Pensions: Payments via Post Offices (Hansard, 25 May 1993)

§ Lord Henley
My Lords, yes.

Lord Wallace of Coslany
My Lords, that is a very short and satisfactory Answer. However, is the Minister aware that it is a very serious issue? In fact, a great number of old—age pensioners rely on their national pension as their main source of income. To bring pressure upon them to collect it elsewhere would be very wrong. Is the Minister also aware that the Ministry sent to new pensioners a form which did not even mention the post office as the source of payment? Moreover, other forms stressed the alternative method of obtaining the pension at the expense of the post office.
Perhaps I may be assured that in future such forms will give a fair choice to the individual. I am not against a fair choice, but stressing one form of payment against the other is very wrong indeed and it gives many people the wrong impression.

§ Lord Henley
My Lords, for reasons that we have made quite clear, both in this House in a debate in March and in another place on various occasions, Her Majesty's Government are committed to extending the availability and the use of what is known as "automated credit transfer". That brings particular advantages to the taxpayer in providing a much cheaper and more secure form of payment. Nevertheless, we have made it quite clear that we will offer choice to all individual pensioners. On the new forms that we send out to new pensioners, we shall make it quite clear that they can make use of the post office.
The forms to which the noble Lord referred were merely a series of tests which we were undertaking to see whether we could, by altering the forms, encourage greater use of ACT. However, I must make it quite clear that however great the take up of ACT was, there would always be a number of people who did not have bank accounts and who would not be able to make use of that particular option. Therefore, it is in the interests of the Department of Social Security to maintain a network of post offices, so that we can continue to pay our benefits to all those who do not have suitable bank accounts. Further, I should add that it was a commitment in our manifesto—unlike any of the other parties— to maintain a full network of sub—post offices to pay benefits to all those who need to receive their benefits by that means.

§ Lord Boyd-Carpenter
My Lords, can my noble friend confirm that the pensioner who wants quick and speedy payments of his pension will go, sensibly, to the post office?

§ Lord Henley
My Lords, the pensioner who wants quick and speedy payment of his pension will go to the 172 post office or the bank, whichever he finds to be the most convenient. What I am trying to make clear is that we are offering a choice and that we shall continue to offer a choice to all those who wish to choose the post office or payment at their bank or building society.

§ Lord Tordoff
My Lords, on the assumption that people will take up the ACT option, what is the Government's calculation of the number of rural post offices that will close as a result?

§ Lord Henley
My Lords, I do not think that the noble Lord listened to my earlier answer. I was trying to make absolutely clear the fact that it is in the interests of the Department of the Social Security to maintain the rural post office network—and, for that matter, the urban post office network—that we have because there will always be a number of people without bank accounts to whom we would have no other means of paying that benefit other than through the post office network.

§ Lord Mason of Barnsley
My Lords, is not the Minister aware that the threat to the pensioner of losing his local post office is still very real? Does he accept that there is a drive to force the pensioner to take his benefits through banks and building societies? Pensioners want to be assured that that is not the case. Is the Minister further aware that 541 Crown post offices have closed in the past five years and that 288 sub-post offices closed in 1991 to 1992? In the light of those figures, how can the Minister categorically assure pensioners that they will continue to receive their pension from their post office?

§ Lord Henley
My Lords, I have given an assurance that there will continue to be choice for all pensioners to receive payment of their pensions through the post office or through bank accounts, should they so wish. Obviously no one can guarantee that no post office will ever close. Sub—post masters reach the age of retirement, retire and new ones come in. But what I have been trying to make quite clear is that whatever happens, there will always be a number of people who do not have suitable bank accounts and who have to receive their pension through the post office. It is therefore in our interest to maintain that network. The DSS is currently negotiating with Post Office Counters Ltd. to renew the contract which comes up for renewal every two or three years. It might just be not exactly coincidental that this worry has been built up because that contract is to be renewed. It might just be in the interest of Post Office Counters Ltd. to emphasise those particular problems. What I am trying to do is give an assurance that we need that network as much as individual pensioners.

§ Baroness Jeger
My Lords, is the Minister aware that the main disincentive to many pensioners in doing as the Government wish is that the pension is paid monthly in arrears through banks and building societies? This is a serious matter for many people. I should have thought the Government would realise what life is like managing on an old-age pension as distinct from budgeting on a salary. Will the Minister 173 make it absolutely clear in any publicity that is issued that automated credit transfer will be a drawback for many pensioners?

§ Lord Henley
My Lords, I do not accept that it is a drawback for all pensioners. Some are quite used to receiving their money monthly, just as they have throughout their working life. But certainly we would be prepared to consider changing the periodicity of payments if we felt that that would encourage a greater take—up of automated credit transfer.

§ Baroness Hollis of Heigham
My Lords, how can the Minister maintain, in the words he just used, that the Government are committed to keeping a full network of post offices? Is it not the case that only 1,626 of the 19,000 sub—post offices in this country receive a fixed payment irrespective of benefit transactions? Moreover, is it not also the case that for the rest, benefit transactions provide nearly half their income? Is it not therefore inevitable that if one moves a swathe of that work to banks and building societies, those post offices must close? Will the Minister tell us how those post offices are to remain open when they lose the very business on which their survival depends?

§ Lord Henley
My Lords, the figures of the noble Baroness are wrong. Some 2,700 sub—post offices receive a fixed fee. What I am trying to make clear is that it will be up to Post Office Counters Ltd. to arrange suitable reimbursement of sub—post masters to make sure that enough post offices continue to flourish to pay pensioners by this means.

Noble Lords
My Lords —

§ The Lord Privy Seal (Lord Wakeham)
My Lords, I believe we should move on.