Post Office counters slump via bank plan

The Government will today announce a "major expansion" of financial services offered by the Post Office under moves aimed at making the 11,500-strong branch network more sustainable.

Launching the development today, Business Secretary Lord Mandelson said the new measures including new accounts and business services had previously been likened to creating a Post Office Bank.

A coalition of groups including the Communication Workers Union, Federation of Small Businesses and National Pensioners Convention have been pressing ministers to support a Post Office Bank.

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Lord Mandelson said today's announcement will be a core part of Labour's election manifesto. "Since the global banking crisis we have set about reinventing the financial services industry piece-by-piece, building a system that is fairer, trusted and more responsible.

"Today is the next step in that process. The Post Office is a well-loved community institution and this move will bring more banking services back to the heart of those communities."

Business Minister Pat McFadden will say: "The Post Office can provide a range of good value, simple financial products for everyone. These are the clear messages that people have given us and we are acting on them – a major step towards making the Post Office a sustainable neighbourhood banking service."

Ministers said the measures announced today marked a "step change" in banking at the Post Office and demonstrated the Government's continuing commitment to the Post Office network.

They include a weekly budgeting account to help people on low incomes manage their household budgets and save money by taking advantage of discounts for using direct debit to pay their utility bills; a children's savings account to be launched in the next 12 months, and a Post Office Current Account, which will be accessible from any Post Office in the country.

Negotiations are taking place with RBS and Santander to give access to their current accounts.