First-class idea for a people's bank

[TrueBlueTerrier]

http://www.sundayherald.com/oped/opinio ... 03.0.0.php

Joanna Blythman on the post office

LET'S TURN the Post Office into a publicly-owned people's bank and use its network of 14,500 branches in most neighbourhoods and rural areas to provide the public service which the banking system has failed to deliver. Now there's a big, radical idea, but one that's building up a head of steam.

As the recession bites and pensions and investments nosedive in value, a wave of disaffection with our financial system is sweeping the country, triggering a deep longing for a financial institution that's solid and trustworthy.

Until recently, this proposition was only taken seriously by Labour left-wingers like Jon Cruddas MP and the trade unions of this sector. Government was in thrall to deregulated free-market economics, and key parts of the business of the Post Office and Royal Mail were up for tender to the private sector, the acceleration of a long, slow death by a thousand cuts that would lead, inexorably, to privatisation.


Before the financial crisis, the government, through its eminence grise, Peter Mandelson, seemed to be calling for the privatisation of Royal Mail, refusing to see that it could have a remit that goes beyond the purely commercial. Now, following the banking bail-out, he is urging the prime minister to save the Post Office network by "allowing it to provide financial products and government services". There are echoes here of the people's bank idea.

More evidence that the financial shock has caused the government to rethink its unbridled enthusiasm for the privatisation of such vital services came last week, with work and pensions secretary James Purnell's decision to cancel the competitive tender for the processing of state benefits, leaving the business, worth £1 billion, in the hands of the Post Office.

So what we have is a temporary reprieve for the 3000 post offices that would have closed if the post office card account had gone to PayPoint, and a window of opportunity to make the case for reinventing our denuded post office network as an accessible, reliable banking system.

This requires a leap of faith and not a little vision.

But for too long, our post office network has been a shadow of its former self. Once the linchpin of both rural and urban communities, government policy has treated it like a second class, anachronistic, Cinderella service for the poor, the aged and people who can't drive to a petrol station or supermarket to use a cashline or PayPoint.

Younger generations can no longer remember when post offices inhabited handsome, purpose-built premises which spoke of public pride in a cherished public service.

Britain created the first postal savings bank in 1861, and by the early 20th century many other countries had copied the model.

I have the good fortune of living near a pleasant sub-post office and am on first-name terms with Amar and Shaukut, the pleasant, helpful, efficient people who run it.

Their post office props up an entire parade of shops left vulnerable by supermarket sprawl.

But these days, with so many of the profitable services that sustained them - such as TV licensing - stripped away, too many post offices have become claustrophobic little counters with long queues, stuck away at the back of deadbeat convenience stores, desperately selling every bit of tat they can lay their hands on to try to supplement their dwindling income.

No wonder it is the ambition of most people to visit the post office as little as possible.

The Royal Mail has been similarly run down and asset-stripped. The government has aided and abetted private companies in cherry-picking its most profitable services.

What do we have to show for this creeping privatisation that was to bring a better service and increased profitability for the taxpayer? Slower delivery times, fewer pick-ups, more cards through the door that require you to pick up parcels from depots of private courier companies inconveniently located on faraway industrial estates, and shockingly low morale among Royal Mail staff.

The Hooper review on the impact of liberalisation on British postal services is about to report its findings. However, it has already concluded that the breaking-up of the Royal Mail has failed most users.

As for the government's refusal, on grounds of cost, to support post offices to the tune of £150 million a year through the social network payment, that now looks like a very bad joke indeed when you consider Gordon Brown's £500bn bail-out of our shaky banks.

Both our post office network and the Royal Mail need to be modernised and made responsive to the needs of citizens. They have been run down just enough to make them look irredeemably inefficient and outdated.

Yet in their scope and reach there is so much that they still do well, and could do even better, were they given the long-term security that government means to retain them as valued, state-owned public assets.

The people's bank? Let's add the people's post office, and charge government with developing them both.

[Poshpost]

For those of you who are too young to remember have a read of the below wikipedia entry for the National Gio Bank....
"In the early 1960s, the majority of adults in the United Kingdom did not have a bank account and the banks did not court business from the working classes, which they regarded as unprofitable. If you were working class, you would be paid weekly and in cash. If middle class, you were more likely to be salaried and paid with a bank cheque at the end of the month. If you could afford to have a bank account, you could pay the cheque into the account -- but even among the middle class, many had no bank account.

In the 1960s, although most towns had one or more bank branches, smaller communities very often had no bank branch at all. Post Offices, on the other hand were just about in every community. There used to be about 22,000 Post Offices in the UK compared to about 3,000 bank branches. The Post Office was ideally placed to establish a viable mass banking system.

