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Payment Arrangements (Bank Accounts)

6. Mr. Mike Weir (Angus) (SNP): What recent representations he has received relating to his policy of direct payment of pensions and benefits into bank accounts. [5078]

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): Neither I nor my ministerial colleagues have received any recent formal representations, although Ministers regularly respond to letters and questions in the House about direct
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payment matters.Over 15 million people—97 per cent. of our customers—are now being paid into an account, and very few are reporting any problems.

Mr. Weir: The Minister will be aware that National Australia bank—the parent bank of both the Clydesdale and Yorkshire banks—has recently announced a closure programme. Several of the branches in the first round of closures in Scotland were the last remaining bank branches in those communities. The policy of direct payment has already undermined many sub-post offices. Many communities have also lost their banks and many more are likely to do so. Will the Minister look again at the policy, otherwise, the only thing left to many pensioners will be to rely on fee-charging automated teller machines?

Mrs. McGuire: I do not wish to comment on the commercial decisions made by any particular bank, including those that have not become involved in partnership with the Post Office to allow full access to their accounts. However, 98 per cent. of pensioners now have their pensions paid by direct payment. I do not want the hon. Gentleman to establish a climate of fear out there about pensions having to be paid through ATMs. There are 15,000 post offices and 32,300 free ATMs where people who get their payments by direct payment can access their cash.

Mr. Henry Bellingham (North-West Norfolk) (Con): During the election I visited a number of small sub-post offices that have lost substantial business because of automated credit transfer. One particular concern is pensioners who used to rely on a carer, a friend or a member of the family to collect their pension. Under the old book system, anyone could collect it. Under Post Office card accounts, only one person can be nominated. What does the Minister intend to do about the problem?

Mrs. McGuire: That was part of the problem with the old book system—anybody could collect the pension, even if the pension book was stolen, dropped, lost or whatever, and it cost £50 million a year in fraud. We should recognise that we have built in a system that is more secure and has dealt with fraud. People, particularly older people, can nominate a third party to cash a cheque of up £450, or can have a separate card with a separate personal identification number so that their pension can be collected. But the message needs to go out that pensioners and those who receive direct payments can still get their cash on the day that they want it at their local post office. I should think that is to be applauded.

Child Support Agency

7. Annette Brooke (Mid-Dorset and North Poole) (LD): If he will make a statement on the Child Support Agency. [5079]

13. John Mann (Bassetlaw) (Lab): What time scale has been set for all Child Support Agency claimants to be assessed on the new system. [5085]
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The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): The problems with the Child Support Agency are well known to all of us in the Chamber and to very many of our constituents. In April we appointed a new chief executive and as a priority we have asked him to address those problems and to carry out a wide-ranging review of the agency's operations and structures. He will report his findings to us in the summer and will set out his proposals to address those problems and improve the agency's performance, including the transfer of cases to the new system.He will be looking at short, medium and long-term actions.

Annette Brooke: New system or old, what measures will the Minister take to ensure that statements of earnings submitted by the self-employed are checked more effectively? Does he consider it sensible to transfer some of those operations to the Inland Revenue?

Mr. Plaskitt: The self-employed present the CSA with particular difficulties, which it is important to deal with effectively. We have introduced the possibility of communications with the Inland Revenue on information about the income of the self-employed, which has helped the CSA with some of those cases, but we should not transfer the whole case load to the Inland Revenue. Agencies are not queuing up to take over that responsibility, and the Inland Revenue also has difficulties with the self-employed, so the hon. Lady's proposal runs the risk of changing one set of problems for another. We will listen to the new chief executive to see whether we can resolve the problems in the CSA and get its house into order.

John Mann: The Secretary of State loves targets for the public sector, and so do I: will a clear time scale be set publicly in the summer for all CSA claimants to be assessed on the new system?

Mr. Plaskitt: The important thing is to make sure that the new system, which currently contains some 300,000 cases, works properly. It would not make sense to set an arbitrary timetable to achieve the transfers. Once we are confident that the IT is working, we can examine the transfers process, but I do not want to consider the transfers process until we are confident that the system will work effectively.

Mr. David Gauke (South-West Hertfordshire) (Con): Given that we currently run a dual system and that some of those on the old system would be better off under the new system, what legal advice have the Government taken to ensure that they are not vulnerable to a claim for compensation?

Mr. Plaskitt: The important issue is making sure that we resolve the difficulties in the CSA, which is precisely why the new chief executive is conducting a thorough assessment of the current situation and examining all the issues. When we receive his report in the summer, we will examine what action can be taken to deal with the problems and to start to get the CSA into order.

Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): Is my hon. Friend aware of the anger felt by many parents who were on the old system and
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who are waiting for their cases to be migrated on to the new system? In many cases, payments under the new system will be substantially lower than under the old system. Some parents fear that it will take several years for payments under the new system to reach the correct level, and some of their children will be over 16 by that time. What reassurances can my hon. Friend give to people in that difficult situation?

Mr. Plaskitt: I entirely understand my hon. Friend's point. As I have said, 463,000 cases are subject to the new formula. Maintenance settlements under the new formula are different from those under the old formula—all hon. Members have dealt with maintenance settlements under the old formula that are difficult to understand. The transfer of cases to the new formula will involve a phased process to allow both the non-resident parent and the parent with care to get used to the new formula. It has been suggested that that process will involve a three-year phasing, which is one of the issues that the chief executive is examining, and we will be interested to see what he says about it in his report.

Mr. Paul Goodman (Wycombe) (Con): I congratulate the Minister on his appointment but remind him that, speaking about the CSA a few weeks ago at Work and Pensions questions, when he was asking questions rather than answering them, he said:

So I ask him, whose fault is it, and when will it be put right?

Mr. Plaskitt: That is why I am delighted to be where I am now; I know what the questions are on the CSA and know what needs to be answered. I am looking forward to reading what the chief executive tells us because, like him, I want to get to grips with these issues. Far too many people are caught in the web of the CSA and experiencing difficulties, and we want to get those matters resolved as soon as possible. However, the important thing is to ensure that we have bottomed out the problems, that the systems work, and that the IT is sorted out. Then, we can start to sort out the agency's problems.

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