Banking on Post Office
Taxpayer hit by branches axe
TAXPAYERS are “effectively subsidising” the closure of bank branches, it was claimed yesterday.
Bank bosses have tried to justify the mass cull by claiming customers can use their local Post Office to carry out basic transactions instead.
The Post Office processed 130 million of these last year which involved cash withdrawals and deposits.
But MPs heard yesterday how it actually loses money as a result, partly because of the cost of handling cash.
Nicky Morgan, chairwoman of the Commons Treasury Committee, questioned whether the Government is “effectively subsidising banks” by “having to put more money into the Post Office”.
She said: “Where banks close branches, they are relying on others to take up the slack, whether it be the Post Office or relying on customers to find ways to get to other branches.”
Martin Kearsley, banking director at the Post Office, confirmed it was “not currently” making money from its arrangement with banks. He added: “We are working with all banks to make sure they pay for the service that their customers use so it is sustainable for us in the long term.”
Robin Bulloch, managing director for community banks at Lloyds Bank and Bank of Scotland, said it had closed 23% of its branches.
He added that the group, saved by the taxpayer in the banking crisis, was committed to have 21% of all the branches that remain across the UK.
According to Which?, nearly two-thirds of bank and building society branches have shut in the past 30 years, leaving just 7,586 in total. A fifth of households have to travel nearly two miles to one.
The Post Office has 11,500 branches.
Kearsley said it would cost the Government “billions” of pounds in investment to allow the Post Office to provide a full banking service.