HC Deb 29 January 1980 vol 977 cc1105-8
3. Mr. McCrindle

asked the Secretary of State for Social Services what is his policy on the method and frequency of the payment of social benefits, and in particular the use of post office facilities.

9. Mr. Ioan Evans

asked the Secretary of State for Social Services what consideration has been given to altering the method of payment of social benefits by the Post Office.

15. Mr. Dormand

asked the Secretary of State for Social Services what proposals he has for withdrawing his Department's services from post offices.

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)

As part of the Government's campaign to improve efficiency, an ex- amination has been made of the arrangements for paying social security benefits, including the frequency of payments and whether the public should be able to choose payment of their benefits direct into a bank account. Changing these arrangements offers scope for saving taxpayers' money by reducing administrative costs. My right hon. Friend is considering a study team's report on these arrangements in conjunction with Sir Derek Rayner. Any changes emerging from this study will be made only after the most careful consideration of the social and other consequences and after proper consultation.

Mr. McCrindle

Does the Minister agree that to pay pensions and other benefits less frequently might cause a great deal of hardship? As many recipients are unlikely to have bank accounts, the suggestion that they should be paid in that way should be carefully investigated before proceeding. Will the Minister confirm that any suggestion of ceasing to pay social benefits through sub-post offices will mean that those post offices will experience great difficulty in surviving?

Mrs. Chalker

No one will be forced to have his payment made direct into a bank account. We wish to ensure that the most vulnerable groups in society—those on supplementary benefit and the very old—will be able to receive their payments weekly, and through post offices if they so wish. Other people may need to adapt to a different payment period that will strike a better balance between their wishes for fairly frequent payment and the needs of taxpayers who have to foot the bill. No one will be forced to receive payments through the post office. Those who are vulnerable will not be forced to receive payments other than weekly.

Mr. Ioan Evans

Will the hon. Lady assure the House that we shall have an opportunity to discuss the issues before the Government make a decision? Is she aware that many people receiving social security already have difficulty coping with a weekly payment, and a less frequently paid benefit would cause a great deal of distress?

Mrs. Chalker

When I saw the report, I raised many of these points. However, as has been done in many other countries, we must consider payment direct into bank accounts where that is desired by the recipient. We should, however, ensure that there is a choice. We should also ensure that we specifically help those families who have difficulty in budgeting, even on a weekly basis.

Mr. Dormand

We have heard similar words from the Government before without seeing any action. Is the Minister aware of the considerable hardship and inconvenience that will be caused, particularly to old people? That factor must be taken into consideration when she and other Ministers are contemplating so-called efficiency. The Minister said that there will be a choice and I hope that she will ensure that it is so.

Is the Minister further aware that many people have never even heard of a bank account, let alone possess one, and that the proposal will be of benefit to only a few people? Finally, what will the hon. Lady say to sub-postmasters who have invested their savings in their businesses and who may go bankrupt as a result of such measures?

Mrs. Chalker

In recent years the number of people opening bank accounts has greatly increased. The facility is being requested. The previous Government were making preparations for automatic credit transfer and we are doing likewise.

With regard to sub-post offices, there has been a lot of erroneous comment. It will not be a compulsory measure, as hon. Gentlemen are mouthing at me. I assure the House that we are considering the measure in great detail.

Mr. Burden

I hope that my hon. Friend and the Government will not make too much of a meal of the measure. Is it not already possible for people who wish it to have their pensions paid through a bank account?

Mrs. Chalker

I regret to inform my hon. Friend that, although a payable order may be sent to a beneficiary, it is not possible to have it paid direct into a bank account. That is part of the proposal that we are considering as a result of the study team's report?

Mr. Orme

Does the Minister agree that it is bad enough for the Government to fail to meet their commitments, for example, with regard to the shortfall in pensions, but they are now proposing a fortnightly or monthly payment? Is the hon. Lady aware that there are 26,000 post offices throughout the country? Is she further aware that a principle of child benefit is that it should be paid to the mother, and that the proposal will run counter to that?

Mrs. Chalker

I am well aware of how many post offices there are. I am also well aware of the false comments that have been made in recent weeks. It is important that, as of right, the mother should receive child benefit. I assure the right hon. Gentleman that I am taking all these matters fully into account.

Mr. Tapsell

May I reiterate to my hon. Friend the point already made from these Benches—that sub-post offices are of great importance in rural areas? They alone perhaps keep the village shop economically viable. At a time when so many facilities are being withdrawn—

Mr. Speaker

Order. The hon. Gentleman is not putting a question. He is asserting a point of view. Perhaps he will now put a question.

Mr. Tapsell

Will my hon. Friend bear that very much in mind?

Mrs. Chalker

I am grateful to my hon. Friend. We are well aware of the importance of the sub-post office in suburban communities and particularly in rural communities, where it is often the only shop. I am considering the whole matter in conjunction with Ministers from other Departments.

Mr. Stallard

How much do the Government hope to save by the change in procedure?

Mrs. Chalker

We cannot yet forecast definite savings. It has been estimated that savings in administrative costs could rise to £50 million a year, but simplification should lower that saving to perhaps £35 million. Administrative charges are constantly increasing and money available should be spent on benefits, not administration.