Dismay as government scraps Post Office 'people's bank' plan

By staff writers
November 9, 2010

Pensioners' organisations, small businesses, trade unions and community groups have expressed dismay and frustration at the news that the government has abandoned plans to turn the Post Office into a state-backed 'people's bank'.

There is particular anger at the Liberal Democrats, who had publicly backed the idea before the last election, and are being accused of betraying yet another pledge in exchange for a role in the governing coalition.

Campaigners reject Postal Affairs minister Ed Davey's claim that the plan is not viable, claiming that the decision is ideologically based.

"The government fears that a successful and popular state-backed bank would undermine both its attack on public services and its determination to bolster the interests of its big business friends," a pensioners' activist told Ekklesia last night. "But once again it is poorer people, rural communities and the vulnerable who will be the losers."

Though spurning the 'people's bank' idea, the government is proposing an agreement with RBS and NatWest that will give their customers access to current and business accounts at Post Office counters.

Despite over 6,600 closures, which have hit many local communities badly, the Post Office's 11,500 branches are still more than all the other banks have put together.

The government says there is no "closures plan" and that it is investing more money in the service. But the Communication Workers Union (CWU) accuses them of misleading the public through propaganda - pointing out that the current funding package is £360 million less than the previous one, that further closures are not being ruled out, and that the Business Secretary Vince Cable and Ed Davey, the Postal Affairs minister have reneged on a Lib Dem manifesto commitment to establish the Post Bank.

Billy Hayes, CWU General Secretary, commented: "Saying 'no programme of closures' is very different from saying 'no closures'. And the rhetoric of post offices being the shop front for government services is already being exposed, as benefit payments look set to move away from post offices to the private company PayPoint."

Speaking on 9 November 2010, he continued: "Today's statement is light on any detail other than the decision to spike Post Bank. This would have brought lucrative business to the Post Office and access to finance in all communities for small businesses and the financially excluded. Being triumphant about securing access to accounts in banks owned by the taxpayer is ludicrous and a huge climb-down for the Liberal Democrats."

"Ultimately this government is preparing more damage than security for post offices. Privatising the Royal Mail and splitting it from the Post Office will threaten more than a third of the Post Office's revenue, dwarfing the government funding package," said Mr Hayes.


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