Benefit Payment Security Cards

HC Deb 11 February 1997 vol 290 cc175-6W

Mrs. Clwyd

To ask the Secretary of State for Social Security (1) what representations he received from(a) Post Office Counters and (b) trades unions representing Post Office and Benefits Agency staff concerning the introduction of the benefit payment security cards; and if he will place copies of such representations in the Library; [14795]

(2) for what reasons he introduced the payment security card for certain categories of benefit claimants; in what parts of the United Kingdom the cards were issued; what was the cost of introducing the cards; what assessment he has made of the extent to which the cards assisted in reducing benefit fraud; for what reasons payment security cards are no longer acceptable as valid proof of identity when cashing benefit cheques; and if he will make a statement. (14794]

Mr. Forth

I have been asked to reply.

Responsibility for the subject of the questions has been delegated to the Employment Service agency under its chief executive. I have asked him to arrange for a reply to be given.

Letter from Leigh Lewis to Mrs. Ann Clwyd, dated 11 February 1997: The Secretary of State has asked me to reply to your questions about the Payment Security Card. In response to Question 14794, the Payment Security Card was introduced by the Employment Service for unemployed clients who lived in areas which experienced significant girocheque losses. It was introduced as a security precaution to reduce the amount of girocheque fraud and the number of girocheques reported as not received. The card was originally piloted in the West Midlands region in September 1993 and a decision was made to extend its use in July 1995. The cards were issued in 272 Jobcentres located throughout the country. Please see Annex I for a list of those Jobcentres. The cost of introducing the card was £225,000 including the manufacture and distribution of the cards to Jobcentres and associated publicity material for Jobcentres and Post Offices. The card was initially successful. An evaluation showed that the number of girocheques reported as not received fell by around 45% and the extent of girocheque fraud fell by 70%. However, the effects of the card diminished over time and some clients experienced difficulties when they lost their cards. The card was in any event intended as a short term measure prior to the planned introduction of the Benefits Agency's Payment Card. Responsibility for benefit payments to unemployed people transferred to the Benefits Agency in October 1996 with the introduction of Jobseeker's Allowance. For a number of operational and technical reasons, the Payment Security Card could not be included in the Jobseeker's Allowance process. The Benefits Agency's new Payment Card is currently being rolled out to benefit recipients and will eventually include clients receiving Jobseeker's Allowance. This will become the secure means of payment which replaces girocheques altogether. Therefore, no new clients have been issued with a Payment Security Card since the introduction of Jobseeker's Allowance in October 1996. Clients who still held a Payment Security Card were notified in writing during January 1997 that the card would not be accepted by the Post Office from 3 February 1997. The notification also gave details of the other types of identity which are acceptable to the Post Office when cashing girocheques. Posters have also been displayed in Jobcentres and Post Offices. In response to Question 14795 representations were received from Trade Unions representing Employment Service staff in November 1993. They asked for details of the terms of reference and timings of the pilot of the Payment Security Card in the West Midlands region. The Trade Union Side were kept informed when it was decided to extend the use of the card in July 1995. The introduction of the Payment Security Card was negotiated with Post Office Counters Ltd. via the Employment Service's contractual partner, Girobank plc. There were no representations to Employment Service from Trade Unions representing Post Office staff. I have made arrangements for copies of the representations made by the Trade Unions representing Employment Service staff to be made available in the House of Commons library I hope this is helpful.