Release: 9 December 2003

SCRAPPING PENSION BOOK MEANS 150,000 FEWER CUSTOMERS FOR POST OFFICES IN WALES

New figures released today by the Liberal Democrats show that the post office network will lose up to 150,000 customers in Wales, as pensioners move to collect their entitlement at banks and building societies. The exodus will mean the post office network is robbed of vital income as they receive a fee for processing each benefit payment.

The figures have been produced by the independent House of Commons library, and show that the Government's plan to scrap the pension book will result in a massive loss of revenue for the post office network.

The Government is writing to all pensioners and benefit claimants who pick up their money at the post office and telling them to choose one of three 'direct payment' options. Many pensioners have reported being talked into signing up for new bank accounts and internal Government documents reveal that staff are under pressure to push to customers into taking this 'cheap' option.

Welsh Liberal Democrat Social Justice Spokesperson, Peter Black AM, commented:

"Millions of pensioners chose to have a pension book. The Government is now telling them to think again. It's clear that the Government have their own agenda and are not discouraging the mass exodus of pensioners out of the post office and into the high street banks.”

"The plans will rob the post office network of vital revenue and will accelerate the rate of closures. The Government's plans are driven by cost-cutting and not what is best for post offices or pensioners. Welsh Labour politicians who are complaining about Post Office closures in Blaenau Gwent and Llanelli would do well that many of these closures are as a direct consequence of this Labour Government policy. It is likely that more closures will follow in other parts of Wales over the next few months on a similar scale. “

"It is not too late for the Government to think again and allow pensioners to hang on to their pension books."

END

Notes to Editors:

· This morning (Tuesday 9^th December) a delegation of Liberal Democrat MPs, presented a 12,000 signature strong petition from their long-running 'Save Our Pension Book' campaign to No. 10 Downing Street.

· The Government's Payment Modernisation Programme involves writing to all pension and benefit claimants who do not have their money paid directly into a bank or building society account. The 'invitation' offers three payment options 1) Direct into a normal bank or building society account 2) Direct into a new basic bank account, and 3) Directly into a Post Office Card Account. Pensioners are NOT being given the option of retaining their pension books.

· The Government's programme is running over a two year period and aims to convert all those invited by April 2005.

· The new figures commissioned from the independent House of Commons Library are based on the responses from pensioners and benefit claimants who have already received the Government's 'invitation'. The new figures predict the outcomes when the Government's programme is completed in 2005.

· The Post Office will not receive any revenue from customers who withdraw their cash from a normal bank or building society account via the provider's branch, nor will they receive revenue from customers who opt for a basic bank account and get their money from the bank or building society that provides the account. The post office will receive a fee for customers who are able and choose to access the money via a basic bank account at the post office. NOTE the Government does not know how many customers who have provided their bank details are opting for normal or basic accounts.

· An internal DWP document states "In order to meet Business Case requirements we need to move quickly toward getting 9 out of 10 customers who make a new claim onto Direct Payment. Any further delay will cause overwhelming backlog in 2004/05 impacting on field performance...we also need to pay most of these customers into bank accounts which cost 1p rather than into Post Office card accounts which cost at least 30 times more...emphasis[e] Post Office [card accounts] is probably not the best option for customers."

· The new figures also show that very large numbers of pension and benefit claimants are not responding to the Government's 'invitation'. Of the 6,553,600 pension and benefit customers who have been asked to respond to the invitation, only 4,686,339 have so far done so.