|Administrative / biographical background:
In 1957 a Committee was set up to investigate the "Working of the Monetary System in the United Kingdom". This Committee reported in 1959 and one of its main recommendations was that the introduction of a Giro System would be advantageous to the Country and if neither the Commercial Banks nor the Trustee Savings Bank took it up, there was a case for investigating the possibility of the Post Office introducing such a system. This recommendation became a practical reality in 1965 when the Labour Government issued a White Paper "A Post Office Giro", which outlined a system which would use the Post Office and Sub Post Office Counters as its business outlets and have a fully automated central system for processing all transactions.
The White Paper had laid down the criteria needed to be eligible to open an account and the basic services which the Giro was offering. Any person over the age of 16 and any company, institution etc. would be able to open a Giro account with an initial deposit of not less than £5. The basic services were transfers between accounts, deposits into the account, and payments in the form of withdrawals and by post "cheque" to a third party. There was no interest on the account and no overdraft facilities. A statement was provided every time there was a change in the balance and the clearing time for each transaction was to be 24 hours. Charges for some deposits and payments were laid down and stationery was to be provided at cost. Transfers between accounts, deposits into your own account and postage to Giro were free. The charges for businesses were worked out on an individual basis depending on a number of factors.
The White paper estimated that within 5 years from the inception of the service there would be some 200,000 business accounts and about 1 million personal accounts. It was estimated that the National Giro would cost between £4 and £5 million to set up and £15 million to operate annually, once the system was in full swing. The income from charges was estimated at some £10 million per annum, the balance needed to cover the expense and provide a reasonable return on the capital investment, was expected to come from appropriately spread investments at gilt-edged rates. To achieve this the Giro would need an average annual balance per account of between £100 and £150, which seemed a reasonably obtainable target.
The setting up of the Giro office covered both the development of Computer systems and the physical requirements for a site, building, machinery and people. By 20 September 1965 the site had been chosen in Bootle in Lancashire. This was part of the Government's regionalisation programme for large civil service departments. It was also strategically placed to be able to deal with the whole country and Speak Airport near Liverpool, provided a centre for collection and distribution by air and a night service. The Ministry of Public Buildings and Works drew up the plans using the 18ft modular building system and the contract went to Tersons Ltd, in March 1966. The first buildings were ready by October 1967 and the whole complex was handed over in March 1968.
This centre was opened by Mr. Harold Wilson on the 18 October 1968. The National Giro was seen as complimenting the Clearing Banks by providing a simple, cheap and efficient money transfer service for both personal and business customers. It was envisaged that it would meet the Banking needs of the lower income groups who didn't usually have an account with a Clearing Bank
The Giro had received 60,000 applications to open accounts by October 1968, of which about 33% were from businesses. The figures for December showed that 44,000 accounts, with a balance of £10 million, had been opened. The Giro also had a London Office which played an essential role in forging links with the money markets, the Bank of England, other financial institutions and key corporate customers, and in dealing with the Post Office and the Government. The Post Office Act 1961 gave full legal powers for the investment of Post Office funds, and it was agreed in 1968 that this included Giro funds. These funds, made up of money remaining in the system, were to be invested in the London Discount Market, the Treasury, Local Authority, Bank and Fine Trade bills. Initially investments were limited to periods of less than 5 years, but it was hoped that longer periods would be allowed once experience had been gained. The dealings were conducted from the London Office.