Post Bank 'a gift for Government'

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The campaign for a Post Bank has been stepped up after the Government was told it would be a “gift” to provide trusted banking services to businesses and communities as well as save jobs.

A coalition of groups pressing for the move said 240 post offices had gone out of business in the 18 months to last October outside the national programme of closures, proving that the Government’s policy was “failing”.

A report warned that without a Post Bank, the network of offices faced a “long decline”, and an opportunity to create a socially useful bank would be lost.

Billy Hayes, leader of the Communication Workers Union, said: “Post Bank offers an opportunity to solve two major issues facing the country – saving our post office network and bringing trusted banking to communities everywhere.

“This is a gift to the Government, an all-round good news story and an initiative which would bring real, measurable positive change to Post Office staff who are fearing for their jobs and to businesses and communities struggling to find suitable local banking. We urge the Government to embrace Post Bank and take measures to make it a reality.”

Clive Davenport of the Federation of Small Businesses said: “Following the crisis in the banking sector and with the demise of the post office network, we have long been saying that creating a Post Bank is the perfect opportunity to help tackle these.

“The UK banking system really needs more competition to give small firms a better chance of securing a good deal. Creating a Post Bank will not only help to do this, but it will also help keep the thousands of sub-postmasters’ businesses alive.”

A Business Department spokesman said: “We announced in November 2010 that we would not set up a state-backed Post Bank having looked carefully at the case for doing so, including the arguments of the Post Bank coalition.

“Establishing and capitalising a new state-backed bank would ultimately prove to be very expensive and create a much more volatile balance sheet for Post Office Limited. We believe that the funding of £1.34 billion Government has set aside for the post office network will be better spent on maintaining and modernising post offices.

“The Government is committed to improving stability and competition in the banking sector, setting up the Independent Commission on Banking to make recommendations on how this can be achieved.”