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21 Oct 2002 : Column 13continued
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. 
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?
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 suggestionsome have been madethat 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. 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.
11. Mr. Mark Lazarowicz (Edinburgh, North and Leith): If he will extend the categories of those people with disabilities who may undertake supported permitted work. 
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): The new permitted work rules give everyone claiming benefit because of a health condition or disability the opportunity to try out work
We responded to concerns raised during the consultation on the change by widening the rules to maintain the position of people with special needs who are supported in work by professional health or care workers. We will evaluate the permitted work rules over the next 18 months to see whether further improvements are required.
Mr. Lazarowicz : I thank my hon. Friend for her answer and her indication that she will evaluate the way the rules work. In that evaluation, will she consider the cases of claimants who, under the old rules, could have undertaken paid therapeutic work while receiving incapacity benefit, but are unable to do so under the new rules, because they do not fall within the new definition of supported permitted work? That is because the work that they do does not easily fall into the categories of support that are normally given by local authorities. The same applies to voluntary organisations. She is aware of a case in my constituency, on which I have corresponded with her and her colleagues. Will she re-examine it, and also consider in the evaluation the detail of the wider issues raised by my constituent's case?
Maria Eagle: I am aware of the case to which my hon. Friend refers, and I have a great deal of sympathy for his constituent and the position in which she finds herself. I hope that he will come to see me about the case, so that I can see what we can do to help his constituent. I am also happy to tell him that I will consider the issue that he raises to see how widespread it is in the new scheme and what, if anything, ought to be done about it in the evaluation.
12. Mr. Gareth Thomas (Harrow, West): What his targets are for the reduction of benefit fraud. 
The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): We have announced firm targets for reducing fraud and error in income support and jobseeker's allowance for working-age customers. We are aiming for a 33 per cent. reduction by 2004 and a 50 per cent. reduction by 2006. We have also announced a new target aiming for a 25 per cent. reduction in fraud and error in housing benefit by 2006. Latest figures show that we have already achieved a 24 per cent. reduction in fraud and error in income support and jobseeker's allowance for all customersmore than double our target of 10 per cent. To spell that out, it means a saving of some #240 million.
Mr. Thomas: Perhaps as part of the plan to meet that new target, and given that many instances of benefit fraud involve the fraudster using an identity other than their own, what further measures will my hon. Friend's officials be developing, perhaps in partnership with
Malcolm Wicks: Identity fraud is a very sophisticated form of fraud. A special unit in the Department for Work and Pensions looks at that particular area. We work with partners both within and outside Government on that issue. It calls for a very sophisticated response from Government. I think that we have that response.
Mr. John Redwood (Wokingham): Is the Minister aware that one of the main reasons for so many errors and so much fraud is the incredible complexity of the system? Would it not be helpful if the Minister tried to simplify it so that my constituents who really needed the support knew they could get it and knew how to get it, but those who were trying to work the system found it more difficult because it was much more transparent? Would he not then be able to set a proper target of getting rid of fraud almost completely, instead of living with the unacceptable, high levels that he is forecasting well into the future?
Malcolm Wicks: What we are also forecasting is a determination to reduce fraud. I am sure that the right hon. Gentleman welcomes the fact that this GovernmentI cannot speak for other Governmentsare succeeding in reducing fraud. All of us want more simplicity. There is a balance to be struck: how to simplify the system when meeting the specific needs of specific members of the community. These are difficult issues, but only last week my right hon. Friend the Secretary of State announced pilots/pathfinders on housing benefit, which will produce much greater simplicity in that complex area of social security policy.
David Taylor (North-West Leicestershire): No one in the House would condone and all would condemn any form of benefit fraud, but where there are tighter targets how will changes be introduced with sense and sensitivity? Surveys have often shown that savings from the failure to take up benefits have been greater than the cost of the fraud associated with them. Is there not a risk of throwing the baby out with the bath water if the targets are too tight and the framework too inflexible?
Malcolm Wicks: We have to be tough minded about rooting out fraud. To put this in context, the #240 million that we have saved by tackling fraud on two benefits, income support and jobseeker's allowance, means that the Exchequer has more money available for police forces, for schools and for hospitals. They are the people's priorities. I often find in my constituency that the people who are most angry about fraud in their communities are hard-working families, often on low incomes, who want taxpayers' money to be spent properly.