Speaking at the Labour annual conference in Brighton today, Brown said he wants the Post Office to become a national bank.
He said: “I want the Post Office to play a much bigger role, bringing banking services back to the heart of people’s communities.”
The Post Office currently offers savings accounts, savings bonds, mortgages and credit cards but Brown wants it to increase its proposition and offer all banking services and further affordable products through its 11,500 nationwide branches.
The Government says it wants to turn the Post Office into a leading player in financial services, offering a full suite of products across its network of branches.
It will be consulting to develop new banking products and services through the Post Office.
The Building Societies Association says this plan could adversely affect the mutual sector: “We already have 52 ‘people’s savings banks’ – building societies that are member-owned and providing valuable services to the communities in which they are based. Mr Brown will need to make sure his proposals for the Post Office do not unfairly penalise building societies and undermine their valuable contribution. We look forward to seeing the full detail of these plans.”
Brown also pledged to create a law whereby bankers will be penalised for over-excessive remuneration. He said: “Markets need morals. So we will pass a new law to intervene on bankers’ bonuses whenever they put the economy at risk. And any director of any of our banks who is negligent will be disqualified from holding any such post.”
The Prime Minister also set out Government plans for long-term care. He said that within Labour’s next manifesto it will outline plans to bring together the National Health Service and local care provision into a new National Care Service and offer elderly people free personal care in their own homes.
He said: “The people who face the greatest burden are too often those on middle incomes, who have savings, but then they will see their savings slip away. We will help the elderly get the amenities to do what they most want: to receive care and to stay in their homes as long as possible.”
An ABI spokesman says: ““Providing long-term care for the elderly is one of the biggest public policy challenges facing the country over the coming decades, and the cost of providing it will be huge. We believe that a partnership between the state and the private sector is the best, and most cost-effective, way of delivering that much-needed care for some of the most vulnerable people in society. We want to be part of the solution, and we urge the Government to ensure that any new structure for delivering it includes the insurance industry.”
Brown also pledged restore the earnings link for the basic state pension in the next five years.
He told delegates that he would not cut spending on frontline public resources. He said: “We will raise tax at the very top, cut costs, have realistic public sector pay settlements, make savings we know we can and in 2011 raise National Insurance by half a percent.”
Brown also called for a referendum on electoral reform early into the next Government. He said: “There is now a stronger case than ever that MPs should be elected with the support of more than half their voters – as they would be under the Alternative Voting system.”