Post Office held to account

Post Office held to account
From THE TIMES, May 9th, 2001

Caroline Merrell Banking Correspondent THE plans for a Post Office bank account aimed at nearly four million
people on social security benefits fail to meet the Government’s own
performance benchmarks for bank current accounts. Stephen Byers, the Trade and Industry Secretary, finally unveiled
plans for the Post Office’s Universal Banking Services yesterday with backing
of Pounds 140 million from 11 of the UK’s biggest banks. He said: “This is a major step forward both in ensuring the future of
the Post Office network and in tackling financial exclusion. “Universal Banking Services will bring those people currently without
bank accounts into the financial mainstream.” The Post Office service is expected to be launched in 2003, when
social security payments are to be electronically administered through the
banking system, which threatens to cut Post Office revenues by about Pounds
400 million, or one third of its current revenue. Universal Banking Services will comprise basic accounts from the 11
banks and will also offer the Post Office’s own Clear Account, as about four
million of the 16 million on benefits do not have bank accounts. However, some of the banks pointed out yesterday that the Government
had insisted that their basic accounts offered access through cash machines
and allowed customers to pay direct debits. The Post Office’s own Clear Account does not offer access through
cash machines and does not allow direct debits. “It is total hypocrisy,” said
one. The plans for Universal Banking Services have also drawn fire from
consumer groups such as the National Consumer Council, which believes that the
services are nothing more than a subsidy of the Post Office by the private
sector. In March the 150-year-old Post Office changed its name to Consignia
as it took on the structure of a public limited company. Commentary, page 27 (c) Times Newspapers Ltd, 2001THE TIMES, 09th May 2001