Examination of Witnesses (Question Numbers
280-299)
CWU, UNITE
21 APRIL 2009
Q280 Chairman: It is the best one
I have seen, frankly.
Mr Furey: I think that, if there
is going to be an innovative approach, if there really is a will
to really want Post Office Limited to be successful from central
and local government, then I think that there is a lot that can
be done. I think, with any of these things, that it is about potentially
trialling these, piloting these and seeing if they are feasible,
but where I would point to the expertise is in the passport check-and-send
service, and that is so significant in terms of money, time and
anguish to the public at large. The counter clerks have got the
expertise to check the passport applications properly to make
sure that they are filled in correctly and that there is all the
necessary documentation to support them and then, once those forms
are checked and sent off direct to the Passport Agency, the provision
of passports is much quicker to the public at large. If we can
deal with that nature of work, then there might be similar-type
work that we can do. I am not suggesting that sub-post offices
issue visas, but they might be able to check an application form
to make sure that everything that needs to accompany that application
form is there rather than it being sent off and the necessary
authorities sending it back, saying, "You haven't provided
us with such and such". I think there are degrees of work
that could be done to support part of a process and these need
to be looked at. I think what the CWU and Unite are saying is
that we should have an open mind as to what can be done.
Chairman: I should make it clear that
the sub-postmistress in Upton Snodsbury is an excellent lady,
she is first-class. The Home Office is very inconsistent on passports,
I think, in that it is only with a certain number of offices.
A large number of offices do not even get passport application
forms, you cannot even get a form at a large proportion of the
sub-post office network, so the Home Office needs to do some thinking
about that very carefully. Let us move on to banking.
Q281 Mr Clapham: Both of the unions
are part of the Post Bank Coalition, which I think is a great
idea. We are talking in terms of using the Post Office network,
12,500 plus 500, to provide banking services, but one of the things
that is crucial is the area that the bank would operate in, and
already we see that we have got, for example, the credit unions
working in that area. What are the potential linkages between
the Post Bank Coalition concept and, for example, the credit unions?
Mr Furey: I should say, first
and foremost, that we see a Post Bank being operated on a commercial
basis, and it is not just about the three to four million people
in society that are "unbanked", it is about the provision
of a range of products. The main argument for the establishment
of a Post Bank would be that it would, in turn, generate profits
for reinvestment back into the Post Office network, as a whole,
and it would actually help to ensure the long-term sustainability.
In terms of linkages, yes, I think it is absolutely essential
that credit unions form part of the future of that. We are not
proposing anything that is new. Post banks of various degrees
have operated on the Continent for many years and are very, very
successful and do ensure that the post offices or the equivalent
of Royal Mail in the continental countries are successful, and
the German example and the French example are there to be seen.
I think our view on the Post Bank is that we need to look at National
Savings & Investments, we need to look at credit unions and
to have an approach that looks at all the different component
parts. Interestingly, Tesco's have announced the day that they
are looking to establish a current account. Now, if Tesco's can
do that, I do not see any reason why Post Office Limited cannot
do that through a state-run Post Bank.
Q282 Mr Clapham: So you would see
the actual concept as being operated commercially and you would
expect at some time that it would be making a profit for the organisation?
Mr Furey: Absolutely. At its peak,
Girobank was the sixth-biggest bank in the UK, and it was making
money to generate for the Royal Mail Group as well, so I am not
saying that we have an identical arrangement to Girobank, but
there is proof and evidence there that a bank via the Post Office
has, in the past, been successful and certainly, as I said, there
are continental models. Wider afield, in Japan, the vast majority
of bank accounts held by the Japanese population are run through
the Japanese Post Office rather than all the commercial banks,
so there are significant models there to prove that it can be
successful, and we must not lose sight of the fact that 24 million
people per week transact business via the Post Office, so there
is a great opportunity there and I think that the time is right
for this proposal.
Mr Scott: I would only say that
in terms of credit unions, it would be working with credit unions
locally, not in competition with them, and supporting those activities
at the local level and, at the point where the Post Bank was covering
its costs and making a contribution, a profit, some of that profit
could be invested back into local communities also to support
activities at the local level and helping to support credit unions
being started up.
Q283 Mr Clapham: But your proposals
are sort of aimed at the people who are financially excluded,
on low incomes, et cetera. What research is there to suggest
that there is a demand for the Coalition's Post Bank at a time
when we see the POCA card provided for that group of people? Does
the evidence show that there is a demand?
Mr Scott: Well, the POCA card
could be part of it of course. It would sort of merge into the
Post Bank activity. There are still three or four million adults
without bank accounts in the country and they are probably the
group of adults who end up paying the most for their electricity
and gas because they have not got a bank account and cannot do
Direct Debit payments and have to pay through the key or the card
and they are paying the most expensive tariff. I think it is that
sort of audience, but it is also wider and actually anybody could
open up a Post Bank account or accounts and use them, and it would
not have any toxic assets, it would not be looking to take any
risky deals. We have still got a bit of work to do in terms of
more details of the Post Bank. The Chairman will accuse us in
a moment of being a bit light on substance in our submission,
and that is something we are currently putting our minds to—
Q284 Chairman: Good, I am sure you
are. I was always confident of that.
Mr Scott:— giving a bit
more detail of how it would actually work, without trying to set
up a bank ourselves, but of how it would work. It would be offering
up services to the communities and using the facilities, services
and the products that already exist, but bringing them into being
provided through the Post Bank.
