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MSPs and CWU Say Time is Right for Post Bank

25th June 2009

A comprehensive proposal for a new 'Post Bank' to run as part of the post office network will be launched at Holyrood today (Thursday 25th June) by a coalition of trade unions, a business organisation, pensioner and pressure groups and charities.

Representatives from all Scottish parties are attending the event which takes place between 2.30pm and 3.30pm in Committee Room 3 at the Scottish Parliament.Speakers from theCommunication Workers Union, Federation of Small Businesses, New Economics Foundation, and Scottish Pensioners Forum will outline the Post Bank campaign. The campaign is supported by the Scottish TUC. Billy Hayes, CWU general secretary, said:"Post Bank is the right proposal at the right time politically and industrially. It answers the needs of the financially excluded and will appeal to many in this time of economic uncertainty. "Post Bank will be a true People's Bank meeting the needs of society and business alike and will bring crucial security to the post office network, especially for rural areas of Scotland. The government must move swiftly to endorse this timely proposal." Paul Reuter, national officer of the Unite union, added: "I am convinced that Scotland has an appetite for a banking network that would reverse the trend of exclusion of local communities and improve services to Scottish businesses, whilst at the same time supporting and maintaining the post office network in Scotland. Post Bank - at the People's Post Office - offers an opportunity for social inclusion, security and innovation in the banking sector which we invite the Parliament to endorse." And Federation of Small Businesses Scottish policy convenor Andy Willox said: "We know small businesses want a Post Bank and would use one if it was created. Not only would that help safeguard the future of the post office network, it would stimulate better competition in the Scottish small business banking market."

With a far lower population density than England, Scotland's more isolated rural communities are profoundly affected by post office closures - 771 have been closed since 2003, leaving just 1,116 remaining - and Post Bank could bring with it enormous social and economic benefits.

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.

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.

Instead of using government money to service existing bad debt, Post Bank would provide stable finance where it is needed most, in the heart of our local economies. The government must now seize this opportunity and build on the foundations of the post office network to create a Post Bank that works for the people and businesses of the UK.