closure referred to the court's premises in these terms:

    "There are no roads signs to the court".

It added that there was no private access to a telephone for solicitors.

    "There are no refreshment facilities",

it opined; and,

    "There is no security guard at the court".

Oh dear! Then, the crowning criticism:

    "The women's toilet was observed to be in an untidy state with the paper towel dispenser being too small for the towels so that it could not be closed properly".

My Lords, one cannot have courts where dispensers are too small for the paper towels which need to be dispensed from the same! The whole matter is lunatic and ludicrous.

The consultation which is carried out with regard to court closures is grotesquely inadequate. The solicitors who use the court were not asked what they felt about it; nor were the users. Above all, in coming to their finale as to the financial savings which would accrue (we are talking about employee, premises and facilities cost savings), the total saving for the Haverhill court would be--believe it or not!--the princely sum of £11,160 a year. The saving of that, dare I call it, "piddling" sum set against all the other non-financial aspects relevant to the closure of that court is beyond my understanding. In relation to the £11,000 saving, the report stated:

    "It does not account for any additional expenditure that may be placed upon other organisations/individuals as a result of such [closure]".

The expense to the public of Haverhill of now having to go to Bury St Edmunds, which I believe is 15 miles up the road, or Sudbury, which is further than that, is enormous. It involves delay, bus costs and frustration. One-fifth of households in that town and vicinity do not have a car, and the residents suffer from the paucity of travel services in the countryside. I do not need to go on; others have said it.

Finally, I urge the Government to practise what they preach in terms of joined-up government. Other parts of the governmental establishment are saying things that are not consonant with some of the things now taking place in the countryside. I refer in particular to court closures. Because I believe that it is

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so good, perhaps I may read quickly from this year's Report of the Policy Action Team on Community Self-Help:

    "self-help is an end in itself, as well as a means to an end. It is at the core of the empowerment of communities ... It is about involvement and consultation, but also about moving towards self-sufficiency. It is, in its purest form, about communities shaping their own destiny--doing, not being done to".

How absolutely true that is.

I know that other noble Lords have referred to the matter, but it cannot be too strongly said that one cannot continue to salami-slice from outer communities the services that they are able to provide for themselves without having a catastrophic impact on those communities. That is particularly the case in terms of the leadership of the communities. I give as an example the courts. If one takes away from a town the solicitors, police, social workers and others who service the courts, those people will go to the nearest large or larger town. One is therefore inflicting body damage on the ability of that community to help itself out of its particular problems.

Leadership is all; self-sufficiency is all. As do many other noble Lords who have spoken in this debate, for which we are so grateful to my noble friend Lord Rodgers, I hope that the Government will take back that message and relay it across the departments so that it has real impact in other areas of government.

6.5 p.m.

Lord Clement-Jones: My Lords, in responding directly to the noble Lord, Lord Selsdon, the part of the hymn sheet from which I intend to speak today is that which deals with the question of access by the public to primary healthcare services; that is, those which are essentially the first port of call, such as GP surgeries and accident and emergency services. Therefore, I hope that the Minister is relieved to hear that I shall not go on at length about the Government's record on waiting lists and waiting times, as those relate effectively to secondary care.

To date, access to and quality of health services have formed an important part of the campaign for the London mayor. It is rather ironic that in the Bill there is so little formal power for the mayor over health matters, despite considerable pressure on the Government during the passage of the Bill. However, I have great confidence, particularly as a result of the London mayor campaign, that in practice the mayor and assembly will have a major influence on health policy.

London has a disproportionate number of people who can be considered to be in particular need of primary healthcare services. We have some of the worst areas of deprivation in this country. A recent survey carried out by the NHS last October showed that the universal complaint by those surveyed in central London was that they had too little time with their GP, it took too long to obtain an appointment and there were major difficulties in arranging home

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visits. London certainly has particular groups with whom we should be concerned, particularly in the inner city.

There are old people. There is growing evidence that the elderly are being discriminated against and are now the victims of a concerted rationing of treatments by the NHS. There are the poor. There is now evidence that the poor are being penalised unfairly by the health service. Noble Lords may have seen reference to a survey of 26,000 Scottish heart patients conducted between 1986 and 1997 and published recently in the BMJ. It showed that poorer patients and younger female patients in particular were less likely to be classified as urgent and, as a result, had to wait an average of 24 days longer for surgery--24 days longer!

