Examination of Witnesses (Questions 800-819)
MR STEPHEN
TIMMS AND
MR JAMES
PARKER
10 FEBRUARY 2005
Q800 Mr Beard: It is not at the moment.
Mr Timms: I think this comes back
to the point that we have touched on a number of times that people
going into Post Offices do need to know that they can get their
money free over the counter and they may have to pay at an ATM.
I think it is worth just putting on the record once more that
the number of free ATMs in Post Offices is much, much higher now
than it was a few years ago, so things are moving in a helpful
direction rather than an unhelpful one.
Q801 Mr Beard: Several consumer groups
have pointed out to us that people on low incomes often take small
amounts out of ATMs, just enough to go shopping, so if they are
bearing a charge of £1.50 each time that charge is bearing
down very heavily on them and they have suggested, therefore,
there ought to be a cap on this. Either that or the charge should
be some fixed percentage of what is withdrawn. How would the Government
look on that sort of suggestion?
Mr Timms: Again, as long as people
are aware that they can get their money completely free of charge,
however small the amount they want is, over the counter at the
Post Office then I think that point is covered. Can I just correct
something I said a moment ago? It has been drawn to my intention
that, in fact, the DWP did carry out independent research of their
customers' experience of Direct Payment last year and that did
not reveal any evidence that people were having problems getting
money free of charge.
Q802 Chairman: So your response to the
Parliamentary Question was wrong?
Mr Timms: I would have to remind
myself what the precise wording of the answer was.
Q803 Chairman: I read it out to you:
"No such assessment has been made". That was your answer.
Mr Timms: Certainly no assessment
has been made by the Treasury, but I am being reminded that the
DWP did carry out some independent research.
Chairman: You have not been well served
there, I think.
Q804 Mr Beard: Going on from there, when
Ministers were announcing the deployment of nearly 3,000 cash
machines in Post Office branches at the time of the start of the
changeover of benefits, was it expected that a large proportion
of this 75% would be paying cash machines?
Mr Timms: I do not recall what
the expectation was at that time. I think the ability to get money
free at the Post Office over the counter has always been an absolutely
essential feature of the Direct Payment arrangements. Being able
to get it as well through an ATM, either a free one or a paying
ATM, is an extra. The key point is that you can get money free
over the counter.
Q805 Mr Beard: The Gershon review notes
that there will be further increases in Direct Payment of benefits
and it will mean that the Government save around £400 million
each year and this Direct Payment over the counter, therefore,
faces people in those circumstances with a choice. Either they
queue up, probably for quarter of an hour or 20 minutes, to get
the free cash over the counter or they have to go to an ATM and
pay £1.50. That looks as though the service is declining
for those people rather than, as Gershon was proposing, that the
savings should be efficiency savings and services left as they
were.
Mr Timms: I do not think it is
declining because they would have been queuing up for their benefit
payments, sadly, under the old arrangements when they had to take
their benefit book in.
Q806 Mr Beard: There will be more of
them now because Gershon sees a direct push towards more people
taking their benefits this way.
Mr Timms: No. Nothing that is
happening with Direct Payment will increase the number of people
going to the Post Office to collect their benefit. We have made
it absolutely central that people will continue, if they wish
to, to be able to obtain their benefit cash at the Post Office
and not pay, but they have other choices as well. If they have
a basic bank account they will be able to use an ATM in the Post
Office or at a bank or they will be able to use cash back. They
will have a number of choices instead of having to queue at a
specified Post Office, not just any Post Office, which is the
current arrangement. In the past they had to go to a specified
Post Office and that was the only option that they had. If you
look at is the new arrangement better from a customer point of
view than the old one, very clearly it is and that is borne out
by the feedback from the DWP's assessment of customer reactions
to Direct Payment which are extremely positive, much more than
I had expected actually.
Q807 Mr Beard: The extent to which they
are better is that they have a greater choice of Post Offices
at which to queue but they still have to queue if they want free
dispensation of money?
Mr Timms: It depends when they
go into their Post Office. They can go to any Post Office branch
in the country or they can go to an ATM or they can use cash back.
That is quite a lot of extra choice beyond having to go to a specific
Post Office and queue, which was the past arrangement. It is certainly
an improvement.
