UK GOVERNMENT OVERSEEING ‘MANAGED DECLINE’ OF POST OFFICE SAYS MP
The SNP’s Small Business spokesperson, Marion Fellows MP, has welcomed a new report from Cass Business School that says a state-owned UK Post Bank would ensure the long-term sustainability of the Post Office and benefit SMEs through lending.
The report recommends that the partnership with the Bank of Ireland UK (Plc), who currently manages the Post Office’s banking services, should be ended as the business is still dealing with the fallout from the financial crisis and would tie the Post Bank’s success to that of Bank of Ireland.
Diversifying the Post Office’s portfolio by lending and widening access to financial services to SMEs, the report claims, would increase revenue into the Post Office and ensure its long-term sustainability. The UK Government is currently privatising larger ‘Crown’ branches with 37 out to tender.
The report recommends that £2billion of initial equity, the sum of what the UK Government has invested in the Post Office in the past seven years, would be needed to acquire the Bank of Ireland’s portfolio and would generate enough profits to make the Post Bank self-sustainable.
Commenting, Mrs Fellows said:
“A clear and viable strategy has been laid out to strengthen the Post Office which would benefit SMEs and communities in the process. The UK Government must listen and take action.
“Rather than taking steps to support the Post Office, the UK Government is undertaking an exercise in managed decline. However, this doesn’t have to be the case. There are examples of successful post offices in France and Italy with Post Banks which boost their revenues and purpose.
“So many SMEs struggle to get access to lending due to a lack of competition in lending services. SMEs could benefit greatly and therefore communities and high streets. The Post Office already has a trusted brand and network of branches across the country that could be utilised to grow into the banking sector. This would also be beneficial to individuals who don’t use mainstream banks or have access to them in their locality.
“However, if the UK Government follows through with its disastrous plans to privatise and franchise 37 Crown branches, including a local branch in Motherwell, this would result in a drop in expertise and services making this rescue plan near impossible.
“The Post Office is a valued public asset and the public wants to see the UK Government act to ensure its future and success.”