Then there are ethnic minority groups, particularly in the inner city, and also those who suffer from mental health problems. Again, the number is disproportionately high in the inner city. However, as noble Lords have spoken so eloquently today about the problems of isolated rural communities, we must not underestimate the problems in those communities. Recent figures from the Royal College of Nursing indicate that over 80 per cent of rural parishes do not have their own GP. Also, we must not forget that on average there is a greater proportion of older people in rural areas rather than in urban areas.

In the name of modernisation, the Government are implementing sweeping changes across the NHS, from the patient-practitioner interface to the authorities responsible for providing primary care. Those changes are having, and will continue to have, a profound effect on the structure and delivery methods of the health service in this country. It is vitally important that those most in need of the support services are catered for by these changes and are not left trailing in their wake.

Perhaps the most high-profile example of the health service front line is accident and emergency departments. Recently, the Government announced a £115 million capital investment in accident and emergency, designed to enable improvement schemes to be carried out in 182 hospital trusts in England. Yet, although we welcome that level of capital investment, there must be doubts as to whether the investment will solve current problems. The recent survey by the Royal College of Nursing and the Association of Community Health Councils highlighted a number of horrendous situations: an elderly woman with a broken pelvic bone left on a trolley for 40 hours in the accident and emergency department of Northwick Park Hospital, Harrow; an elderly man left to wait on a trolley for over 30 hours at the same hospital; an 83 year-old woman who died of burns after being left to lie by a boiling radiator at the Royal Surrey County Hospital. Those are just a few of the horror stories revealed by that survey.

The announced investment in the infrastructure is therefore welcomed, but surely a large part of the battle concerns investment in staff and their recruitment, as that survey made absolutely clear.

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The survey clearly demonstrated that the lack of staff beds elsewhere in the hospital is the major cause of bed blockages and delays in accident and emergency departments. What workforce planning assumptions are the Government making to go alongside the bricks and mortar improvements? Will the Government's new proposals for local workforce planning achieve what is necessary to increase the number of doctors in accidents and emergency departments?

There is also a very worrying tendency for the left hand not to know what the right hand is doing in NHS planning. The NHS is in the process of closing 80 accident and emergency departments nation-wide, while figures for emergency cases have steadily increased from 3,700,000 in 1997-98 to 3,900,000 in 1998-99. These closures are already creating major problems of access for the public in both rural and urban areas. This, added to the widespread closure of community and cottage hospitals, represents a massive loss of amenity and access to the Health Service. How do all these closures square with the Government's commitment to improving health and tackling health inequalities, which was one of its key health objectives in the public health White Paper, Saving Lives: Our Healthier Nation.

One of the key issues before us all, recently highlighted by the BMA in their publication Shaping Tomorrow: issues facing general practice in the new millennium, is the future of GP practice. Demand for primary care in the future will need to be met in a variety of ways. I welcome many of the innovations that are taking place, such as NHS Direct. According to the consumer surveys, NHS Direct is garnering high praise among its users--in some cases as much as 97 per cent. But there are issues surrounding NHS Direct, especially in its relationship with the voluntary sector specialist helplines for the mentally ill who need access to those specialist helplines, and that interface is not yet coherent.

It is also not clear whether adequate provision is being made for the needs of ethnic minorities, in particular with regard to the language barriers that they face. Neither is it clear what impact NHS Direct will have on GP workloads. There are some very divergent views, with statistics being quoted on all sides, as to exactly what the impact will be. Claims are made that it will reduce the workload of GPs. It is far from clear whether that is actually the case.

In principle, I also welcome the introduction of walk-in centres. They will certainly meet a need for much better access to primary care services. But the location of some of the existing and forthcoming walk-in centres, which will total 36 in the pilot schemes, casts some doubt on the Government's commitment to improve health in the most deprived areas. Part of the Government's argument for walk-in centres is that they will provide a filter for hard pressed GP practices in deprived areas. Yet newly-opened sites, such as Fulham, Soho, and forthcoming locations including Bath, Loughborough, Manchester Airport and the Wirral, are hardly in the most deprived areas. By what criteria are the Government deciding the location of these centres?

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Whatever the innovations, I am convinced that the backbone of primary care will continue to be the GP practices. That is why I welcome the 300 or so personal medical services pilots which are now being developed throughout England. These, in some cases, involve developing existing practices and setting up new practices with salaried GPs who can concentrate solely on the provision of medical care without the need to concern themselves with running the infrastructure of a practice. A notable example of one of these PMS schemes is the Pennywell estate in Sunderland, where PMS has provided primary care when none previously existed. That particular practice now has 2,000 registered patients, and that is a testimony to what can be done if proper innovation is applied. There is now on site a team of doctors, nurses and other health workers, catering for some of the poorest and most socially disadvantaged estates in the country.

