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Mr. Sutcliffe: Governments of all persuasions do not respond to leaked documents, but I will refer to the general issues raised—if I have time left in the seven minutes now available to me.

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I want to show my hon. Friend, the Chairman of the Select Committee, the appropriate courtesy by pointing out that we value the Committee's work, the evidence it has taken and the views that it has expressed. I recognise that Members have deeply held views about the problems in their constituencies. When I attended a recent debate in Westminster Hall on post office closures in Wales, I experienced at first hand some of the concerns about the consultation process—a point to which I shall perhaps return. I accept the individual constituency cases that hon. Members have described, but I do not accept the partisan political points that have been made. It is rather sad that that happened, given what the Government have tried to achieve with the Post Office. A viable post office network is important to all hon. Members.

The performance and innovation unit report of June 2000 on the post office network concluded that the business had not kept pace with change and was not exploiting its very highly trusted status as a provider of financial services. It was losing business. As the hon. Member for North Thanet (Mr. Gale) said, sub-postmasters are business people. They have found it increasingly difficult to make a living and have left the network in increasing numbers. Doing nothing was not an option; that would have led, simply, to the uncontrolled collapse of the network, and left deeply damaging gaps in it.

The problems date back more than 20 years. Under-investment has been a factor, but the real drivers have been greater mobility, changes in shopping habits and increased choice—including through new technology. People have simply decided not to use the Post Office. The business must face up to the challenge and make itself more relevant to modern customer needs, or it will not survive.

The Government accepted all 24 recommendations in the PIU report. The change has to be managed properly. As many as 3,500 post offices closed before 1997. Opposition Members champion the post offices' cause, but they should remember the lack of investment in that period. However, important matters must be taken into consideration as we move to direct payment.

In the past, Post Office income was heavily dependent on benefit payments, but that business has been dwindling. As the hon. Member for Gordon (Malcolm Bruce) said, direct payment is not new: it is something that increasing numbers of benefit recipients have been choosing.

Ahead of the Government's decision to switch to making all payments by direct payment, it should be noted that more than 43 per cent. of benefit recipients already received their cash paid directly into their bank accounts. In addition, 62 per cent. of all new child benefit recipients and 68 per cent. of all new pensioners already get their benefit money paid directly into their bank accounts.

The current order book system is outdated. It is inefficient, open to fraud and abuse and costly to administer. It needs to be modernised to keep in step with changing customer needs, and to reflect the fact that owning and using a bank account is now the norm. More than 87 per cent. of benefit recipients and around 90 per cent. of pensioners have access to a bank account.

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However, given that there has been some scaremongering, I want to make it clear that people can still get their pensions across the counter at the post office. The development of any future system will be based, as in the past, on work with the full range of representative groups. As Minister with responsibility for consumer affairs, I can tell the House that I am deeply involved in making sure that consumers are protected, and that I will make sure that I have that input. I hope that that will put an end to the scaremongering that has been noted, and which has been aimed especially at vulnerable elderly people.

The Government remain absolutely committed to ensuring that those who wish to can continue to collect their benefits at post offices, in full and free of charge. That will remain the case even after the move to direct payment. The launch of universal banking services on 1 April this year is delivering that promise. We have provided £480 million to automate every post office branch. That investment has enabled the establishment of the technical infrastructure to support electronic banking services. That not only provides the means for the Post Office to continue to make benefits and pensions payments in cash, but it also gives the Post Office the vital opportunity to widen its customer base by increasing its offering of banking products.

Under the new arrangements for benefits payments, customers have three account choices when deciding how they want to be paid. They can use a standard bank or building society account, some of which can be accessed at post offices; they can use a bank or building society basic account, many of which can be accessed at post offices; and, finally, they can opt for the Post Office card account.

Customers choose the account that they want. If post office access is important to them, I do not doubt that they will choose accordingly. We want people to use post offices because they want to, not because they are forced to do so.

There is some concern that the Government are steering people away from opening Post Office card accounts, or making it difficult for them to do so. Such concerns are misplaced.

The Department for Work and Pensions is running a national and comprehensive information campaign to give customers the facts that they need to choose which account option is most appropriate for them. The campaign, which is costing £25 million, has been produced in consultation with the Post Office, with the aim of ensuring an unbiased and balanced message.

The Government do not accept that the process for opening a Post Office card account is particularly onerous, and there is no evidence that it is putting off customers from applying for card accounts. The Post Office card account is proving popular with customers. More than 1.6 million people have chosen this account to have their benefits paid into. Take-up to date means that the eventual number of card accounts is now expected to exceed significantly the operating assumption of 3 million, but there remains no cap on numbers or eligibility criteria. It is clear that we will have to return to the subject, and I look forward to the many

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Adjournment debates that we will have. Consultation is vital and it has to be meaningful—

It being Six o'clock, Mr. Deputy Speaker proceeded to put forthwith the deferred Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates etc.) and Order [29 October 2002].


Department for Work and Pensions


Department of Trade and Industry





Mr. John Healey accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31st March 2004 and 2005 and to apply certain sums out of the Consolidated Fund to the service of the years ending with 31st March 2004 and 2005: And the same was read the First time; and ordered to be read a second time on Monday next, and to be printed [Bill 12].

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Mr. Deputy Speaker (Sir Michael Lord): With permission, I will put together the Questions on the three motions.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

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