Please send me SCA's fortnightly briefing:

July 10, 2009

The Post Bank – The Peoples’ Bank

The Post Office network, sitting at the heart of so many communities, is one of this country’s greatest assets. Now that government interest in part-privatisation has cooled, attention is turning to how we can make better use of this national resource. A proposal for a new kind of bank – the Post Bank – a bank for people, communities and small business is rapidly gaining support

A new state-backed ‘people’s bank’ based in post office branches could be formed using the government-owned Northern Rock, a new report claims.

A coalition of groups including unions and businesses have released detailed proposals of plans it claims would protect the post office branch network from further closures and support local communities and smaller firms.

In its report, the Post Bank Coalition outlines four options the government could follow including using Northern Rock as a foundation to a mutually structured people’s bank, and buying out the Bank of Ireland’s stake in the Post Office.

Lindsay Mackie, campaign coordinator at the New Economics Foundation, said the government had overlooked the value of the Post Office as a vital national resource for too long.

‘Now it must act to establish a Post Bank to help to build strong, resilient local economies that can bind communities together, survive hard times and flourish in good ones,’ she said.

The coalition argues that a Post Bank would support government targets to combat financial exclusion, introduce much-needed diversity into the retail banking system and address the need for finance for small businesses, as well as providing crucial new business for post offices.

Billy Hayes, general secretary of the Communication Workers Union, which is part of the coalition, said: ‘We have met the challenge to create a workable model for the creation of a Post Bank. There’s never been a better time to set up a Post Bank.’

The coalition’s proposals were released ahead of the Berr select committee’s report on the future of post offices.