Survey boosts case for bank of the people

Feb 15 2010 By Karen Dent, The Journal

BUSINESS leaders have come together with unions, rural campaigners and pensioners' groups to call for a publicly owned bank that will serve them rather than shareholders.

The extraordinary coalition of groups normally at different ends of the political spectrum has reacted to the banking crisis of recent years by calling on the Government to set up a new banking model that will operate in post offices around the country.

The plan has the support of three-quarters of people in the North East, according to a poll carried out by the Post Bank Coalition.

Many small businesses in the region are still facing huge problems getting loans and overdrafts because of the problems caused in the banking sector since the credit crunch began in 2007.

The Post Bank Coalition is made up of groups including Federation of Small Businesses, the Communications Workers Union, Countryside Alliance and the National Pensioners Convention.

Pauline Osborne, regional chair of the Federation of Small Businesses in the North East, said: "The results from this survey show very clearly that the high street banks do not meet the needs of small businesses and that a Post Bank – a new bank set up in Post Offices around the country – would provide a solution to the problem of poor access to finance."

In a poll for the coalition carried out by YouGov, three-quarters of people in the North East backed the idea of a bank focused on customers rather than profits while more than six out of 10 said they would use that sort of bank if it was run by the Post Office.

The Coalition said a post office-based bank could breathe new life into the branch network and prevent further closures.

The Government is currently taking feedback on its plans to expand the Post Office’s financial services arm, which is the one part of the network that is expanding. Other Post Office services have been hit as increasing numbers of people use the internet for services like taxing their car.

Almost eight out of 10 people in the North East quizzed by the group said that all profits from such a bank should stay in the business and support the Post Office network. And just 16% said the current choice of high street banks was meeting the needs of the region’s communities and businesses.

Communication Workers Union general secretary Billy Hayes said: "This poll sends a clear and strong message to politicians: Britain wants a bank it can trust.

"Post Bank would serve real people, not just shareholders. The Government has a golden opportunity to make this a reality with the current consultation.

Simon Hart, chief executive of the Countryside Alliance, said: "Post offices in rural areas form the hearts of their communities and provide a lifeline to the many young mums, pensioners and rural businesses they serve. The Government now has a chance to recognise the role of the post office as the social and economic centres of rural Britain by supporting the Post Bank proposal."

Dot Gibson, general secretary of the National Pensioners Convention, said: "Pensioners are great supporters of the Post Office as it offers them a lifeline to the wider community.

"They want to see it flourish in the future and a publicly owned people's bank at the Post Office would be good news for all ages. It’s time the political parties listened to public opinion before it's too late."

The Government’s Post Office banking consultation is due to close on February 24.

Lindsay Mackie, from the New Economics Foundation, said: "The message from these polls is so clear that it would be remarkably perverse of any Government not to listen to it."