HC Deb 21 October 2002 vol 391 cc13-5
10. Mr. David Heath (Somerton and Frome)

If he will make a statement on progress towards payment of pensions and benefits through the universal bank and post office card accounts. [73069]

The Secretary of State for Work and Pensions (Mr. Andrew Smith)

The Post Office assures us that it is on schedule for the start of universal banking services in April next year, including the post office card account. I can also tell the hon. Gentleman that the banks have now signed detailed contracts with the Post Office to make their basic accounts available at Post Office branches.

Mr. Heath

The right hon. Gentleman will know that the universal banking proposals have been widely welcomed, but there is still much doubt and concern about whether the post office card account will be up and running in time. Why have his and other Departments done nothing to persuade or even advise people of the existence of the post office card account? Why do the application forms for the new child tax credit ask for people's bank account details, and explain to them how to get a bank account, but do not tell them that they can still receive their benefit in cash at post offices through the post office card account?

Mr. Smith

We have consulted widely on all the materials and on all the letters that we are sending on this matter. I would rebut any suggestion—some have been made—that we are trying to put barriers in the way of people accessing post office card accounts. We certainly are not. In our communications strategy, we are writing to different categories of benefit and pension recipients. The Veterans Agency started writing to its clients earlier this month, and our Department will write to pensioners and to recipients of child benefit, income support, jobseeker's allowance and disability benefit over a two-year period, because the introduction will be phased. The first invitation letters asking for account details will be sent to child benefit recipients from next week. We shall also mount a major advertising campaign at the beginning of the new year to ensure that people are fully informed of their rights in this matter.

Mr. Ivan Henderson (Harwich)

Many pensioners welcome the fact that they will still be able to get their pensions in cash at post office counters. However, I am concerned that the high-tech nature of the new system that will come into operation next April will pose extreme difficulties for some pensioners. It will be stressful for some pensioners to collect their pension. I have seen the demonstration in the post office in Central Lobby, which involves small machines with PIN pads for pensioners to use to get their cash. Will the Minister consider providing a more user-friendly system for pensioners? Will he consult pensioner organisations before the new system comes about next April?

Mr. Smith

There have been extensive consultations with organisations representing pensioners and post office users more generally, and they are continuing. I would not describe the new system as a high-tech solution to the challenge. Yes, people will have to remember a PIN number, but they will be able to change the number to one that is easier for them to remember. We appreciate that some people will not be able to use a PIN number, and alternative arrangements will be put in place for them.

Annabelle Ewing (Perth)

Are the UK Government prepared to make grants available to sub-postmasters to ensure that people with disabilities have ready access to post office card accounts, and that the equipment is user friendly for our pensioners?

Mr. Smith

We have already committed huge sums of money to the changeover—£500 million has gone into the Horizon provision in post offices, the DTI will shortly announce further resources to assist rural post offices, and £270 million of investment is committed to carrying into effect the recommendations of the performance and innovation unit report to safeguard the future of the post office network. I can tell the hon. Lady and my hon. Friend the Member for Harwich (Mr. Henderson) that, as this system is developed, if sensible improvements can be made in the light of experience, I should be pleased to consider them.

Mr. Peter Pike (Burnley)

Does my right hon. Friend accept that, despite all his Department's efforts to make the system seem simple and user-friendly, many elderly people are worried about it? Is it not important that, as well as providing the literature from his Department, we ensure that the national media put the change forward positively, so that people get the message on how simple it is? The media sometimes carry an even greater impact than official notices from his Department.

Mr. Smith

Tempting though it is to imagine that I could take responsibility for how such things are portrayed in the media, I cannot do so. We shall make efforts not only through letters to clients, but through advertising, leafleting and other ways of communicating the message that the system is straightforward and simple. However, I also stress that where people have difficulties, of course special arrangements have to be made for them.

Mr. Julian Brazier (Canterbury)

The Secretary of State sounds confident at a time when two fifths of households receiving disability benefits have no bank account, a third of those receiving jobseeker's allowance have no bank account and, as he confirmed in reply to my hon. Friend the Member for Havant (Mr. Willetts) on 19 July, there are 250,000 more benefit recipients without bank accounts than at the time of the previous survey.

Will the Secretary of State assure the House, first, that the proposal will not be driven through before the necessary systems are in place and the households have the appropriate accounts, and secondly, that no more post offices will close because of the loss of business caused by the introduction of the system?

Mr. Smith

I would have hoped that the hon. Gentleman and his party accepted that, through the great investment that we are making in the Post Office, including its modernisation and getting in proper IT, and by extending financial services through basic bank accounts as well as post office card accounts to people who do not have them, we will be tackling financial exclusion and opening up new and positive opportunities for post offices the better to serve not simply their traditional client group, important though that is, but also to win new business. This is a process of modernisation, which is the only way forward to safeguard the post office network in the way everyone in the House wants.