The Minister for Public Enterprise has called on commercial banks to provide a subvention for post offices that will provide services in rural Ireland when bank branches close. Mary O'Rourke said that banks could afford to make a contribution because they are making large profits and are guaranteed to make further gains from reduced corporation tax. A new report published today suggested that An Post could face losses of over £80m by 2004.
Next week An Post and the commercial banks are due to announce a deal that will involve a new role for post offices as the banks close some of their branches. The agreement will outline how, in the future, post offices will provide a variety of services currently carried out by banks, such as bill paying and over the counter transactions. For this new arrangement, the post offices will be paid on a fee per transaction basis by the banks. But now, in a development that is sure to cause controversy, the Minister for Public Enterprise has called on the banks to pay a lot more.
According to Mary O'Rourke, in many cases the banks are pulling out of rural Ireland. She claims that the banks had made profits over many years thanks to customers from rural areas. Therefore, she has called on the banks to give a subvention for the upkeep of rural post offices, which will fill the void when the bank branches close. The Minister indicated the banks should have no difficulty affording the subvention because they are currently making billions of pounds annually in profits and will further benefit from the Government's cuts in corporation tax.
The Government cannot compel the banks to follow this recommendation. But the Minister's suggestion reportedly received enthusiastic support at a Cabinet meeting yesterday. The Government will now try to exert moral pressure on the banks.
