The government nationalised the ailing bank, formerly a building society, but only after many months of foot-dragging. And only on a temporary basis, natch.
Word is, Northern Rock could be sold to Tesco, handing the supermarket even greater power in the economy. Given that a majority of shareholders voted against plans to improve workers’ rights at the company, we know that Tesco isn’t very socially-responsible – so why give them a stake in the banking sector?
There’s a better alternative, as Louise Nousratpour reports:
A coalition of unions and businesses will step up their campaign for a “post bank” tomorrow with proposals that government-owned Northern Rock be used to offer services via post offices.
The group will publish plans arguing that their proposal would give a boost to the Post Office network and provide a vital community service.
A Post Bank would “revive and protect” post offices, support local communities and help smaller firms, especially as the banking system was still in “disarray,” they argue.
The report Delivering the post bank outlines four options the government could follow to establish the post bank. These range from using Northern Rock as a foundation for a mutually structured people’s bank to buying out the current relationship between the Post Office and Bank of Ireland.
Support for the idea of a post bank is growing within all three main political parties as well as among a range of campaign groups.
Postal workers union CWU leader Billy Hayes urged Business Secretary Lord Mandelson, who has been pushing for the part-privatisation of Royal Mail, to endorse this “vote-winning” initiative.
“We have met the challenge to create a workable model for the creation of a post bank,” he said.
“Our new report builds upon the conceptual idea and provides practical blueprints that will appeal to the general public who are disillusioned with the old, tired banking model.”
Federation of Small Businesses chairman John Wright said: “Northern Rock presents the government with a considerable opportunity and it should not consider selling it off privately, but instead should use it to establish a post bank and invest in the long-term future of the Post Office.”
Finance union Unite national officer Paul Reuter argued that the ambition should be to “secure the future of the workers in Northern Rock as well as securing the Post Office network while, at the same time, resolving the problem of financial exclusion and meeting the needs of small businesses.”
Dot Gibson of the National Pensioners Convention added: “Ministers need to rise to the challenge and secure a future for the post office network that serves local communities rather than pander to those who want to run it down and sell it off.”