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Malcolm Wicks: As I make progress, my position on that will become clear. I am grateful to the hon. Gentleman for mentioning choice, to which I was about to turn. To be fair to myself—I like to do that sometimes—I should say that I have mentioned it already.
Some people think that customers should be persuaded to open a Post Office card account regardless of whether it is the best option for them. We believe in choice. At the end of the day, choice will be determined not by what any Minister or the Post Office or any other vested interest group says, but by what the customer says. Customers should choose the account that best meets their needs and circumstances. People using post offices in future will do so because they want to, not because they have to. In future, a pensioner may well access her money at the post office through the card account while, on either side of her in the queue, a doctor may be accessing money through his or her bank account and a young unemployed man is using a basic bank account. People will use different methods to get money, but will choose to do so at the post office if it suits them.
Mr. Luff: Why, then, is a pensioner in my constituency being forced—she has no choice—to open a bank account? She wanted to pay her Royal Mail pension—I stress Royal Mail—into the Post Office card account. Because the Government has limited the terms of the Post Office card account, she is not allowed to do so. At the age of 91, she is being obliged, forced and compelled to open a bank account for the first time in her life.
Malcolm Wicks: State benefits, including pensions, can be paid into a Post Office card account; private or occupational pensions cannot.
Malcolm Wicks: That is the nature of the product. It is not for me to advise the person in question, but another kind of account may be useful in her situation.
A second reason why we are moving towards payment modernisation and direct payments is the concern about fraud, which we all share. We lose about £80 million a year in giro and order book fraud. On average, more than 100 pensioners a week have their order books stolen. Cards can be stolen, and we
understand that there are such risks in our society, but let us bear it in mind that too many people are mugged and have their cash and pension books stolen. A spokesperson for the Association of Chief Police Officers said:
- "Anything that reduces the opportunities for crime is a benefit. In particular this move will hopefully protect the more vulnerable members of society and enable them to feel safer."
A second advantage is that there are administrative cost savings. I make no apology for that; it is right to cut unnecessary administrative expenditure. Each pension book foil costs 68p and every giro costs £1.47, while payment into a bank account costs only 1p. I am sure that the Opposition do not really want to spend more money on social security administration just for the sake of it.
Mr. Gibb: The hon. Gentleman refers to the administrative savings, but is he aware of the extra transport costs for pensioners in the Pagham area of my constituency? Pagham post office is going to be closed and they will have to make a two-mile round trip to collect their pensions. Can the Minister explain why the Post Office counter in Pagham is not being offered, as a matter of course, to other shops on the Pagham parade so that there will be a service for pensioners in the area?
Malcolm Wicks: I suspect that my hon. Friend the Minister for E-Commerce and Competitiveness may deal with such issues in the wind-up. The Government cannot guarantee that every post office will stay open. The hon. Gentleman is a fair man and will accept that we have seen many, many closures over several decades. Obviously, in such situations, we are all sensitive to how people, whether in his constituency or mine, can access money. We have to think through the details of the individual cases.
What is the process for opening a Post Office card account? In effect, customers have to take only three steps. First, after hearing from us, they ring the customer conversion centre to discuss their options. It is important that those options are spelled out. Secondly, they await a personal invitation document from our Department to take to the Post Office branch to collect a Post Office card account application form to complete. Thirdly, as with all accounts, they then send the required account details back to the Department of Work and Pensions.
Mr. Heald: Will the hon. Gentleman give way?
People have accused us of making the process of opening a card account difficult—I think that the hon. Gentleman might have done so—and have said that the customer conversion centre is trying to dissuade people from opening a card account.
Malcolm Wicks: That is simply not true.
Kate Hoey: Will my hon. Friend give way?
At the risk of bringing evidence to bear on the debate, independent research by Postwatch, the consumer watchdog, has shown that 88 per cent. of pensioners said that they felt that advice from the customer conversion centre
- "was given in a clear and unbiased manner".
Malcolm Wicks: Well, that is the Postwatch evidence.
Postwatch also found that 94 per cent. of those ringing the centre to open a card account felt that the information they were given was "clear and unbiased", and 91 per cent. of pensioners who rang the centre did not feel that staff were seeking to persuade them to choose one option over the others.
We are spending a good deal of money on communicating the direct payment message. It is right that we do so. When I told the Select Committee on Trade and Industry that I realised that there was still confusion, I was being honest. This is a major change and, understandably, many of our constituents have not yet fully understood the choices available to them.
We are spending £25 million over the next three years on advertising. Many hon. Members will have already seen the advertisements. All the material that we are sending customers mentions post office access and the Post Office card account. Government material is complemented by the Post Office's own leaflets and advertising. Postwatch research shows that 93 per cent. of pensioners described my Department's customer information material as "of good quality".
Mr. Gale: Why do our pensioner constituents have to jump through hoops, make phone calls and await a form when they could perfectly easily go to the post office, collect the form and fill it in, as they do for other services such as driving licences and passports?
Malcolm Wicks: Opening any bank account is more complicated than the hon. Gentleman suggests, and rightly so. We are concerned about fraud and impersonation—people pinching other people's identities. It is also important to note that the Post Office card account is only for customers of the Department of Work and Pensions—pensioners or benefit claimants. I said "only", but there are, of course, millions of them. Sending people the personal invitation document is verification from the Government that it is a bona fide application for the Post Office card account. In terms of security and fraud and identification, the document is a very important component. I hope that satisfies the hon. Gentleman.
Mr. Heald: Will the Minister give way?
Malcolm Wicks: Not just yet. I will of course give way in a moment, but I think that I have been relatively generous.
Malcolm Wicks: Thank you very much.
I shall now report on the progress that we are making, because colleagues are interested in what is happening. So far we have sent out 2.5 million letters inviting customers to convert to direct payments. We are doing that gradually, phased over two years. It is important that we do so, given the numbers involved. One and a half million customers have responded with bank details. There will of course be a lag, and people should not make too much of the fact that not everyone has yet replied. Some have only just heard.
More than 300,000 customers have requested a Post Office card account. However, the customers contacted so far are not representative of the whole benefit population, because we have gone for certain client groups early on, so simple arithmetic, such as division, of these statistics would not stand up to analysis. We need to take care in extrapolating from the figures. However, even though migration is still at a very early stage, a large number of customers are already requesting a Post Office card account. The latest figures that I have, for 30 May, show that the proportion of pensioners requesting a card account was around 50 per cent.—I say "around" because that figure will fluctuate. It is not a reflection of what it will eventually be, but it is around 50 per cent. Some 40 per cent. of Jobcentre Plus customers and 12 per cent. of child benefit customers have requested a card account.
Many of those opting for a current or basic bank account are also choosing to use them at post office branches. If, as some allege—I think unfairly—that is difficult, why is the Post Office card account proving a success, with many people opting for it? We shall provide regularly updated figures to the House by regularly placing a report in the Library.
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