Government should make our post offices the new banking force

Date Published: {J}

The irony won’t be lost on the staff who are currently facing the dole queues but at a time when the Labour party is proposing the turn Britain’s post offices into the community bank, we’ve gone and closed Postbank which could have done precisely that here.

Postbank, the bank jointly owned by An Post and French bank BNP Paribas, operates banking, savings and investments, and insurance services in around 1,000 post offices across the country – but it will shut up shop at the end of this year.

Meanwhile the UK has around 12,000 post offices which Gordon Brown plans to use to establish a new People’s Bank.

One union official here said the decision to shut Postbank would be seen as a missed opportunity to provide straightforward banking services to ordinary people through the post office network. The same could be set of the Credit Union network which has been a lifeline for tens of thousands of customers in good times and bad.

And that’s half the argument – but what the post offices and credit unions have in buckets (and the banks do not) is people’s trust. We don’t think they’re ripping us off, trying to ply us with loans we can’t afford.

The local postmaster or mistress isn’t jetting out to their holiday home in Barbados or heading out for dinner at the Club; they are people who are enshrined in the community with the best interests of that community at heart.

One could argue that the near-collapse of the banking system was caused by computerised geniuses who had lost touch with the real world.

And despite the bail-out, the banks haven’t changed their spots. They protest at new levies, limits to bonuses or any imposed change to their structures.

Anglo Irish is about to seek billions more of our money to stay afloat – and at the same time a radical alternative through our post offices is being shut down.

A People’s Bank – offering current and savings accounts, help with financial planning, and a way for credit unions to reach individuals – would provide a real alternative.

Of course there are security issues with all this and clearly some of the smaller outlets and sub-post offices wouldn’t necessarily have to be included – but large villages, towns and cities could get this system started which might then be rolled out to others as time goes on.

Much of the justification for bailing out Anglo Irish was to do with the need for a third banking force. The post office/credit union network could have been that force.

They encourage responsible saving and investment; they facilitate loan requests and they are enshrined in every town and village in the country.

The Postbank business model may not have worked but the fundamental idea was a sound one – why else would Britain be doing the same thing now in an effort to stimulate its economic recovery?

The business remains open until the end of the year, which is more than enough time for Government to re-evaluate what contribution the post office and/or the credit union could make to our economic revival as a third banking force.

And even if it might take some time to reach full viability, chances are the taxpayer would be a whole lot happier propping up a financial institution enshrined in its community as opposed to bailing out a toxic bank whose only contribution was to bring this country to its knees.

For more, read this week’s Connacht Tribune.