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Mr. Page: No sane organisation embarks on such a massive change without proper evaluation or surveys or pilot studies. What pilot studies and evaluations did the Government carry out before starting this exercise? For example, how many of those people will convert to Post Office card accounts? What percentage do the Government expect that figure to reach?

Malcolm Wicks: I have given percentages of what is happening—

Mr. Page: I know, but what are we going to get to?

Malcolm Wicks: They are the crucial percentages, yes, but I emphasise that they depend on what people choose to do. Of course we evaluated all aspects of this. There was research—the Post Office did its own work, and so on. We talked to all the obvious groups and they were very helpful. Our planning assumption has been that 3 million Post Office card accounts might be opened, and that under the terms of our contract with the Post Office between 2003 and 2010 that could be worth £1 billion to the Post Office. However, that is a planning assumption; it could be less, and it could well be more, depending on choice. I hope that the hon. Gentleman finds that helpful.

I move on to some of the issues about the more vulnerable groups that we are all concerned about. We have been sensitive to the needs of vulnerable customers. Third party access will continue to be available under

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direct payment. There are a number of tried and tested options for bank or building society accounts, including power of attorney arrangements, arranging a third party mandate, and having payments, where appropriate, paid into a joint account. People with a Post Office card account will be able to obtain a second card, with a separate PIN, to enable a nominated person to access their account. However, we have always recognised that there will be some people whom we cannot pay by direct payment. They could include those who cannot get any sort of account, although they are a tiny number, and some people who need casual agents—perhaps people with serious learning difficulties, or some who may be suffering from Alzheimer's or other forms of dementia. I hesitate when I talk about those with serious learning difficulties because I know many people with learning difficulties who are perfectly able to access their accounts, and none of us wants to stereotype in that way, but of course there will be some of whom we need to take special care because of the nature of their disability—I mentioned Alzheimer's as an example. We also need a way to make urgent payments, such as those through crisis loans.

Order books will continue to be available for people who cannot manage the new arrangements until conversion to direct payment is completed in 2005, which means that we have time to get things right. People will be able to keep their order books during that period and the exceptions service will be in place before order books are phased out.

We want to design the exceptions service to meet people's needs properly. We need a better understanding of the problems that some people will face. Rather than guessing the circumstances with which the service will be required to deal, we will closely monitor the way in which the new arrangements for direct payment operate in practice and work with customer representative groups to design a secure and efficient service that meets people's needs. We are in regular contact with those groups; indeed, I have held a meeting with them. However, the service will not be an alternative to direct payment or a fourth option. It will be available only to those who really need it.

Mr. Heald: What will the criteria be? The Minister gave the Select Committee on Trade and Industry an example of people who consider that they are unable to use the options. Could such a person use the exceptions service, and will medical evidence be required for that? Will he give us more detail on how decisions will be made? If he cannot do that, will he explain why, having introduced a new measure that is bound to cause concern, the Government did not design an exceptions service in the first place, especially if people will just be sent a cheque in the post, as he told the Select Committee?

Malcolm Wicks rose—

Mr. Deputy Speaker: Order. Before the Minister resumes his speech, I tell the House that I hope that there will be an opportunity for Back Benchers to participate in the debate.

Malcolm Wicks: I apologise for my excessive generosity.

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At the moment, we favour a cheque-based system to meet the needs of the exceptions service. It will have additional security features so that it will be less prone to fraud than the current giro system. My hon. Friend the Minister for E-Commerce and Competitiveness may deal with issues relating to PIN pads and the Post Office's current plans.

We are making sensible changes and offering customers a genuine choice. We are listening to customers and their representatives so that we provide a system that meets their individual needs. We are also listening to hon. Members of all parties. All customers who want to continue to receive their pension, benefit or tax credit through the Post Office may do so—just as we promised. They may continue to receive payments at the same frequency as they do now—just as we promised. That can be achieved with a range of account options: basic bank accounts, several current accounts and, of course, the Post Office card account. Anyone who wants a card account may have one, and more than 300,000 people have already chosen that option.

We are proposing a more modern, efficient and secure system. We are increasing customer choice while providing better value for money for the taxpayer, tackling fraud and increasing financial inclusion. Those are the facts, and I hope that the House will welcome this long overdue social reform.

5.58 pm

Dr. Vincent Cable (Twickenham): Opposition days usually present an opportunity for a bout of tribalism and sectarianism across the political divides. However, the motion is spot on and I have no problem with it whatsoever. It reflects faithfully the theme of many speeches that I have made about the Post Office and the spirit of the early-day motion that I signed along with many hon. Members of all parties, including the distinguished Chairman of the Select Committee on Trade and Industry, the hon. Member for Ochil (Mr. O'Neill). I would have hoped that almost all hon. Members would reach a consensus that the motion was agreeable, so I am surprised that it has created such division.

I shall bring the debate to a ground-level reality by mentioning an event from the Whitsun recess. People at my local Age Concern centre organised, among the bingo and tea dances, an advisory session on how local pensioners could deal with the changes. They brought along all the Post Office leaflets and the pensioners gathered round to ask practical and non-political questions about how the new system would affect them. The group was quite large. The nature of the centre meant that all those present were agile younger pensioners who were physically fit and mentally active. Every one of them had a bank account and wanted to continue to use the post office. That simple choice should not cause any great difficulty and the system should easily be able to accommodate those people.

The main question the pensioners asked was whether there would be a problem with them using their current accounts in the post office. The hon. Member for Stafford (Mr. Kidney) asked the same question. The answer was, "Yes, sort of. It depends which bank you

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are with." The problem, which was immediately identified, was that people can use their current accounts if they bank with Barclays, Lloyds TSB, the Alliance and Leicester or the Co-operative.

Just to complicate matters further, one of the brighter pensioners popped up from the back and waved one of the Post Office's newspapers with the headline "Great News. Granddad gets his money for free at the Post Office". However, the article refers to only two banks, the Alliance and Leicester and Barclays. So we needed an explanation of how those differed from the other two banks. It appears that they are willing to offer automated cash access at the post office. The other two offer cheque cashing facilities. Those are different and it is confusing for pensioners. None the less, the basic principle is right. As the hon. Member for Stafford said, people who bank at those banks can get cash from the post office. That pledge is honoured in a general way and there is no problem for those people.

However, the majority of people in the meeting did not bank at those banks. Like 55 per cent. of the British banking population, they banked at the NatWest, the Royal Bank of Scotland, the Halifax Bank of Scotland, the Midland—now HSBC—and the Abbey National, which do not offer the same facility. So the pensioners asked, "How do we get cash from the post office?" The answer was, "Well, if you want to continue using your bank to get access to post office facilities, you have to open a basic bank account in addition to your current account." They had never heard of it and were told that it was a simple account, to which they replied, "We are not simple people. Why do we need a simple account?"

The people giving the advice explained that the account is different from other accounts and that its features are restricted. They went on to set out some of those restrictions. The Department for Work and Pensions also sets them out in its document. It is not, for example, possible to run an overdraft, as has been mentioned. The Department states:

It does not say what the charges are and that information is not easy to access.

The audience then said, "If this is how the basic bank accounts operate, surely we'll need to find out from the post office that we go into what state our accounts are in so that we don't inadvertently become overdrawn." The Department helpfully says a little later on in its document:

It does not say which accounts or banks. That is left unclear. So 60 per cent. of the audience—55 per cent. of the general public—will not be able to access the service in the post office. They will have to go through a basic bank account if they want to continue to use its banking services.

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