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Banking Bill

We on these Benches support the amendment as well. I pay tribute to the noble Lord, Lord Clarke of Hampstead, who as a former postman knows what he is talking about. We are very concerned about the present banking arrangements of the Post Office, specifically its arrangement with the Bank of Ireland. A few weeks ago I warned in this Chamber about the very shaky state of the Irish banks. I particularly had in mind Anglo Irish Bank, which I knew from my experience in the property market had been involved in some utterly wild lending in this country. Since then Anglo Irish Bank has had to be nationalised, and it was also discovered that its chief executive had his hand in the till—I think it is fair to say it that way—for more than £100 million. I warn noble Lords that the other two Irish banks and the Bank of Ireland, which is the partner for the Post Office and its banking services, are also in a very grave state. Not many people who have deposits in the Post Office know that they are not covered by the Financial Services Compensation Scheme in this country. They are relying entirely on a guarantee from the Irish Government which runs out at the end of September 2010. We saw the risk of relying on guarantees from small foreign countries in the case of Iceland, and I have serious concerns about the position of Ireland. In these very troubled times it is not appropriate for British depositors who have their money in the Post Office to rely—though many do not know it, as it is not made clear on the website—on an Irish Government guarantee. I reiterate the warning that I gave a few weeks ago. I ask the Minister and the noble Lord, Lord Mandelson, to face up to this problem and to make sure that we now get a stronger and more stable long-term partner for the British Post Office in its banking operations. The suggestion was made from the Benches opposite that a mutual such as the new Britannia/Co-operative, the Nationwide Building Society or one of the substantial, now mainly nationalised, British banks would be appropriate. Things are now too serious for depositors in the British Post Office to be relying, perhaps without being aware of it, on a guarantee from a small and shaky country. That is the real message of this amendment, and we should deal with it rapidly. If noble Lords press this amendment now or on Report, we would support it.