FSB: turn Post Offices into Post Banks

Small businesses will be at the centre of the UK's economic recovery, but only if new conduits for lending are established, according to John Wright, the chairman of the Federation of Small Businesses (FSB).

Mr Wright has said that increased bank competition would free up lending to small firms and has called on the government to back council-run banks, following the Bank of Essex model and for post offices to lend to small businesses.

"By turning Post Offices into Post Banks we not only save our valuable Post Office network, but we also provide a further source of funding for small firms," said Mr Wright.

"Regional Development Agencies should be turned into regional finance houses, using funding from the European Investment Bank and pushing the Enterprise Finance Guarantee and regional venture funds."