I am delighted to be here this morning, and to reaffirm the commitment
of this Government to the future of our nationwide network of post
offices. There are many people who are dependent on the Post Office
network, who really could not manage without it. And we are committed to
ensuring that the network can continue to serve communities in every
part of the country as it does today. And we are delivering the
commitment that people can still get their benefit in cash without
charge at the Post Office. So for that reason we have committed half a
billion pounds, in an unprecedented Government investment, to equip
every post office in the country for the universal banking services
launched this week. It means that every post office in the country can,
from this week, say "Do your banking at the Post Office". And
Post Office Ltd has the technology platform to offer a host of new
services, which can win a new generation of customers for the Post
Office. Somebody asked what the Government was doing as shareholder, the
answer is we've made this huge investment.
In the past, the network of post offices and sub post offices has
been heavily dependent on people coming in each week to cash their giros.
But that business has been dwindling. Increasingly, people who retire
have used a bank account to have their wages paid into and choose to
have their pension paid in the same way too. The services they want are
different from the services demanded by pensioners of a generation ago.
And so, this is where I disagree with some of what's been said today.
The Post Office has to change too, to deliver services, which will
attract today's customers. If like the last Government we just sat back
and watched the decline that would have been catastrophic. Instead we
have made this half a billion pound investment which safeguards the old
services and opens up the prospect of a whole raft of new services to
secure a successful network for the future.
Over the next two years, the Government departments that pay benefits
and tax credits will be contacting all their customers about having
their benefit paid into an account. They can choose any one of three
types of account: an ordinary current account; one of the new basic bank
accounts or the Post Office Card Account that has been introduced this
week.
The card account is a very simple form of account which can only have
benefit payments made into it, and no other payments, and which can be
accessed only with a card and a PIN number at a post office. Every post
office in the country has a PIN pad on the counter. You won't be able to
set up direct debits or anything like that, so it will be impossible to
overdraw, and it will be a very simple, problem-free arrangement. And
for many people it will be the right choice.
Some have said and its been hinted today that supporters of the Post
Office should be pushing people towards the Post Office Card Account.
That would be a terrible mistake. The Post Office needs to aim at a
large market, not just a small and shrinking one. I met a group of sub
postmasters in the constituency of my colleague David Stewart in
Inverness yesterday. They hit the nail on the head, the real opportunity
for the Post Office looking forward is offering access to bank accounts.
Because that is a service which everybody in the country will use and
which will allow the Post Office to expand its base of customers, rather
than locking it into the dwindling group of customers who only ever want
to draw cash. Being locked in only to that shrinking group is the heart
of the Post Office's problem. The Post Office has to break new ground
and win customers who use bank accounts. And now, thanks to Universal
Banking Services, we have put it in a position to do so and to capture
new and growing markets, instead of just declining ones.
With the basic bank accounts, every high street bank in the country,
plus Nationwide Building Society, will be offering an account, which is
fully accessible at any local post office. That is what we mean by
universal banking and that is what our investment of half a billion
pounds has provided. So if you live in the countryside with no bank
branch for miles you can do your banking at the village post office. Or
if you live on an inner city estate near a parade of shops, you can do
your banking at the post office on the parade rather than going all the
way up to the High Street. For a number of banks now, that service is
available not just for basic bank accounts but for ordinary current
accounts too, and the Post Office is aiming to reach similar agreements
with other high street banks too. So the Post Office can achieve a new
role as the handiest place to do your banking.
I have one of the bank accounts, which I can access at the Post
Office, and I find that very useful. But it will also be a great
opportunity for the more than three million people who do not have a
bank account. One of the sub post masters I met yesterday who runs a
branch in a rural community with a large council estate, made the point
to me and rightly, that life is very hard if you don't have a bank
account. Those people will be able to open a basic bank account, and
then access their account at the local post office. The post office now
has the answer, "banking on you" is a great slogan. So
universal banking can go a long way in reducing the scale of financial
exclusion that is all too common today.
So universal banking is a huge opportunity for our network of post
offices. In addition, we have made the commitment that there should be
no avoidable closures of rural post offices, and we have provided the
funding to make that commitment a reality at least until 2006. As a
result, we have seen a very sharp fall in the number of rural post
office closures. Numbers have been falling for twenty years or more, but
in the last quarter of last year, the most recent period for which we
have the data, the net reduction in the number of rural post offices was
zero, for the first time anyone can remember.
The position in urban areas is different, and we have recognised that
there are now in many urban areas, too many post offices for the volume
of business, people want to do at them. Quite a number of sub
postmasters have indicated that they would like to receive a fair sum in
compensation and close their branches down. So the Post Office is taking
forward a carefully planned programme of closures over the next three
years, making sure that in every case there are acceptable alternatives
available and ensuring also that, at the end of the process, at least
95% of urban residents will be within a mile of their nearest post
office, we've included extra safeguards for the disadvantaged areas that
Nicky rightly mentioned.
So, as a result of the Government's investment, we are entering a
period of great change for the Post Office, and of great opportunity. We
are determined to make a success of it. I hope that this new message,
"Do your banking at the Post Office", hits its target.
As the CWU leaflet says, "Your local Post Office can now provide
you with more services than ever before". It's a great pitch and we
are determined to make a success of it. Let's work together to make sure
of it.
Thank you.
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