O'Neill leads UK Post Office benefits rebellion

Maetin O’Neill, the Labour chairman of the powerful Commons Trade and Industry Select Committee, is leading a backbench revolt over the Government’s decision to phase out benefit payments through post offices.

Mr O’Neill has put down an early day motion calling on ministers to ensure that there is a level playing field when claimants come to decide whether to continue drawing their benefits using a Post Office card account or have them paid direct into bank accounts.

The changeover puts at risk up to pounds 400m of annual revenues for the Post Office. Mr O’Neill’s intervention follows ministerial estimates that as few as a fifth of the country’s 15 million claimants will switch to the new card account when payment by giro cheques ends in April.

Mr O’Neill’s motion urges the Government to ensure that claimants are “offered a genuine choice between the options available” and that “no obstacles” are put in the way of opening a Post Office car account.

The motion goes on to say that there should be “a level playing field in the marketing, promotion and advertising of the banking options” from all government departments involved.

The trade and industry committee was alarmed to discover when it took evidence from the Royal Mail in December about the difficulties of opening a Post Office card account and the lack of information telling claimants how to go about it.

Separately, the Royal Mail awarded a pounds 650m contract to the Japanese company Fujitsu to update its computer systems, enabling Post Office customers to pay by Switch for the first time.