Labour unveils Post Office Bank

29th Mar 2010 11:50

Low paid workers will be encouraged to save by receiving a 50p bonus for every pound they put into their accounts, under plans for a new 'Post Office Bank' unveiled by the government today.The new bank, expected be a key part of Labour's forthcoming election campaign, will be run through the Post Office branch network. As well as new Saving Gateway account, the new bank will offer an expanded range of other accounts and enable customers to access accounts at Royal Bank of Scotland and Santander.Business account holders with Santander will also be able to use the branches to access their accounts. The new Post Office Bank will also offer 90% loan-to-value ratio mortgages.The government has attracted fierce criticism in recent years for a policy of closing Post Office branches with the number nationwide down from 19,000 to 11,500.Business Secretary Peter Mandelson today said the announcement today is a stage in its reinventing of the financial system piece by piece."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."The new proposal is also a throwback to the now defunct Girobank, which was set up as 'the people's bank' by Harold Wilson when he was prime minister more than thirty years ago.