Memorandum submitted by Richard Heller
I understand that your Committee is conducting
an inquiry into the possibility of creating or restoring a Post
Office Bank. I am writing to suggest two facilities which such
a Bank might offer.
The first is a good neighbour account, which
would guarantee that all deposited funds would be invested exclusively
in the depositor's home town or region, in local businesses or
in local people. Depositors would not of course be able to track
the destination of their individual funds. But they would know
that everything in the account was invested locally, ethically
and comprehensibly. They would be providing jobs, mortgages, business
expansion for their neighbours—and no funds in financial
dog meat!
In the present climate of suspicion and hostility
towards high finance and its practitioners I believe that such
an account would be very attractive to many people and powerfully
reinforce the branding and market position of a Post Office bank.
It could also attract the accounts of many local authorities.
I believe that these gains would more than compensate the bank
for any extra book-keeping costs.
Within this context, a Post Office bank might
adopt a connected proposal which I have put separately to the
Work and Pensions Secretary: anti-poverty loans. These would be
small personal loans to people who plan their individual pathway
out of poverty, applying in this country the lessons of successful
micro loans in the developing world. Just as the causes of poverty
very widely, so do the remedies. This scheme would reflect this
and invite people to consider what specific actions would do most
to transform their lives and expectations. For some it might be
getting out of debt, for others education or training, for others
accommodation, for others medical treatment, for others childcare,
for still others personal transport or communications—or
any combination of these. When people had taken stock of their
prospects in this way, they would set out their application in
the form of a personal plan to escape their current circumstances.
This could be countersigned by say, a social worker or doctor
or probation officer, and the bank would decide to give the loan
accordingly. I think that such micro loans would be profitable
(the repayment rates in developing countries are very good), but
to make them more attractive still, the government could guarantee
them, in whole or in part. (Since people do not like to admit
that they are in poverty, I have suggested to the minister that
they should be called "transformer" loans.)
Such a facility could jump-start many people
out of poverty and again I think that it would reinforce a Post
Office bank's branding and reputation if it decided to pilot them.
I hope that these suggestions might be of interest
to your Committee.
One other trivial point. Could your Committee
use its influence to abolish the unwieldy name of the ministry
which it shadows? This name is a fatuous attempt at branding which
achieves nothing except to cause inconvenience for its correspondents.
February 2009
| 
