§ 7. Mr. Harry Barnes (North-East Derbyshire)What arrangements will be made for the establishment of bank or building society accounts under the automatic credit transfer system for those who wish to continue to cash their benefits at post offices. [115869]
§ The Secretary of State for Social Security (Mr. Alistair Darling)We want banks and the Post Office to offer banking services to people currently without bank accounts. We have already begun discussions with the banking industry on issues surrounding benefit recipients, charges and others matters, and discussions with the industry will continue. We have also made it clear in the past—I do so again—that people will still be able to collect their cash at post offices, both before and after the move to paying benefits by ACT begins in 2003.
§ Mr. BarnesI realise that if pensioners take out accounts with certain building societies and banks, they will still be allowed to cash their benefits directly at post offices. The problem, however, is how they will be able to register. To establish accounts, will they have to search out a bank, turn up and take a great deal of paraphernalia with them to show who they are, or will there be provisions through the Post Office itself to make it automatic and easy for them to set up accounts? If it is 614 easy for them to set up accounts, they will continue to use the Post Office and it will remain the only organisation that they use.
§ Mr. DarlingMy hon. Friend may be aware that almost half the new pensioners receiving their pensions now choose to have their money paid directly into their bank accounts. I do not think that there is an overwhelming obstacle against that. However, regardless of whether people receive their money from a bank account or from a post office, some formalities have to be followed because we need to be sure that the money is paid to the right person. As I said, we are in discussions with the Post Office and the Post Office will, in turn, discuss with the banks the formalities that are necessary. We want to make it as easy for people to be able to receive their pensions and other benefits provided that that is consistent with ensuring that the system is secure. That benefits individuals as well as the system as a whole.
§ Mr. Steve Webb (Northavon)Will the Secretary of State confirm that since his Government came to office, the rate of post office closures has accelerated and that this year looks to be the worst ever? Will he confirm that the move to ACT will undermine post offices? What steps is he planning to take to enable those pensioners who want to exercise the choice of going to the post office to do so? They will be unable to do so if post offices are closing all around them.
§ Mr. DarlingThe hon. Gentleman has to accept that if we do nothing, as the Liberal Democrats advocate, more and more post offices will close because almost half the people coming into the system are opting to have their money paid into a bank or building society account. We are ensuring that the Post Office has the investment to set up banking facilities, which did not happen when the Conservatives were in power, to ensure that post offices can compete with banks and building societies.
The Liberals are being completely dishonest about their position and raising fears although they have no suggestions for securing the future of the Post Office. We are determined that the Post Office will have a future, so we are giving it the investment necessary to ensure that there is a network in years to come—something that the Liberal policy, whatever it happens to be from day to day and hour to hour, could never ensure.
§ Mr. Simon Thomas (Ceredigion)May I assure the Secretary of State that the concerns to which he refers are genuine concerns in a constituency such as mine? Will he consider another type of bank account, which could prove to be a valuable way to deliver not only ACT but the Government's social exclusion strategies? I refer to the credit union method—a third way, if he likes. Will he ensure that, in his discussions with the Post Office and the banks, credit unions are not closed out? If he has any doubts about the ability of the credit union movement to deliver a highly secure system, he can look to Ireland, where millions of pounds are held in credit unions. Will he consider that as an alternative way of building communities and delivering social security payments?
§ Mr. DarlingThe hon. Gentleman makes a good point, and credit unions are popular. They are not as well developed in this country as they are in others, but some are successful and well supported. He latches on to the important point that it must be in the whole country's interests to ensure that as many people as possible are included in the banking system, rather than having a section of society that is completely excluded from that system.
The object of our reforms is to take account of the fact that people are choosing to receive their benefits in different ways, and choice ought to be supported, but at the same time we want to ensure that the Post Office and other institutions have the means to receive those payments so that they can pay them out to members of the public. It is precisely because we are facing up to the problems that we inherited of years of under-investment, indifference and neglect that we can ensure that there will be a post office network in future.
§ Mr. Frank Roy (Motherwell and Wishaw)In my constituency, 80 per cent. of post offices depend on the Benefits Agency for over 50 per cent. of their business. Will my right hon. Friend confirm that when ACT is introduced those who receive their money through the bank will be able to go to a post office to collect their money? People who do not use a post office at present may therefore start to use it, which would help post offices.
§ Mr. DarlingThe object is to make sure that people have a choice as to where they receive their money. I repeat that it behaves all those who oppose the Government's proposal to come up with an alternative that will work. The Liberals and Conservatives are now saying, opportunistically, that they would do absolutely nothing, which would mean that more and more people would ask to have their money paid into their bank account, and more and more post offices would close. We are ensuring that people have a choice, because we believe that people should be allowed to choose where they receive their pension or their benefit, and at the same time we are giving the Post Office the additional investment that it needs to ensure that there will be a viable network in future.
§ Mr. Tim Boswell (Daventry)Pensioners account for a significant number of the 8 million disabled people in this country, and many of them suffer from mobility problems while others find administrative procedures increasingly perplexing. In the light of that, will the Secretary of State give the House an absolute and unequivocal assurance that those who want to receive their pension in cash at the post office will be able to do so? Furthermore, and in the spirit of that pledge, will he assure the House that there will be a network of post offices that are reasonably convenient for those people, where they will be able to draw that pension?
§ Mr. DarlingI remember that, during the previous Parliament, the Conservatives tried to sell off the entire postal network, which would not have enabled such guarantees to be given. My colleagues and I have made it clear that people will have a choice as to whether they receive their benefits and pensions at a post office or in a bank account. I should have thought that those who are disabled and unable to go out would quite like their money to be paid into a bank account, instead of their having to queue up at a post office to get it.