HC Deb 14 June 1999 vol 333 cc33-4W
Mr. Field

To ask the Secretary of State for Social Security what forms of technology he is evaluating as a replacement to the magnetic strip of the benefit payment card; and what the projected savings are. [85862]

Angela Eagle

We will begin replacing the existing paper-based methods of payment with a more modern, efficient and secure method of paying benefits using the existing automated credit transfer system in 2003. In addition to an increase, compared with the benefit payment card, of potential savings from the elimination of fraud associated with paper instruments of payment, this move is expected to provide a significant increase in administration savings.

It is the Post Office's intention to automate its network by the end of 2001 and to enter into commercial arrangements with a number of high street banks so that those people who wish to receive their benefits at post offices should continue to be able do so.

Mr. Rendel

To ask the Secretary of State for Social Security (1) what savings were achieved due to the operation of the benefit swipecard in the 250 post offices where it was operating prior to renegotiation of the BA-Pocl Horizon contract; [86926]

(2) what plans he has to continue operation of the benefit swipecard in the post offices where the system is currently operational. [86927]

Angela Eagle

In the 204 post offices automated as part of the system trial savings from the payment card to April 1999 amounted to £97,000. Over the same period and in the same post offices the Order Book Control Service, which uses bar coded order books to tackle benefit fraud, achieved savings of £1.7 million.

We have decided that the project to automate post offices and benefits payments will no longer include the introduction of the benefit payment card. The vast majority of benefit customers will be unaffected, and those currently using the benefit payment card as part of the system trial, around 30,000 people, will see no interruption of their payments. The cards presently in use will be discontinued and we will be contacting customers to help them change to one of the alternative methods of payment.

Mr. Rendel

To ask the Secretary of State for Social Security (1) what percentage of benefit payments are currently made through Automated Credited Transfer into bank accounts; [86924]

  1. (2) what income was generated for post offices as a result of benefit payment transactions in the last year for which figures are available; [86925]
  2. (2) what proportion of benefit claimants do not have a bank account. [86928]

Angela Eagle

As at May 1999, 16 per cent. of benefit payments were made through Automated Credit Transfer into bank accounts.

The transaction fees payable by this Department to the various agents who supply benefit payment services are commercial in confidence and cannot be disclosed.

Estimates of the number of benefit claimants who do not have a bank account vary widely. The various sources of information available suggest the figure to be in the region of 10–20 per cent.