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Malcolm Wicks: We are not forcing anyone. The whole point—

Mr. Peter Luff (Mid-Worcestershire): Yes, you are.

Malcolm Wicks: The whole point is about giving people choice. If we did not make this change, the post office network would be bled dry by people increasingly choosing to have their benefit or pension paid into a bank or building society. It is only by offering choice that we offer some safeguard to the future of the post office network. This is not rocket science.

Kate Hoey: I appreciate parts of what my hon. Friend is saying, but will he give me a clear statement—yes or no—on whether we will still allow payment by benefit book to that smallish number of people who, for particular reasons, want to continue with that system of payment? I thought that we wanted to give people a real choice.

Malcolm Wicks: The pension books, order books and giros that we have now will be phased out by 2005. That is why we need to offer other choices, including—where necessary—an exceptions service. I cannot give my hon. Friend the reassurance she seeks, because that is the logic of the scheme.

Mrs. Angela Browning (Tiverton and Honiton): It is important to repeat, for the record, something that my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) did as Secretary of State. As the Conservatives left office, we considered the question of choice, but we also considered the social impact on an elderly population. The old system does cost more money, but we thought that it was worth it for those people who—as the hon. Member for Vauxhall (Kate Hoey) suggested—need to have the security of collecting the money personally through their books. We decided to continue that system until those people were deceased or moved away. There is an important social case to be made for that, but the Minister does not seem to value it.

Malcolm Wicks: We do agree on the absolute right, and need, for many current pensioners and other benefit customers to be able to go to the post office and access their money in cash, if that is their choice. We are finding ways to enable that to happen.

Most people—although perhaps not all—recognise that order books, which came in with ration books, have had their day. The world has changed enormously since then. Most people now have bank accounts, into which their wages are paid. People are also used to using plastic cards and cash machines. If anyone were designing a new payment system today, the last thing they would suggest would be order books. Indeed, a former Secretary of State has said that

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That was the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who was drawing on his experience.

We announced on 24 May 1999 that we were cancelling the benefit payment card. That project was initiated by the previous Administration and the House may recall that the project suffered from considerable delays and setbacks and that we were left with no option but to cancel it. Had it been successful, order books would already have been abolished and replaced by an electronic card-based system accessible at post offices.

We have put in place a new system that still allows people to access their cash at the post office and that provides the Post Office with new business opportunities. That is a major part of the strategy. What is more, we have done it on time. The Post Office and all those involved should be congratulated on having universal banking up and running on 1 April 2003.

I turn now to direct payments. Customers will have more choice about where they collect their money from, which will include the post office, if that is what they wish. In the spirit of consensus, I must say that there appears to be some genuine misunderstanding among Opposition Members about this matter. At the post office, customers will be able to use a current account, if their bank has a network banking arrangement with the Post Office, or a basic bank account, or a Post Office card account.

Customers will be contacted on the matter over the next two years, and that process is starting already. They do not need to do anything until they hear from the Government. In radio interviews, I have used the phrase "Don't panic!" to make that clear and, if that amuses Opposition Members on a hot afternoon, I am pleased that it does so. In fact, the real Dad's Army was a valued institution at a time of some difficulty and change for this country. I am therefore not too worried about that.

Mr. Patrick McLoughlin (West Derbyshire): The Minister has tried to do what Ministers always do when they want to defend the indefensible—he has said that he does not want to make a political point out of the matter, and that he is seeking consensus across the House. However, if he genuinely wants that consensus, will he say what the Government's objection to the Opposition motion is? It states that

of sub-post offices. What is the Government's objection to that?

Malcolm Wicks: I agree with much of the Opposition motion, but we are concerned with setting up a Post Office card account, and I shall come to that.

Mrs. Anne Campbell (Cambridge): One of the causes of social and financial exclusion is the fact that many people in this country do not have their own bank accounts. Does my hon. Friend agree that the Government's proposals are an important contribution to encouraging people to take up that facility and use it for their own benefit?

Malcolm Wicks: I agree absolutely. Many people have highlighted the problems associated with financial

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exclusion, not least in terms of our quest to get more jobless people into work. That quest is a feature of what the Government are about.

We are writing to our customers and setting out the options. Most importantly, only the way in which benefits and pensions are paid will be affected. Customers will still get their money as regularly as they do now, and it is important to note that that will include weekly payments for pensioners.

The Government's plans, and their funding for the post office network, have taken account of the move to direct payment. In order for the network to have a bright future, post offices need to become providers of high-quality banking services that people want to use. The Government have provided funding to enable them to do that, and to support the network.

I shall outline the Government's reasons for making the move. They include many of the factors that caused a previous Government to be interested in doing the same.

Direct payment has several advantages.

Bob Spink: Will the Minister give way?

Malcolm Wicks: I am a generous person—possibly too generous, as the House will tire of me if my speech lasts too long.

Hon. Members: No!

Bob Spink: The Minister is indeed generous. He said that he would set out how the Post Office card accounts work, so how will he answer my constituent in Benfleet? She wrote to me this week to state:

I received that letter on 6 June.

Malcolm Wicks: I appreciate the hon. Gentleman telling the House of that experience. I shall deal with some of the numbers involved in a moment, which should in part answer that point.

What are the advantages of direct payment? As my hon. Friend the Member for Cambridge (Mrs. Campbell) noted, one such advantage is financial inclusion. Most of us take for granted the advantages of having a bank account, and 87 per cent. of benefit customers already have access to a suitable account. The figure for pensioners is slightly higher, at 90 per cent. Like all hon. Members, I am concerned about the important minorities, but we should not typecast all elderly people as people who are not in the financial mainstream, as nine out of 10 already have accounts with banks or building societies. However, that leaves about 3.5 million adults in the United Kingdom without access to a bank account and unable to take advantages such as savings to utility bills that come through making payments by direct debit. Some of those people are unemployed and will need a bank account when they get work. That is important to what we are doing at Jobcentre Plus to ready people for jobs.

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Direct payment will help to spread financial inclusion by increasing the number of people who have bank accounts, giving them opportunities to benefit. The banks have introduced straightforward basic bank accounts over the past few years that are ideal for people who have never used an account before. Many can now be used at post office branches.

Mr. Andrew Robathan (Blaby): I notice that the Minister has not so far mentioned choice. Will he reply to the National Consumer Council, a statutory body, which commented on universal banking in its document, "Everyday Essentials":

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