I also welcome some of the NHS beacon examples, such as the rural downlands practice in Berkshire, which covers 13 villages, with which I am familiar, where they are developing a model of patient partnership. Their response to the rural isolation of their patients is to run a mini-bus service in which they can bring their patients to surgeries and deliver medicines to their patients. There is little doubt, however, that these new initiatives are tolling the bell for the traditional single practitioner doctor. In the BMA publication, Shaping Tomorrow, there is a general consensus that the traditional family GP to whom one goes throughout the course of one's life is very likely to disappear. Calls for on-demand appointments, and particularly out-of-hours services, make this practically inevitable. Single GP practices simply cannot provide these services. There is a likelihood with a multi-partner practice of patients seeing many faces rather than one familiar face.

Some doctors are concerned that easy access to medical care may well result in a deterioration in the quality of care provided. I am not persuaded, however, that this will result in a deterioration. One of the problems that besets primary healthcare in London, particularly in east London, is the number of single practitioners who cannot provide the level and range of care provided by the larger practices to a clientele who desperately need better primary care.

I also welcome the fact that the recent development of the past few years may well mean that the front line for patients in the future will soon be a trained nurse potentially with the ability to prescribe and administer a wide range of medication, rather than the GP or accident and emergency doctor. I believe that this has the potential to provide much better access to healthcare and a better use of scarce medical skills for the benefit of patients. It will also help to ease the current intolerable workload on doctors. I noted that the right reverend Prelate the Bishop of Portsmouth referred particularly to this point.

In this context, the removal of barriers to nurse prescription is of enormous importance. Perhaps I may ask, therefore, why the Government are not pushing further and faster ahead with this than they have to date. District nurses and health visitors, with

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appropriate training, now have limited rights to prescribe. Why are practice nurses in particular not being given prescribing rights? Surely they are in the front line. We should be ensuring that they do, with sufficient training, have the right to prescribe. The Government's intentions in this respect need urgent clarification.

Although many of the changes that I have mentioned are welcomed, there is an important issue surrounding the potential loss of continuity of care, particularly for the elderly, those with chronic complaints and the mentally ill, where multi-practices are involved. The management of these multi-practices and a very close relationship with patients will be absolutely crucial, and I very much hope that the PMS pilots and the NHS beacon schemes will provide some of the answers. However, I believe that one of the key areas in which we can find answers is the area of community pharmacies. I believe that part of their role should be to provide that level of continuity. They have a very important role in the community, but yet again we see no strategy on the part of this Government. The Government promised a community pharmacy strategy about two years ago and we are still waiting for that strategy. We need urgent clarification of the Government's proposals in relation to community pharmacies, not just in urban areas but also in terms of the pattern of community pharmacies in under-served, rural areas, where the current subsidy scheme is of great importance.

There is no doubt that the NHS needs to modernise and embrace change, and it is heartening to see that willingness not only in the NHS but also among other health professionals. It is heartening, too, to see that the resources are, after three years of this Government, finally beginning to make themselves evident. Above all, we need to ensure that those resources are used in the most effective way and directed towards those in need of support, so that they can be provided with the services that they need.

I believe that the Government have begun to recognise the needs of those deprived communities, both in rural and urban areas. But it is not yet clear that they have pulled that together in a coherent strategy. They need to share their strategy with us, perhaps through the six task forces that were recently set up by the Prime Minister. But at all events the Government need to assure us that there is an integrated strategy and that the necessary resources will be provided.

There are a number of great changes taking place with important implications in all those new initiatives. Professionals are worried about the level of resources. Indeed, there is competition for resources between rural and urban areas. All those matters need to be resolved. The Government must make their intentions much clearer than currently is the case.

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6.20 p.m.

Lord Newby: My Lords, I wish to concentrate on the provision of financial services to communities and individuals in particular need. In that regard, the emphasis is equally on urban communities and rural communities. Indeed, it is worth bearing in mind that the very poorest communities in the UK are all in urban areas. There are very poor pockets of rural deprivation but the major concentration of poverty in this country is in the inner cities and urban areas.

