Rt Hon Lord Lilley

    Supplementary Oral Question ? Work and Pensions

    Mr. Peter Lilley (Hitchin and Harpenden): Will the Secretary of State confirm that, when the universal bank was announced, it was intended to provide revenues to fill the black hole of ?400 million in the finances of sub-post offices caused by the Government‘s decision to force people to have their benefit payments made into their bank accounts? Will he also confirm that, far from contributing revenues to make good that lost income, the universal bank will cost ?180 million over its first five years? Will he, therefore, assure the House that neither he nor the universal bank will try to obtain revenues from the poorest of the poor by charging the bank‘s users, who will, by and large, be benefit recipients who previously had no bank account? Is it not monstrous that he should even think of getting money from such a source?

    Mr. Darling: I admire the right hon. Gentleman‘s gall. I thought that he might have wanted to refer to the benefit payment card, which I see has yet again been the subject of damning criticism by a Select Committee, and for which he was responsible. He says that people are being forced to move to automated credit transfer, but as a former Secretary of State for Social Security, he must be aware that about 40 per cent. of benefit and pension recipients already receive their money by ACT. In relation to child benefit, something like 57 per cent. of new applicants ask that the money be paid directly into a bank account. Because of that, we needed to put in place measures that would protect the position of the Post Office. The universal bank is designed to do just that.

    The right hon. Gentleman presided over a situation in which benefit card costs rocketed out of control and he came up with a product that was virtually obsolete before it was delivered; but I believe that the universal banking service provides the Post Office with the best opportunity to manage the change that is already taking place.

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