Friday, March 04, 2011

Post Offices: Time for Liberal Democrats and Red Tories to come together

In Phillip Blond's Red Tory, sub post offices assume an almost theological importance. As Blond said in Prospect in 2009, in an article that owes much to his book and was reprinted on the ResPublica site:
Cameron should announce a reconfiguration of the Post Office to extend its currently limited retail banking function, and reverse Peter Mandelson’s privatisation plan. The Post Office is universally popular, national, tied to the local community and, crucially, entirely free of bad debt secured on declining assets. Other banks would lend to it but, more importantly with interest rates approaching zero, the Bank of England could use at minimal cost “quantitative easing” (printing money) to underwrite both business and mortgage credit.
Using the Post Office would introduce some public sector competition. Yes, the state’s balance sheet would expand, but at nominal cost. If it helps to arrest the fall in asset prices (as a restoration of lending would) any public money spent would secure money already invested in Brown’s bailout, and be far more effective than any fiscal stimulus.
This new Post Office could genuinely restimulate the economy by lending at small margins, and by being involved in local investment rather than global speculation. It could even be localised rather than privatised, giving it back to communities, to extend investment and increase prosperity in every neighbourhood.
I wonder, then, what Blond made of this morning's Guardian:
A quarter of a million benefit recipients, including pensioners and those on disability allowances, will have to cash in their giro cheques at off-licences and petrol stations under government plans.

Unions and consumer groups united to condemn the decision to remove the contract to process the benefit cheques from the Post Office and give it to private sector company PayPoint. The move also flies in the face of ministers' promises to protect the Post Office by making it the "front office" for government business.
What Red Tories and most Liberal Democrats have in common is a concern with what used, in Victorian and Edwardian Days, to be called the Condition of England. We are not Socialists, but neither are do we wish to see free-market ideas imposed regardless of their consequences.

If government policy is damaging the Condition of England (and of Scotland and Wales), then Red Tories and good Liberal Democrats should say so and oppose it.


Jane said...

My friend who is a post-mistress in a village in the Staffordshire Moorlands, is also a very good cook. In December she gives every customer a free home-made mince pie. They won't get that at a petrol station.

dreamingspire said...

Post Offices also cash cheques issued by Credit Unions from their Savings Accounts or by way of loans. The CU gives the account holder a cheque and they cash it at the Post Office. (For those who have not caught up, CU legislation changed a few years ago, creating a new class of regulated CUs, each covering quite a wide geographical area. And CUs have linked with banks to offer Basic Bank Accounts through the CUs. The legislation is changing again, giving CUs a straightforward way to offer affinity accounts for such as clubs and Neighbourhood Watch groups - Building Societies used to do that, but I don't know of one such within reach so our NW is using the current provision by which an existing CU a/c holder can open an additional a/c with multiple signatories.)

Edward Davey said...

The decision to award this contract was taken by the Department of Work and Pensions after a tender process started by the last Government.
What has gone unreported is this:
a)people can still switch from these giros and choose to collect their money at Post Offices, using a POCA or basic bank account;
b)the DWP press release is very positive about the DWP's future relationship with the Post Office under this Government, citing new pilots in relation to new services like Pension Credit form processing and national insurance number applications PLUS, on credit unions:

"a new £73 million fund to help the modernisation and growth of Credit Unions so they can more effectively help those people who are financially excluded by giving them access to affordable bank and savings accounts and other financial services that meet their needs.

Ministers expect the Post Office network to play a central role in enabling Credit Unions to reach more families. We would like to see people accessing Credit Union accounts across Post Office counters as well as credit union branches.

In linking with Credit Unions the Post Office would be providing access to full transactional banking, weekly and fortnightly bill payments, savings, and low cost credit services to financially excluded people who currently have limited or no access to these services and who are often forced into the hands of loan sharks."

...something Steve Webb and I have been working on with Coalition partners for several months....

By the way, the full policy on Post Offices is worth reading:

I am leading a huge amount of work across Whitehall and with local authorities to reverse the trend of taking away government services from the Post Office.

Coupled with the credit union work, our success in helping to persuade RBS/NatWest to allow its customers to access their bank accounts via their local Post Office is a sign of our commitment to financial services across the PO network. Let's hope HSBC and Santander follow the lead of RBS, now that all the customers of their competitors - nearly 80% of bank current accounts - can access their accounts at the local PO!

Jonathan Calder said...


Thanks for this. Perhaps the moral is not to believe all you read in the Guardian?