Post offices should be an alternative to banks?
The post office is increasingly diversifying in order to be able to keep its loss making branches open. It is now beginning to offer more banking style services such as mortgages for first time buyers, cheap loans and savings accounts. Should the post office be moving away from just shifting our mail around?
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We do not want our post offices to be part privatised
When the idea first came around of 30% of the Post Office being sold to the private sector many were outraged. The question was hotly debated [[http://debatewise.org/debates/701-if-banks-need-to-be-nationalised-should-the-post-office-really-be-privatised]]. Here many points arose, such as the fear of the loss of a British institution, loss of sense of community and loss of access for many people who live in rural areas. If allowing the Post Office to undertake banking functions will save the Post Office then public opinion would seem to be – go ahead!
I do not believe that a final decision ever came to light as to whether the Post Office should be part privatised or not. Looking at the debate you cited it seems there were some very convincing reasons as to why Post Offices should be part privatised. There would be more competition, and therefore prices would lower. Then the Government could keep hold of the unprofitable areas in order to ensure they get the same service as was always provided (otherwise profit making companies would leave out the unprofitable areas and they would get no post). With all this benefit, I find it rather unsavoury to state that we do not want to Post Offices to become privatised to any extent.
We want to keep our Post Offices open.
There have been 6000 Post Office closures in the last 13 years of Labour rule. This has resulted in loss of jobs, loss of access and loss of community spirit centring around the Post Office. The Government cannot keep funding an institution however that people do not use. Therefore the Post Office needs to be given a more fitting role than just physical post. If banking is the way forward then this should be rejoiced as a grand idea to keep jobs and maintain community spirit.
This is a rather ridiculous statement to make. We are not using our Post Offices. Therefore the Government need to think of a way to keep Post Offices open; because we want them open. Why do we want to keep Post Offices open when we admit to not using them? It seems we only want the Post Office as a national relic. But the expense in changing around the role of the Post Office is not justified solely to keep a national relic!
The weekly account is beneficial to those on low incomes
In spending £30million more on the post office Labour are planning on introducing a new weekly current account. Currently, those who get paid weekly, typically people who have low incomes, cannot set up direct debits through their bank account because they do not earn a monthly wage. The new plan is for the Post Office to allow direct debits in such circumstances so long as the owner promises to apply a certain amount of their wages to a bill fund. This will make the Post Office more functional and I will also aid those on low incomes. Research by Financial Inclusion has indicated that this will save people £500 - £700 a year. This is due to bills being discounted if they are paid via direct debit. This is a beneficial scheme all around.
That is if low income people who use this service ensure that there is enough credit in the account for the direct debit to be taken out. What if there isn’t? Would there be a bounce back charge? Would the Post Office cover the deficit for a fixed fee? Would interest be charged on the debt if this were the case? All these details are vital and they seem to have been omitted from the public. So many more details need to be released before we can assert that using Post Offices as banks in this regard is a good idea.
It is preferable to telephone banking.
Post offices up and down the country serve a need in places where the nearest bank or cash point is in the centre of town. The local Post Office would be a great place where people would have access to their accounts. Many people are not comfortable with the idea of telephone banking. This is especially the case among the lower incomes. These people may live in shared accommodation and are afraid that someone could overhear their personal information. People are generally distrustful of giving details over the phone to people they cannot see. Another difficulty is for the elderly who may have hearing difficulties. Additionally, banking telephone numbers are often national numbers which are charged at national rate and when you could be on hold for most of the phone call this would immediately turn those on low incomes off.
Given that this proposal is aimed at those who are on low incomes, these negative regarding telephone banking revolve around this sector of society. Therefore, there would be a vast majority of people who would use the Post Office if it offered this service.
It is preferable to internet banking.
There is a large amount of distrust revolving around making payments online and internet banking. There are all too many cases of people having their details stolen and money being drained from bank accounts. People on low incomes are especially scared of this occurring as even if they can reclaim the money, the little they have is needed for their daily life. Therefore, they would prefer to use the Post Office as their banking service.
In addition, those on low incomes are unlikely to have access to the internet. To have the internet they would need a telephone line and then to pay a monthly subscription for the actual internet. For those on low incomes, this is difficult to maintain. The elderly would not only be able to substantiate the cost, but they would be unlikely to want to participate in online activities. For these people then, a bank functioning Post Office would be able to satisfy the needs of their town bank to a more satisfactory standard.
Encouraging saving amongst our youth
By starting up children’s savings accounts, the Post Office would be disseminating the idea that saving is what people should do. By teaching this at a young age, we will potentially avoid a recession like we have just felt the back lash of. Currently, if a child has a savings account, they will have to go into a town in order to access it. This requires them to have an adult who maybe busy. The result is that the child could end up spending in the corner shop what they would have saved should a Post Office have offered the service to them.
