The Case for a Post Bank

Dear Colleague,

A booklet and question and answer sheet supporting the case for a Post Bank can be found here, please take some time to read them both. Post Bank booklet    Post Bank Q&A

For your information a Post Bank Coalition has been established by:

• Communications Workers Union (CWU)
• Federation of Small Businesses
• nef (the new economics foundation)
• public interest research centre (PIRC)
• Unite the Union

On the 17th March 09 the coalition launched a campaign for a bank to be run through the Post Office network that would provide more financial services to businesses and people not served by high street lenders. A photograph of the Unite CMA team at the event can be seen below.

Unite CMA Team

The coalition outlined plans for a Post Bank backed by the government. The model for a Post Bank proposed by the coalition would:

• provide more financial services to people and businesses currently not served by high street lenders
• strengthen the role of post offices and the post office network – making it more viable, creating new job opportunities, and securing its role for the future
• ensure a stable source of finance in the heart of communities, particularly for the three million people still not using banks and the many small businesses looking for alternative sources of finance
• link the productive economy with finance through a return to the form of ‘relationship banking’ abandoned by our biggest banks

The Post Office and its network of 11,500 branches (almost twice the number of the major high street banks combined) is a unique national resource which communities, businesses, and individuals around the UK depend upon. The Post Bank coalition believes there is a unique opportunity to answer both concerns around secure and equitable finance and the future of the post office network by setting up a Post Bank.

Evidence from the coalition members demonstrates the clear need for a local banking infrastructure through a Post Bank:

• Around three million people are still denied access to basic finance in the UK, including the most disadvantaged, pensioners and those in very remote rural areas
• The dynamic small businesses that pound for pound create more jobs than big business, are experiencing an increase in the cost of new credit through the high street banks and many are looking for alternative sources of finance to help them through the recession
• Two out of five small firms think that a Post Bank built on the post office network is a good idea and would consider banking with it

The Post Bank – which would be established with government funding, supported for example, by the issue of local bonds, would offer a variety of finance services through post office branches and online – would address these key concerns. Instead of using government money to service existing bad debt, the Post Bank would provide stable finance where it is needed most, in the heart of our local economies.

Paul Reuter, Unite national officer, said:

“Unite welcomes the valuable work of the Post Bank Coalition.  There is clearly an appetite for a banking network that would reverse the trend of exclusion of local communities and improve services to small businesses, whilst at the same time supporting and maintaining the post office network. The experience of other established Post Banks in Europe are successful examples. The Post Bank – at the People’s post office offers an opportunity for social inclusion, security and innovation in the banking sector which government must endorse.”

What can you, the reader of this blog post do?

You can get your local MP to support Early Day Motion 1082

1. “This House congratulates the Post Bank Coalition (Communications Workers Union, Federation of Small Businesses, National Pensioners Convention, new economics foundation, public interest research council, Unite the Union) on its plans for a new state owned Post Bank based on the Post Office network; recognises the importance such a Bank could have in underpinning the future sustainability of the Post Office network; and calls on the government to set up a Post Bank as soon as possible in order to combat financial exclusion and allow communities and local businesses to access a fair and trusted banking system.”
2. Debate the issue at local union branch and constituency Labour Party meetings.

Paul Reuter at the event with Baroness Margaret McDonagh

In Solidarity

The Campaign Team