Estimates of the number of adults in the UK without access to any form of bank account currently varies between 2½ million and 3½ million people. Most of those people are on very low incomes and their main source of income is likely to be state benefits. Without a bank account, people cannot receive or make electronic payments; they cannot deposit cash or cheques; they cannot obtain cash from cash machines or use retail cash-back facilities at the supermarket.

A lack of access to a bank account is not simply a problem in terms of not being able to plan your finances very well, to make savings or gain access to affordable credit. It is also extremely costly. Research by the Joseph Rowntree Foundation and Don Cruickshank's report on the banking industry both demonstrate that, for example, paying energy bills by standing order or direct debit could, or indeed, would, save a low income household some £50 per year, a figure which rises to £75 per year if pre-payment methods are used.

Given that there are substantial financial benefits in having a bank account, why is it that so many people do not have one? First, many people are simply refused them because they are seen as bad credit risks. Research by the Office of Fair Trading in 1999 showed that up to one-quarter of all applicants for a current account were refused and the main reason was the fear by the bank that the account might become overdrawn, remain overdrawn and the bank literally would not get its money back.

Secondly, many poor communities simply do not have banks. Therefore, why would anybody go to great trouble to open an account when there is no easy access to it? As noble Lords have already said, that situation has become worse over recent years as over 25 per cent of retail bank branches have closed and branches are concentrated increasingly in more prosperous areas.

There was an extremely interesting article in the Sunday Times last week about the situation in Skelmersdale, which no longer has a single bank branch. It used to have two or three. Therefore, not surprisingly, it has become an entirely cash-based economy and increasingly a black economy. Therefore, the lack of banking brings with it social costs which go well beyond the immediate cost to individuals who do not have access to the bank.

In that regard, I welcome the commitment by Lloyds not to close any further branches which are the last branches in that community. I only wish that other banks would follow suit.

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The third reason why people do not open bank accounts is that they often have little access to information about the type of banking products which may be available. No doubt many of your Lordships are bombarded, as I am, by mail shots inviting me to open yet another bank or credit card account, the last thing I need. The poor do not receive those mail shots. Nor are they regular subscribers to Which?, to Moneyfacts or to any of the magazines which give comparative information about financial services.

That high degree of non-banked adults can and must be addressed in a number of ways. The first and most important is the Government's plans, now well advanced, for basic bank accounts. Those accounts would not offer or allow overdrafts and that would overcome the poor creditworthiness problem which has excluded many poorer people in the past. The main banks are all committed to introducing those accounts by October. They are eagerly awaited and long overdue.

The Post Office is also looking at what it calls a universal bank, funded by the large commercial banks, which run in parallel with the basic accounts operated by the commercial banks. I am not quite sure whether that proposal is as welcomed by the commercial banks as it is by the Post Office but it too deserves serious consideration.

As regards lack of information among low income groups, the citizens advice centres have been grappling for years with inadequate resources in order to bring information on basic financial facts to those who seek it. Their resources are inadequate to the task. Yet when the Financial Services and Markets Bill is enacted, the FSA will have squarely in its remit a responsibility to promote awareness of financial products to consumers. It will need to do that vigorously and imaginatively among poorer communities. In my view, it should pay particular attention to educating teenagers, not only because they will then open bank accounts themselves but because they will also encourage their parents to do so.

All those positive steps will, however, be undermined if people do not have proximate physical access to banking facilities. That is where the Post Office comes in. Here, the Government's proposals on the automatic payment of benefits have threatened many post offices and cause many potential short-term problems.

But there are also major longer-term opportunities to use the Post Office network to deliver financial services to those without bank accounts. Of course, the short-term problem is that automated benefit payments threaten the livelihood of sub-post offices. In turn, that poses a threat to the viability of many communities, particularly rural ones, as many noble Lords have already described, in which post offices remain the focus of community life.

It poses a problem also for recipients of state benefits who not only do not have a bank account but who, for one reason or another, should not be forced to open one against their will.

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There are two major roles which the Post Office can play in dealing with those issues. The first is in providing financial services. Already, it is possible, if you are a Co-op bank account holder, to cash Co-op cheques at post offices. That facility should be extended to encompass more banks and building societies. The Post Office has already put out to tender to various banks a proposal to provide cash machines of the traditional kind in many of its branches. Again, that should be pursued vigorously.

Secondly, there remains the question of benefit payments. Here, an extremely sensible proposal for dealing with the problem has come from what at first sight is an unlikely source; namely, the Link network. As noble Lords will recall, Link sprung to notoriety a couple of months ago in connection with the row over banks charging for the use of cash machines. Link is the computer network which links all the cash machines owned by individual banks. The banks and building societies in turn, between them, own Link.

