My post for a people’s bank

By John Prescott

I’m delighted to hear and support the calls for a “people’s bank” or Post Bank.

This year, the Post Office marks its 40th anniversary as a public corporation. They say life begins at 40, so we really should consider giving it a new lease of life by turning it into a people’s bank.

For the three million people who don’t even have a basic account, the Post Office should be allowed to provide them with basic financial services, which most of us take for granted. To do this, the Post Office card account scheme, which I was closely involved with in the past, should be expanded to become a real alternative to an account with a private bank.

Turning the Post Office into a people’s bank was one of the actions we were campaigning for in our No Ifs No Buts Facebook campaign last year, along with calls for banks to pass on the interest rate cuts to customers and for RBS to stop handing out £1bn of our money in bonuses. That’s why it’s great to see the CWU, Unite, the Federation of Small Businesses and the National Pensioners Convention coming together to put forward the proposal for the Post Bank.

You can see why it’s a win-win for everyone. SMEs heavily rely on a good local Post Office, and the ability to offer more credit to local businesses when liquidity is still a problem is just common sense.

For pensioners, it would ensure the local Post Office receives more revenue and continues to provide that valuable community link for social interaction, as well as offering a trusted financial institution to look after their money. And for Post Office workers, it helps to strengthen the financial position of Royal Mail, with the possibility of creating an extra 11,000 jobs.

In fact, there’s no better time to launch a bank with a more ethical approach when the whole system of banking is under review after years of greed in the sector. It’s also noticeable that another ethical financial institution, the Co-op bank, didn’t experience the meltdown that its more profit-driven rivals did.

I’m also glad to see government is seriously considering the Post Bank proposal. It shows that ministers are willing to listen to good ideas.

But it’s really interesting that the Post Bank should be launched on St Patrick’s Day. The Post Office partnered with the Bank of Ireland to deliver the Post Office card account. What’s more, the Bank of Ireland – a commercial bank – splits the profits with the Post Office. It’s another example of a public private partnership in our postal services.

The difficulties are how we can continue to provide subsidies for our 11,500 Post Offices and find extra capital to modernise the Royal Mail and the Post Office.

The new bill has given a commitment that the Post Office will remain wholly publicly owned, subsidised, and that there will be legislation to prevent the creation of Post Office shares. But in the case of the Royal Mail, perhaps other ways can be found to bring in sufficient private capital and business expertise in a public private partnership without diluting its ownership, to ensure it remains publicly owned and publicly accountable.

On my Go Fourth blog on Monday, I called for an intelligent debate on public private partnerships in the Royal Mail and Post Office, which Michael White referred to on the Guardian politics blog.

So, let’s now look at how a Post Bank, the Post Office and the Royal Mail can work together to ensure we have a modernised and more efficient postal system that guarantees universality but remains, at its very heart, publicly owned and publicly accountable.

Read John’s blog on GoFourth here.

Related posts:

1. A different approach for the Post Office
2. A very long post – about the post
3. Have your say on the future of the Post Office
4. Labour launches virtual phone bank
5. Brown and Mandelson must be prepared to act over bank bonuses