UPDATE! Council agrees to Post Bank plan

5.09.00pm BST (GMT +0100) Thu 2nd Apr 2009

Liberal Democrat plans for a 'Post Bank' in Norwich were unanimously passed at this Tuesday's City Council meeting. The new people's bank, would be run through the local Post Office Network and funded by the government.

The Post Bank idea was launched earlier this month by a new coalition of trade unions, business organisations, pensioner and pressure groups and charities, and was backed by prominent MPs including Lib Dem Vince Cable. The scheme has also won the support of Postmasters across the country.

Speaking after the meeting, Cllr Brian Watkins, Liberal Democrat Group Leader, commented "I'm pleased that our motion was unanimously accepted by all parties. It shows the political will to fight for the future of the Post Office Network in Norwich. A Post Bank would offer a secure local alternative to the discredited High Street Banks and it would allow the Post Offices to draw in new customers and increase revenue. It's a win-win situation"

The council will now write to Minister for Employment Relations and Postal Affairs Pat McFadden MP asking him to further explore the idea of a creating a Post Bank and to local MPs asking them to support the initiative.

"This is a good first step and now we need to advocate this idea and push the initiative forward. We need this Labour Government, which in 12 years has done very little to help the Post Offices, to take on the idea. They owe it to the network and they owe it to the three million people who are still denied access to basic bank accounts in the UK, as a Post Bank would help these people to access the normal banking system, through a universal banking obligation." added Cllr Watkins.

Notes:

The model for a bank proposed by the Post Bank 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.

-38 percent of small firms would consider banking with a Post Bank built on the Post Office Network.

The Liberal Democrats successfully moved the following motion at this week's full council meeting:

Post Bank

Council Notes:

The credit crunch has caused a loss of public confidence in both banks and bankers;

Even before the credit crunch, about three million people nationally and many locally did not have basic bank accounts, with pensioners and those on low incomes most marginalised;

The need to safeguard the future of the Norwich Post Office network by keeping it in the public sector, increasing investment, and diversifying its business model;

The Post Bank Coalition (made up of the Communication Workers Union, Federation of Small Businesses, New Economics Foundation, Public Interest Research Centre, and Unite the Union) has been established to advocate the setting up of a Post Bank based on the Post Office network;

A Norwich Post Bank could offer a safe, reliable banking service for local businesses and individual customers alike through the existing Post Office network;

A Norwich Post Bank could help those struggling to access the normal banking system through a "universal banking obligation" - to ensure all people have access to accounts;

The coalition's calls for links with local credit unions, such as the four credit unions in Norwich, to ensure post offices have closer ties to the local economy;

Business groups say Post Bank could create jobs in Norwich and across the country.

Council Resolves:

To help the Norwich Post Office network and local residents by writing to:

1. Minister for Employment Relations and Postal Affairs Pat McFadden MP asking him to further explore the idea of a creating a Post Bank;

2. Charles Clarke MP and Ian Gibson MP asking them to support the creation of a Post Bank in Norwich.