The Link proposal is that all those receiving benefits but without a bank account would receive a card, like a credit card, which could be used at any cash machine and would give the user access to, in effect, their own state benefits account. The account would receive all the benefits paid to an individual from whatever source; would be accessed like a bank account; and account holders could draw out money as and when they needed it. The scheme would be based, in large measure, on the existing cash machine infrastructure so there would be a low cost attached to introducing the system.

Such a scheme could also assist the Post Office. Link has been in discussion with the Post Office about introducing a simplified variant of the cash machine in which benefit claimants will be able to gain access to their accounts but instead of getting cash from the machine they would get a slip that they would take to the Post Office counter to cash as though it were a cheque. That would give post offices more business and would help to deal with the underlying problem of automatic benefit payments which could take away their business.

One desirable precondition for such a joint venture would be for Link to free itself from its current bank and building society owners. As the Cruickshank report has already proposed, Link should be restructured into a private sector company. That would enable it to raise the substantial funding needed if it is to engage in the new activities that I have described. It would also free it from any potential conflict of interest with the banks as owners and users of the network. In my view, at least the banks could facilitate such a restructuring of Link.

Enabling post offices to provide some degree of banking service along those lines is likely to be a key to their survival in many places, although in many cases that may not be enough. The Government have acknowledged in Clause 102 of the Postal Services Bill that subsidies may be needed. The question is when and under what circumstances such subsidies may be paid.

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Yesterday, the noble Lord, Lord Sainsbury of Turville, said of that clause that,

    "this is an enabling clause which will enable us, if necessary, at a suitable time in the future to produce a scheme to subsidise the post office network. It is not proposed to use it at present and we have not tried to put in place a system of subsidy which would not be appropriate at this stage".--[Official Report, 2/5/00; col. 982.]

Why not? Post offices are closing every day. How many will have to close every day, every week, every month before the Government feel that it is appropriate to consider putting in place a scheme that will allow subsidy to be paid? Can the Minister explain to the House what cataclysmic event within the sub-post office network would be necessary before Clause 102 in the Postal Services Bill may be triggered?

To sum up, I have described four matters that will go a considerable way towards combating financial exclusion: basic bank accounts; a high intensity awareness campaign; a greater use of post offices for day-to-day banking services; and benefit payments by personalised accounts at existing cash machines and new terminals at post offices.

Indeed, there will be a role for credit unions, as the right reverend Prelate the Bishop of Portsmouth mentioned. There will also be a role for LETS (local exchange and trading schemes) but the main progress to be made in this area will involve the principal banks and the post offices.

Financial exclusion has not had as high a profile as other forms of exclusion have had in the past. However, sorting out the problem is vital to building thriving communities. I believe that much action is now under way, although the Government are overdue in regard to giving high priority to the issue of access to financial services for communities that are in particular need.

6.33 p.m.

Lord Tanlaw: My Lords, listening to the previous 11 speakers has been rather depressing. I feel that underlining each speech has been a yearning for the good old days of times past: the time when the vicar and the bobby did their rounds in the parish and the village, the squire was in his mansion and the workers were at the doors of their tied cottages waiting for largesse. In the speech of the noble Lord, Lord Selsdon, one could almost hear the clang of the blacksmith's hammer on the anvil and of leather against willow at the village cricket match. Noble Lords have said that those were the good old days and they have asked what has happened. The House has heard nothing but a tremendously long whinge from one noble Lord after another about where this is leading us and that there seems to be no hope for the future.

In fact, that is quite right in some areas. It is debatable how much longer noble Lords like myself will be able to continue to declare their interest in hill farming. The future of hill and upland economies in the remoter parts of Britain must remain uncertain unless some new element is introduced which can

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retain the existing rural populations while creating fresh sources of income to subsidise farming and the other traditional businesses of the countryside.

My hill farm is situated in one of the remoter parts of Dumfriesshire. Getting a fresh loaf of bread or other essential requirements like banking, health and veterinary services involves a round trip of 30 miles. There are no signs of new industries, such as the forestry that there was in the 1960s, coming into the district to save the day. As has been said by a number of noble Lords, the lack of local services in the countryside, including education, shopping, banking and police, has accelerated a population drift to the towns and has discouraged an inflow of new residents or businesses.

