Lib Dems support 'Post Bank' for Norwich

9.50.00am GMT Thu 26th Mar 2009

At next week's full City Council meeting the Liberal Democrats will ask the council to back the idea of setting up a new People's Bank, run through the local Post Office Network in Norwich.

The "Post Bank" idea was launched last week 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 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 per cent of small firms would consider banking with a Post Bank built on the Post Office Network.

Cllr Brian Watkins, Liberal Democrat Group Leader on Norwich City Council, who will propose the motion commented: "We know that many people in the city have lost confidence in the high street banks and we know that many people are unable to access bank accounts. Post Bank would give people a safe and secure place for their money, help businesses get credit and through a "universal banking obligation" ensure all people have access to accounts."

"The Post Bank initiative would also give a welcome boost to the post office network. This Labour government and the previous Conservative one have closed large parts of the network and starved it of funding. Post Offices need to be given more investment and the commercial freedom to compete, survive and prosper."

The Post Bank, which would be established with Government funding, would offer a variety of financial services through post office branches and online for individuals and businesses, and could create up to 8,000 jobs. The idea has already been welcomed by many SubPostmasters.

The Lib Dems will call on the council to write to Charles Clarke MP and Ian Gibson MP asking them to back a Post Bank for Norwich and write to the Minister for Employment Relations and Postal Affairs Pat McFadden MP asking him to further explore the idea of a creating a Post Bank.

NOTES

1. For more information on the Post Bank alliance go to http://www.fsb.org.uk/documents/postbank/

2. The Liberal Democrats will move the following motion at next week's full council meeting (Tuesday 31st March City Hall 7:30pm)

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.