Q808 Mr Beard: The Citizens Advice Bureaux
have put to us that the "growth of [charging] cash machines
in Post Offices is contrary to the Government's policy goal of
free cash withdrawal from Post Offices". How do you react
to that?
Mr Timms: I do not agree with
that because free cash withdrawal is available over the counter
at any Post Office in the country.
Q809 Mr Beard: The Treasury have a list
of postcodes where there is a concentration of financial exclusion
and the Post Office have said this morning that they have access
to that list of postcodes. Can that be made available to the Committee
as well?
Mr Timms: I have no doubt it can
be. I will check what the position is about that.[5]
Mr Beard: Thank you very
much.
Q810 Chairman: Minister, on the issue
of the pensioner, I will just read out the details because I do
not want to read anything personal out of it. The details are
that an individual has written to us, a 71 year old pensioner,
saying he has to travel a distance to his bank to get his pension
and he is paying £1.75 for each withdrawal at a cash dispensing
machine from a pension of £81.26. If he keeps that to a minimum
of one a week for 52 weeks it is £91 and he feels aggrieved
at that situation. I just mention that case to highlight the potential
problems because, as you know, 43% of the current account providers
have not signed up to the Post Office, that is RBS, HBOS and HSBC,
so if you have a current account with them you cannot get that.
Maybe this individual was not advised well by the Post Office.
There is a grievance there and I just bring that to your attention
to illustrate the grievance of some constituents who are writing.
Mr Timms: I understand that. I
think it is important for that constituent to know. Presumably
he was getting money from the Post Office in the past with his
benefit book and it is important he knows he can continue to get
his money free of charge at the Post Office with Direct Payment.
Q811 Chairman: There is an issue here
when we are talking about queuing. Minister, can I thank you for
your attendance this morning. From what I can gather from the
evidence you have given us, you are happy to support the proposition
of signing up to the Banking Code generally by people, but looking
at the detail of that is important.
Mr Timms: I would certainly welcome
particular moves in that direction, given that I have said that
it is—
Q812 Chairman: Angela was asking about
studying the dynamics of the ATM market as part of the OFT payment
systems and whether there is any information you can give us on
that.
Mr Timms: I am sorry, I am not
quite sure—
Q813 Chairman: Some information on the
study of the dynamics of the ATM markets as part of the OFT Payment
Systems Task Force. We are looking for information for the Committee
on that.
Mr Timms: I do not think we talked
about the Payment Systems Task Force. Certainly it is the case
that the Payments Task Force which the OFT is leading on is looking
at ATMs as part of its work and if you would like some information
about exactly what they are doing or what the timetable for that
is, I can certainly provide that.
Q814 Chairman: Clearer signage and comprehensive
enforcement are very sound suggestions, are they not?
Mr Timms: They are.
Q815 Chairman: If further investigation
could be done into the ATM provision, Minister, in terms of maybe
the adverse effect it has on financial exclusion, in other words
a proactive approach to that rather than a reactive approach,
that would be helpful.
Mr Timms: I do not want to give
the impression that we are about to do something that in reality
we are not. I think all I can say is we will keep an eye on developments
in this area. I would hope as well that the Committee would acknowledge
that, however you look at it, things have got better over the
last few years rather than worse.
Q816 Chairman: Yes, but you have agreed
the public policy implications of this.
Mr Timms: We certainly need to
keep an eye on it.
Q817 Chairman: There was Nigel's question
about sharing the postcodes where there is concentrated financial
exclusion. Will you look at that?
Mr Timms: I will have a look at
what we can provide.
Q818 Chairman: We may be looking at whether
people collecting their benefits are adversely affected by cash
machine charges as illustrated by the letter received from this
pensioner and if some people are alive to that concern that would
help us as a Committee.
Mr Timms: I think this goes back
to the point about making sure that people recognise they can
get their money free as they always did in the past.
Q819 Chairman: Minister, that has been
very helpful. Your submission to us has been helpful as well and
your words about the inquiry we are undertaking with regard to
public policy have been extremely valuable. Can I thank you for
your attendance here this morning and, no doubt, we will be exchanging
information again when we publish our report.
Mr Timms: Thank you all very much.
Chairman: Thank you.
5 Ev 172. Back
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