However, I do not believe that noble Lords are aware that help may be at hand in the form of BT's new broadband telephone system, ADSL, or, to give it its full title, Asynchronous Digital Subscriber Loop. I believe that there is no need to whinge about the loss of the good old days. I wonder why no one, including the Prime Minister, whom I am informed apparently has listened closely to a briefing on the subject of ADSL, given by the chairman of BT, seems to have reacted to it.

Civil servants in the Cabinet Office have just compiled what, in my view, is an outdated and rather self- congratulatory document for the Prime Minister, and they too seem to have missed this latest development in information technology. The document in question is entitled Sharing the Nation's Prosperity, and is subtitled Economic, Social and Environmental Conditions of the Countryside. In spite of being 190 pages thick, with picturesque graphs and statistics, it makes no reference at all to the role of online services.

In fact, the statistics--the noble Lord, Lord Rodgers of Quarry Bank, mentioned one of them--show that death rates are lower in the countryside than in towns, but that is highly suspect. Although I can still drive a car, many at retirement age cannot. Therefore, they end their days in the towns as they can no longer look after themselves in the countryside. Once people cannot reach the services that they need, they have to move to the towns.

The noble Lord, Lord Rodgers, also avoided mentioning online services or information technology. That is sad. Yesterday the Minister for Science, in his introduction to the Postal Services Bill, at col. 936 of Hansard, gave the appearance of having no alternative but to press on with spending half a billion pounds on the ill-fated and outdated Horizon project to distribute social benefits. Why did he not make any reference to ADSL which I would have thought would be far safer and a more user-friendly medium to provide pensions and benefits to rural communities?

Incidentally, can the Minister explain to the House how Horizon, which I understand is based on a barcode system--itself outdated and which was never intended to be a security system--is the most up to date or the safest way to prevent the fraudulent receipt of benefits?

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What is ADSL? Just in case some noble Lords do not know of it, I shall refer you to last weekend's Sunday Times which summarised ADSL as BT's broadband Net connection capable of delivering voice, data and television into the home via existing copper telephone lines. According to BT, by next month over 7 million households will receive those services either through a television set-top box connected to the telephone or by a conventional Net connection via a telephone and a PC.

As from July, BT, and later its competitors, will be able to deliver, along existing telephone wires to homes in urban or remote environments, a complete range of online services that will include banking, shopping, unlimited radio, broadcast quality television, video films and e-mail. What is more, all this can be achieved without digging up the roads. We have the ability and the services available to provide these benefits without taking that course.

Medical and veterinary services in the countryside could be transformed by this service. A householder or farmer will, through ADSL, be capable of face-to-face communication with either a doctor or a vet situated 30 or even 300 miles away. Would not the marketing of sheep and cattle via ADSL be greatly enhanced by potential purchasers seeing for themselves the animals on site and the conditions in which they had been reared? Scottish beef and lamb could then be seen to be the best in the world and perhaps at long last receive a price to reflect that.

Much has been said in the debate about the role of the police. The police have telephones and for most rural householders the telephone is their only link to the outside world. The police can communicate face to face with a householder through this system. Indeed, any individual in the community can communicate in this way; the doctor or the vicar can use it. Why has this system not been mentioned so far? Indeed, why am I the only noble Lord who seems to read the newspapers? What has happened to the 6 million households who already have access to the system? The Government are set on modernisation, but I wonder where they stand on ADSL?

Could not the village hall or the local post office become local cyber centres? They could play a pivotal role in entertainment, distance shopping and home delivery from the nearest town via postal delivery services. At the moment, village halls remain locked for most of the year and seem to open only for occasions such as the annual flower show or to give shelter to itinerant morris dancers when it rains. Why cannot such halls become teaching centres for the new technologies? Why cannot they become meeting places for the old, the retired and village people who do not understand computer technologies so that they can learn? As has already been mentioned by one noble Lord, this is where the community can help itself to understand information technology without which--I include the village postmaster or sub-postmaster in this--it will be finished.

I do not see why postmasters should continue to exist if they cannot be bothered to learn how to work a computer. This is what the future is about.

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If postmasters want to have a future in the countryside, they have jolly well got to learn. The entire community is perfectly capable of taking this on, given proper support from the Government. ADSL is a revolution that is capable of transforming rural life. Why does it not seem to fit in with the Government's concept of modernising Britain, which they are so keen to do? I wonder whether it is a question of cost, or is it simply ignorance of what is available?

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