THERE has been a great deal of hype and scaremongering circulating the constituency regarding the Government's plans to alter the method of paying benefit. This is causing a great deal of stress to many pensioners and I would like to put their minds at rest.

The Government announced in May last year that, from 2003, the norm for paying benefits will be directly into bank and building society accounts through Automated Credit Transfer (ACT) system. There are three main reasons for doing this.

First, the move to ACT assures a safe, convenient and more efficient way of paying benefits that meet people's needs. It is a tried and tested technology, already chosen by one third of people getting benefits.

Second, it reduces the cost of red tape: each ACT transaction costs only 1p compared with 49p every time an order book foil is presented and 79p per giro cashed.

Third, it makes the system more secure from fraud.

The new system will not start immediately. The Government will not take active steps to move customers into ACT before 2003 and the programme will be phased in over two years. Until then, DSS will continue to provide customers with the information they need on benefit payment options. Customers will continue to be able to choose between payment by order book at post offices and payment by ACT into a bank or building society account as their preferred method of payment.

Having a bank or building society account will also give people access to a wider range of banking and financial services, such as direct debit facilities which makes it cheaper to pay some bills.

Some people are concerned about the impact the move to ACT would have on the future of the Post Office. The Government is well aware that many people want to collect their benefits from their local post office, now and in the future.

It is the Government's firm intention that people who wish to collect their cash at Post Offices will continue to be able to do so, before and after the change in 2003. This will mean that there is no reason why the use of post offices, often including purchases of other goods in the shops where post offices are located, should fall.

The Government is making a significant investment in the automation of post office counters of around £500-million. This should enable the Post Office to work up its strategy to offer banking services on an agency basis for a wider range of retail banks and building societies. It already has relationships with Girobank/Alliance and Leicester, Lloyds TSB and the Co-operative.

With the Post Office acting as agents for a number of banks, benefit recipients will continue to be able to collect their full benefits in cash at post offices, if they wish to do so, and bank customers generally will benefit from a wider range of access points.

In addition, the Prime Minister announced last October that the Performance and Innovation Unit (PIU) in the Cabinet Office is to carry out a study on the Post Office network. This will seek to identify the contributions made by the Post Offices to the viability of local communities; to consider how the Post Office network can best contribute to the Government's objectives for the future; and, in the process, to formulate objectives for the Post Office network.

Finally, the Government is committed to maintaining a national Post Office network and understands its importance to local communities, including rural villages and deprived urban areas.

Margaret Tucker

Secretary

Okehampton and District Labour Party

6 The Croft

South Zeal