The banks also were rather secretive about their tariff structure which were never published. The Post Office would publish a tariff of charges, the key one being that transfers between accounts would be free of charge, thus encouraging the adoption of the system. At a stroke the National Giro, as the service would be called, would, it was hoped, revolutionise banking in the UK.

Computerisation, it was argued would transform the profitability of the new system, and it was estimated that a payment between two National Giro accounts could be made in 24 hours if there was a central accounting office located at a good communications hub. This would also speed up the national bank payment clearing system based on local bank branches and centralised cheque exchange requiring cheques to be returned to local branches. This had (and to this day still has) a 3-5 day clearing cycle.

The Wilson government placed an Act before Parliament and The Post Office's central planning department and its new Computer Division began business and technical planning for the new service.

The Post Office bought land at Bootle on Merseyside on the site of a sidings of the North Mersey Branch railway. It also built a large, purpose built office and data processing complex for the site. It was rumoured that the buildings had been planned with an alternative use as a hospital should the project be abandoned.

The National Giro was the first financial institution in Europe and possibly the world, to be established from the outset to be fully computerised. What's more, it broke new ground in Europe when it adopted Optical Character Recognition for its transfer, inpayment and outpayment transaction documents, making it possible for the first time for utility companies and mail order companies to print their own personalised remittance slips and automate at least part of the complex accounting processes. By the late 1970s, one pound in every four pounds deposited in cash at a bank in the UK was deposited with the National Giro at the Post Office. This would later rise to one pound in every three. The organisation was again profitable and repaying its capital costs. Indeed, its rate of return on capital was higher than that of the commercial banks."

What happend to the National Giro Bank? Thatcher sold it to Alliance & Leicester in 1989, who, since 10th October 2008, are now part of Spanish bank Santander.

[k979aaa]

For those of you who are too young to remember have a read of the below wikipedia entry for the National Gio Bank....
"In the early 1960s, the majority of adults in the United Kingdom did not have a bank account and the banks did not court business from the working classes, which they regarded as unprofitable. If you were working class, you would be paid weekly and in cash. If middle class, you were more likely to be salaried and paid with a bank cheque at the end of the month. If you could afford to have a bank account, you could pay the cheque into the account -- but even among the middle class, many had no bank account.

In the 1960s, although most towns had one or more bank branches, smaller communities very often had no bank branch at all. Post Offices, on the other hand were just about in every community. There used to be about 22,000 Post Offices in the UK compared to about 3,000 bank branches. The Post Office was ideally placed to establish a viable mass banking system.

The banks also were rather secretive about their tariff structure which were never published. The Post Office would publish a tariff of charges, the key one being that transfers between accounts would be free of charge, thus encouraging the adoption of the system. At a stroke the National Giro, as the service would be called, would, it was hoped, revolutionise banking in the UK.

Computerisation, it was argued would transform the profitability of the new system, and it was estimated that a payment between two National Giro accounts could be made in 24 hours if there was a central accounting office located at a good communications hub. This would also speed up the national bank payment clearing system based on local bank branches and centralised cheque exchange requiring cheques to be returned to local branches. This had (and to this day still has) a 3-5 day clearing cycle.

The Wilson government placed an Act before Parliament and The Post Office's central planning department and its new Computer Division began business and technical planning for the new service.

The Post Office bought land at Bootle on Merseyside on the site of a sidings of the North Mersey Branch railway. It also built a large, purpose built office and data processing complex for the site. It was rumoured that the buildings had been planned with an alternative use as a hospital should the project be abandoned.

The National Giro was the first financial institution in Europe and possibly the world, to be established from the outset to be fully computerised. What's more, it broke new ground in Europe when it adopted Optical Character Recognition for its transfer, inpayment and outpayment transaction documents, making it possible for the first time for utility companies and mail order companies to print their own personalised remittance slips and automate at least part of the complex accounting processes. By the late 1970s, one pound in every four pounds deposited in cash at a bank in the UK was deposited with the National Giro at the Post Office. This would later rise to one pound in every three. The organisation was again profitable and repaying its capital costs. Indeed, its rate of return on capital was higher than that of the commercial banks."

What happend to the National Giro Bank? Thatcher sold it to Alliance & Leicester in 1989, who, since 10th October 2008, are now part of Spanish bank Santander.

An OUTSTANDING POST for we cannot change the past but our very future hang's in the balance of the GLOBAL POWER'S THAT BE NOW (BANK'S) for even govenment's the USA and the UK cannot make the bank's do as they wish anymore!. It is if the goverment's of the said nation's thought that the bank's of the world and those nation's could control their GREED FOR MONEY!. For can we blame the greedy banker's in one answer NO as goverment's of the world should regulate and oversee this!. What the hell are we paying our government for to go on boat's with billionair's and shake hand's with the rich and famous and thus sell us short!.