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attack pensions change as confusing
July 18, 2003
yesterday accused the government of pushing through the new system of
direct payment of pensions and benefits into bank accounts simply to save
money and without regard to the "anxiety and confusion" created
among the vulnerable.
Commons trade and industry committee urged ministers to allow people to
carry on using the order book system if they wished. It emerged that the
Department for Work and Pensions has given an estimated 400,000 claimants
the right to use orders until 2005.
MPs demanded that the government make it easier to open a new Post Office
card account for receiving pensions and benefits. The Post Office said
that of the 500,000 who had asked for their benefits to be paid into a new
card account, only 41,000 had been able to open one. Liberal Democrat
industry spokesman, Vince Cable, said the process was "utterly
MPs said the government had failed to provide a proper cost-benefit
analysis of the new system, introduced in April. They said this made it
impossible to verify ministers' claims that it represented value for
money, such as cutting fraud by £80m.
evidence that the cost of processing a benefits payment electronically is
1p compared with 68p in the old system, Martin O'Neill, committee
chairman, said: "This was not the apogee of joined-up government
thinking." He accused the DWP of acting as a "glove puppet"
for the Treasury which wanted to cut spending.
Consumers' Council said: "We are playing with the all-important
weekly cash that some of the poorest people rely on. The government must
bend over backwards to get the new system right, or the backlash over
failures on tax credits will look like a picnic."