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Mr. Willetts: The Secretary of State calls those claims absurd, but all Opposition Members know how true they are. Is she saying that the National Association of Citizens Advice Bureaux is absurd when it reports that

That is what NACAB is saying, and that is what we all know to be the case. Why does the Secretary of State continue to deny what everybody knows to be true?

Ms Hewitt: I am going by what customers have told Postwatch and, more importantly, by the fact that about 2 million people have opened a Post Office card account. The eventual number of card accounts is expected to exceed the original operating assumption of 3 million; none of that is evidence that people are finding it hard to open an account.

The hon. Member for Havant also raised a number of important issues involving people with disabilities. The first to be raised, quite properly, was the problems that people who are blind or have difficulty in seeing have in using personal identification number pads. That issue has been recognised by the Post Office, which has already improved the PIN pad by putting a key guard over it to make it easier to use, and adding a dot to the No. 5 key. The Post Office is working with the Royal National Institute of the Blind to make further changes to the PIN pad to make it easier for that group of customers to use the system.

Mr. McLoughlin: Why was it necessary to make those changes? Why were those things not thought of in the first place?

Ms Hewitt: I agree that it would have been better if the original PIN pad had been designed with full regard to the needs of people with different disabilities. The technology is still developing, and was not available at the right price and at the right time when the service was introduced. It is being introduced now, and I pay tribute to the RNIB, which not only raised the issue, but has helped the Post Office to resolve those problems in a practical way, as we readily acknowledge.

The hon. Member for Havant also asked about people who are housebound. I think that he accepts that there is no problem for those with a regular carer who use a Post Office card account, because they will have their own PIN number. However, housebound people may have different people caring for them in different

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weeks. Of course that is a problem: under the existing system, the claimants can simply sign an order book counterfoil, which provides great flexibility, but I am afraid that that practice is wide open to fraud and abuse. We are saying that where claimants need people to collect their money for them, they will, for the time being, simply continue to use their order book while we work with the various organisations to design the exceptions service.

The exceptions service will be based on a cheque system, which will be much more secure than the order book system. It will be introduced and available from October this year, in plenty of time for the ending of the order book system in May next year. I am delighted to say that, exactly as we would expect, my right hon. and hon. Friends at the Department for Work and Pensions and their officials have been working extremely closely with Citizens Advice, Help the Aged and many other groups representing vulnerable customers to ensure that there is full understanding of the needs of different vulnerable groups that cannot have their benefits paid directly into an account. That new system of payment by cheque will all be in place to ensure that there is no trouble in getting benefits for those vulnerable claimants.

Mr. Drew: Does my right hon. Friend agree that it would be useful to give Members a full briefing, given that people are likely to question us on how the system will work? Before the system goes live, will she arrange for us to see how it will operate?

Ms Hewitt: That is an excellent suggestion, and my right hon. Friend the Secretary of State for Work and Pensions and I will ensure that such a briefing is provided.

The successful introduction of the Post Office card account is only part of a much bigger—[Laughter.] They are very slow over there this afternoon. [Interruption.] The card is extremely successful—about 2 million people have already opened a Post Office card account, because they have decided that that is what they want. However, that account, which many Opposition Members said would never see the light of day—let me remind them of that—is part of a much bigger programme of universal banking. Thanks to the £500 million investment in the Horizon platform, the Post Office can become the high street bank for millions of other bank customers.

The Post Office is providing banking services on behalf of the Alliance & Leicester, Barclays, the Co-operative bank, First Direct in Scotland, Lloyds TSB and two internet banks—Smile and Cahoot. Customers of all those banks, with their ordinary bank accounts such as cheque accounts so on, can get cash at post offices free of charge.

Mr. Alan Reid : The Secretary of State knows that she has not mentioned any of the three main Scottish banks, which means that pensioners and benefit recipients in Scotland do not have the same choice as those in other

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parts of the country. What progress is she making in negotiations with the three main Scottish banks to reach agreement with them?

Ms Hewitt: I am happy to say that the Scottish clearing banks and other major financial institutions, as well as those I mentioned, already provide access at post offices. Those services—for instance, access to a basic bank account—were launched on schedule on 1 April last year. Access to the other current accounts—the cheque accounts—is a matter for commercial negotiations between the Post Office and the various banks.

My point is that because of our investment in it, the Post Office can offer that service to all the commercial banks, and therefore to all their customers. It is involved in those negotiations at the moment. I have repeatedly urged all banks to provide all their customers with access to their various accounts through the post offices, but obviously that is a commercial decision for the individual banks.

The result of that programme of investment and universal banking is that there are 20 million current account customers—not Post Office card account customers, but current account customers—who can use the new electronic systems and undertake banking transactions at Post Office branches. The result of that is that since April last year there have been nearly 25 million banking transactions at post offices. That is a huge success story, which the hon. Member for Havant completely ignored. That is why Citizens Advice welcomed this expansion of banking at post offices. It is a significant step forward in financial inclusion. Above all, from the point of view of this debate, it brings more people into post offices and gives sub-postmasters a new source of revenue.

Mr. Paterson: How much income has the Post Office lost through the changes in the card payment system and how much income will be replaced by the new banking arrangements on which the Secretary of State and her colleagues—as was repeated to me when I saw the Minister for Energy, E-Commerce and Postal Services—are hanging so much?

Ms Hewitt: Sub-postmasters have seen a reduction in their income from benefit payments over the last 10 years and more, for the reasons that I set out earlier, as customers have moved away from that. The choice to which the hon. Gentleman is not willing to face up was to enable the process of customer choice and seize the opportunity to have a much more efficient and fraud-proof system of paying benefits, and to make post offices attractive to customers through expanding their range of products, such as financial services and so on. Alongside the decline in income from benefit claimants, we are seeing an increase, which will continue, in income from other sources, such as home insurance, travel insurance, travel exchange products and so on. All of those are hugely popular with sub-postmasters, and all provide the prospect of continuing increases in new sources of income.

Mr. Weir: The Secretary of State's vision of an integrated post office and banking system is impressive, but does she accept that there is a problem in many rural

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areas, because over the last two decades many banks have pulled out of rural areas and closed small branches? I cite the case of Friockheim in my constituency, where the last bank closed a few years ago. The post office has now closed, so there is neither a bank nor a post office to enable people to use any of those services.

Ms Hewitt: The hon. Gentleman makes an important point. It is perfectly true that many of our rural communities no longer have a retail outlet, bank or post office, because none was commercially viable. I shall refer in a moment to the investment that the Department has been making to prevent all avoidable closures of rural post offices and our work with the Department for Environment, Food and Rural Affairs to try to expand in new ways the availability of services for people in rural communities.

Mr. Paterson: Will the Secretary of State give way?

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