Mandelson sees new role for "reassuring" Post Office

Tuesday 11th November 2008

A leaked letter has revealed the government may be reconsidering its plans for the Post Office.

Post office closures up and down the country have been forced through despite widespread local political opposition in the last few months.

Now, however, business secretary Lord Mandelson has signalled in a leaked letter to prime minister Gordon Brown that the economic downturn and impending recession may provide a new opportunity for the service.

The letter, dated October 30th and obtained by the Guardian newspaper, says: "We should examine the prospects for POL [Post Office Ltd] becoming a much more significant player in financial services - offering a wider range of attractive products within easy reach of the whole population, available from an institution they can trust."

Lord Mandelson tells the prime minister that the "trusted" brand and its "direct physical contact" with the 24 million people who visit a post office each week are its "two real strengths".

The government is due to announce whether it will award the contract for the post office card account (Poca) to a private firm.

In the current economic climate Lord Mandelson's thinking may be moving away from this option.

He adds: "As recent figures show, many savers have demonstrated their trust in the Post Office by moving their savings into accounts it offers.

"Similarly, the face-to-face contact which a post office offers is becoming an increasingly important and reassuring factor for many people - especially when many private companies, as well as many government agencies, are seeking to reduce their own face-to-face contact points."

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