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A coalition of unions, small businesses, charities and pressure groups begin a campaign today for a "people's bank" built on the Post Office network.
The Post Bank campaign believes the strength of the Post Office brand and its 11,500 branches should be used to create a local banking infrastructure throughout the UK. "The effect of the banking crisis means the need for a new, trusted, state-owned bank based on the Post Office network is urgent," the campaigners say.
"There is a unique opportunity to answer both concerns around secure and equitable finance and the future of the Post Office network."
In recent years the Post Office has sought to build up its position in the financial service sector through an increasing range of products - including some banking facilities in partnership with the Bank of Ireland. It has sought to use financial services to replace government business lost to online rivals and other providers.
However, there have been increasing calls for the Post Office, which has more than twice as many branches as Britain's high street banks, to operate its own bank network.
Commenting on the proposals, a Department for Business spokesman said: "The government is committed to a secure, sustainable and successful future for the Post Office network. The Post Office is a trusted institution, offering face-to-face contact in local communities.
"It could deliver more banking and financial services ... There will of course be different views about how to go about this. The Post Bank coalition's paper is a very welcome addition to this work."
The coalition - made up of the Communication Workers Union, Unite, the Federation of Small Businesses, the Public Interest Research Centre and the New Economics Foundation - argues there are significant advantages: a stronger Post Office network, accessible and dependable services, and greater financial inclusion, as well as thousands of new jobs. "Deposits made through the Post Office Bank could play a vital role in reconnecting the banking system with the productive economy," the coalition said.
Post Office Ltd, which runs the Post Office network, is part of Royal Mail. The government is looking at the sale of a strategic stake in much of Royal Mail to an outside operator, though the Post Office part of the business would not be included.
Billy Hayes, CWU general secretary, said: "The Post Bank is the right proposal at the right time, politically and industrially. It answers the needs of the financially excluded and will appeal to many in this time of economic uncertainty."
John Wright, of the Federation of Small Businesses, said: "Small businesses are completely reliant on the Post Office network, with 80% passing their letters and parcels through the Post Office and 47% visiting a post office a couple of times each week. Establishing Post Bank would not only retain jobs but could also, we estimate, create 11,000 new jobs."
Frank Cooper, of the National Pensioners Convention, said: "Pensioners have lost faith in the financial sector and the launch of a new people's bank at the Post Office will offer some much-needed security."
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