Additionally, going in to town requires a day trip. This means that the child would be around shops which all try to grab children’s attention and get them to spend their money. If not on a treat, the child would spend the money on travel or fast food. This shows how a Post Office that provides banking services will help a local community who have a low income.
This would work if local Post Office branches away from the city centre were actually being kept open.
Children’s savings account will promulgate the future
Another Government scheme is to introduce a children’s savings account to the Post Office. Such easy access savings accounts will not only encourage children to save their money; it will also bind them to the idea of using the Post Office for a multitude of different purposes. They will grow up0 around the Post Office and in turn the Post Office will be able to grow up with the children, leading into a new era of Post Offices. The Post Office would be more able to adapt to the changing needs of society if it is able to grow with the children of our generation. The idea of a children’s account them is not only a quick scheme to keep the Post Office Worker Union at bay, but a truly forward looking idea that could see the Post Office once more become a pillar of society.
This is assuming that there are post offices which are in easy reach for the children and their parents. Let us not forget that many Post Offices have faced closure already. These measures would have been great 10 years ago, but now, their importance is minimal.
This is the welcomed return of Labour to its working class routes.
The move to make Post Offices cater for working class banking needs is truly a step in the right direction for Labour. It is one of their greatest ideologies and is welcomed by all socialists. Banks traditionally cater, ironically, for those who already have money. All the benefits of transactions in banks belong to those who already have money. The working classes miss out. It is for this reason that in the 1960’s many working classes who did not have a salaried wage did not have a bank account as they were not allowed by the banks. Labour then introduced Giro banking. This enabled the working classes to save their money, to manage their finances and to obtain for themselves a good standard of living. In the aftermath of a recession we need to give the working classes some hope, and Post office banking once more is the solution.
How can categorising a political party purely by class be a good thing? Back in the 50’s home policy was the majority of politics. However, we are so much more diverse now! We have so many other international issues to contend with. We cannot base who we vote for purely on the basis of class. By returning to working class roots, all Labour are doing is trying to blind sight people into voting for them. This is nothing to triumph over.
90% mortgages? Has Labour learnt anything?
The sheer idea of the Post office offering loans to any one is entirely ridiculous. They themselves are an institution in decline and need their own funds! How can they offer mortgages, let alone 90% mortgages? This must be a sign of the Labour Government not learning from our recession. The reason why banks no longer offer such loans is because it gives people who have low incomes the aspiration of buying a home when they simply cannot afford it. This is what lead to the credit crunch, and this could potentially spell the entire demolition of the Post Office as an institution.
Loans to people who banks avoid? There is a reason
The idea of the Post Office functioning as a bank is potentially a good idea in terms of free access to cash. However, to bribe people to use the Post Office by offering cheap loans to those on low incomes is an extraordinarily stupid idea. Banks have topped loaning money to these people; why? Because they have learnt that no matter how much interest you charge someone, there is no point if they have no possibility of paying the original loan back, let alone all the interest accrued! The banks have more experience in these maters and if the Post Office is going to take on banking roles, they should look to the business model of the banks.
It simply requires a different way of making loans rather than these people themselves being the problem. loans need to be given for specific investments that will provide the possibility of the money being repaid.
This action is far too late.
With 6000 Post Offices close in the last 13 years, Labour have already lowered the level of access people have to Post Offices. The Post Offices that would have been kept open were the ones that were servicing the most people. These would be in the larger areas; areas where towns were more easily accessible. This means that people who truly need better access to face to face financial services actually now have no access to a Post Office either. With this in mind, spending the extra £30 million on the existing Post Offices is pointless.
those on low income trust the Post Office
Consumer Focus, the watchdog for Post Office services has signalled that moving the postal system into banking once more will life 1 million people out of financial exclusion. The reason for this is that those of low incomes do not trust the banks. Banks have always catered for the needs of the middle classes an the hereditary effect is a lack of trust between the two camps. Banks do not wish to loan to those on low incomes or weekly wages and those on low incomes do not wish to bank with the traditional style banks. Instead, they would feel much more secure and valued by entering into financial agreements with the Post Office. This trust cannot be gained elsewhere. These people need the Post Office and the Post Office needs their custom. This is the perfect hand in hand solution.
Half of all profits will leave the Post Office anyway
These plans to apparently save the Post Office are ludicrous and a mere media spin. The Government are no proposing an all out postal bank with it’s own banking licence. Instead it is offering the mere token o banking services being provided. These services are actually being supplied by the Bank of Ireland no less! Therefore, despite the amount of British investment via tax payers’ money being ploughed into the Post Office, half of the profits will go to the Bank of Ireland. Therefore, the Post Office will have little chance of being self sufficient.
What do you think?