Mr Furey: It is not just aimed
at the "unbanked", but there are thousands of small
businesses up and down the country which could avail themselves
of the facilities of operating via a Post Bank, and not least
of all could be the support and provision of paying wages to their
staff because, as I understand it, and I am not a small businessperson,
a headache for small businesses is the weekly wages for their
staff, transacting that business, drawing the cash potentially
if they are paid in cash, so I think there are great opportunities
for all parts of society via a Post Bank.
Q285 Mr Clapham: So you would see
the Post Bank actually sort of providing for most people's needs,
for example, in the rural community we are talking in terms of
small businesses, and the opportunity of people being able to
obtain cash or put in cheques, et cetera, so you would
see it generally providing, as we are saying, for most people's
needs, not just a targeted group?
Mr Furey: Absolutely. The POCA
in itself, and we are delighted that the Government saw sense
and awarded POCA again to Post Office Limited and we thank this
Committee for its involvement in that decision-making, but the
POCA only goes so far because at the moment it is only designed
for people who are drawing benefits of various natures, pensioners,
those with a disability, et cetera, but it is limited in
that you cannot do a Direct Debit from it. We are not putting
all of our eggs in one basket behind POCA, we are looking for
something that is significantly different and can appeal to society
in general, all parts of society because, not least of all, there
are 12,000 outlets where people can access the Post Bank and do
business.
Q286 Mr Clapham: Andy, you were saying
that you see it as being a commercial venture that would actually
result in a profit for POL, but what about the sub-postmaster
or sub-postmistress? Would it provide, for example, an opportunity
for them? Would there be profit for the sub-postmaster?
Mr Furey: Undoubtedly. Whilst
we believe society needs something like a Post Bank, we must not
lose sight of the fact that any revenue that the Post Bank generates,
and it would have to be incremental over time, it is not going
to happen overnight, that that revenue is used for the greater
good of sustaining the Post Office network as a whole. We do not
want to go through further closure programmes like we have seen
on two or three occasions in the last 10 years when something
like 2,500 post offices closed over the course of 18 months/two
years. We want to ensure that the sub-post offices are viable.
I genuinely believe that many of the rurals will never be able
to wash their face or stand alone without government support and
subsidy or, I think another way of putting it probably, without
the Government paying for the services that they provide. Overall,
if we can establish a successful Post Bank, and, as I say, it
is not going to be like a light switch which you can start up
overnight and expect it to make a living overnight, but in time
we would see that the profit that was generated could be used
for reinvestment rather than, and it might be a cheap shot, going
to big bonuses for executives and shareholders, et cetera.
If it is state-owned, government-owned, and it is for the good
of the people, then any money that it would make, and clearly
it would have to be run on a commercial because the purpose of
it making money would be to ensure the long-term sustainability
of postal services via post offices across the UK, it would help
the sub-postmasters no end.
Q287 Mr Clapham: So we are talking
about the establishment of the bank over a period of time, but
there is clearly the need for the input of capital and training.
Who do you see being responsible for the initial capital input
and training?
Mr Furey: Well, many of our members
at the moment are selling a lot of financial services products
and they are not FSA-accredited yet, but certainly in time we
would have an aspiration that they would be accredited, and we
are pleased that the commercial arrangement with the Bank of Ireland
is just about to roll out mortgages across the crown office network
in the coming months. That is fine to a point, but we wish to
see the ability for people, particularly young people, to be able
to come and get mortgages via the State, so training, there would
certainly have to be further and better training. I believe that
the Post Office employees, our members, have got the inherent
skills and the ability, but certainly training is a vital part
of that. Our view would be that there needs to be support from
the Government for that. After all, the Government have supported
many of the high street banks to the tune of billions of pounds
in the last year, so I would have thought they could find some
money to support the development, the establishment and the infrastructure
of a Post Bank, including training. I think this is all about
the political will at the end of the day and I think that, if
there is the political will, and I should say that we are very
grateful to the 157 MPs who have signed EDM1083 in supporting
the establishment of the Post Bank Coalition, and 157 in a short
space of time is quite impressive, so I think there is certainly
a will within the Palace of Westminster for it to happen and hopefully
the Government and Cabinet will listen to the MPs who have signed
that EDM because I think that, if there is the will, then it can
happen, but that will need government support in establishing
it, including the training.
Q288 Mr Clapham: Of course, you would
have to persuade POL that it is going to be a better venture than
the one that they are in at the present time with the Bank of
Ireland.
Mr Furey: Yes. I think that, in
the absence of a Post Bank, we would want to see the relationship
with the Bank of Ireland grow and build and more services being
offered, but we do not see that as necessarily the way forward.
We see a state-run Post Bank as the much better option rather
than a commercial arrangement with the Bank of Ireland and, we
need to be clear, the Bank of Ireland have got that commercial
arrangement because profits from those sales, or parts of the
profits, are going back into the Bank of Ireland. The Bank of
Ireland have not got that arrangement with Post Office Limited
because of their character, they are doing it for very sound commercial
reasons and a chunk of the profits is going back to the Bank of
Ireland. If there were a Post Bank, it would not go to anybody
else, no other commercial organisation or company. If there were
profits from a Post Bank, it would go back into Post Office Limited
for the long-term sustainability of the network.
Chairman: There are lots of things that
we could talk about today and we did take the full hour in the
end, contrary to my expectations.. So as not to go on to the next
witnesses' time, we must draw stumps there. I have asked you to
flesh out the list a little bit perhaps, if you would care to
do that, and do not give us anything else we have not asked you
for specifically, but, as always, if there is something you want
to tell us in writing subsequently as a result of this session,
we would love to hear from you. Thank you very much indeed.
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