PETERBOROUGH LABOUR PARTY

Here is some copy of the content of a letter I sent to Lord Mandelson recently supporting the Post Office becoming a peoples savings bank;-

Dear Lord Mandelson,

How about a real post office bank again?
Most European countries still operate these, (in Italy the majority of citizens have an account in the PO).
The safe, boring image of the post office is the perfect antidote to the current revulsion against risk addicted banks.

It would help to solve the sticky political issue of post office closures, creating a revenue source and footfall.

Here's the juicy bit though. The bank could have a particular account targeted at small businesses and the self-employed. with a sort of Princes Trust subsidised or underwritten loan system. The bank could be mandated to provide boring old-fashioned loans to small businesses that the larger operators are not interested in.

Burden to the taxpayer? Nationalising risk? No more so than the current situation of subsidy/risk through the big banks, but with the added bonus that it would fund small businesses.

The net impact on the treasury could be significantly reduced by the BEST bit of the idea. The small business account could have an automatic PAYE system, to divert payment for VAT and the inland revenue, at a flat rate (% of turnover) set for that type of business. It sounds complicated but HMRC already offers flat rate VAT schemes for small businesses, eg 10% of turnover for couriers. The bank could charge
a proportional admin fee.

So many small busineses stay out of the tax system altogether (because of the administrative burden) that the increased participation could make the scheme self-financing. i.e. The PO bank will finance your business but you'll have to pay your taxes. The twin attraction of financing and allowing businesses to elegantly side-step Brown's over-complicated tax system would surely draw the punters in.

So there you go, we've solved:
1. Credit crunch as it relates to small business loans
2. Post office closures
3. Tax evasion by small businesses

This link may be of interest.  http://www.ananova.com/news/story/sm_3251449.html?menu=news