A Labour government would consider new powers to prevent ‘banking deserts’

Labour is considering bringing in powers that would prevent communities being left in “banking deserts” if it wins the next election.

The party has pledged to bring banks back to British high streets after a series of closures in recent years as customers switch to online and telephone banking.

Labour plans to accelerate the rollout of so-called banking hubs where people can deposit and take out cash, as well as access wider banking services.

Officials said the party would be working with banks on the proposal but Sir Keir Starmer’s outfit is prepared to bring in new powers for the financial services regulator to prevent areas becoming “banking deserts”.

Shadow chancellor Rachel Reeves said: “Labour’s plan will bring banking services back to communities who have seen them disappear over recent years, meaning more people across the country will be able to access the services they need closer to home.

“Labour will tackle ghost high streets and ensure that every community has access to high street banking services.”

Labour believes its policy proposal could see at least 350 banking hubs established on local high streets.

With the hubs designed to be shared by major banks, customers from almost every bank will be able to use them, it said.

The boss of the Post Office suggested his organisation is well placed to support any expansion of banking hubs.

Rachel Reeves
Shadow chancellor Rachel Reeves (James Manning/PA)

The Treasury has been approached for comment.

Citing data from consumer group Which?, Labour said almost half of bank branches in the UK have shut in the eight years since the Conservatives won a majority in 2015, with about 3,200 remaining in England.

Regions such as the South West of England and Yorkshire have lost nearly two-thirds of their bank branches, according to Which?

On Thursday, Lloyds Banking Group announced it is shutting another 45 branches across its network and the Halifax and Bank of Scotland brands.

The news came a week after NatWest Group said it plans to shut 19 branches, mostly in the early part of next year.

Bim Afolami, Economic Secretary to the Treasury, said: “Another day, another example of Labour taking the easy way out and just saying what they think people want to hear — without saying how they would pay for it.

“Their sums don’t add up: Keir Starmer is claiming Labour can afford to launch new banking hubs, scrap business rates which would cost tens of billions of pounds, borrow £28 billion more every year, cut people’s taxes and somehow keep debt falling.

“This is simply not possible – they are not being straight with the public.

“The Conservatives are taking the long-term decisions to strengthen the economy, including ensuring that people, wherever they live, can access banking and cash services.

“This includes working with banks to roll out banking hubs across the country whilst ensuring access to banking services is available in almost 12,000 Post Office branches.”

Labour’s blueprint to restore banking facilities to the high street follows the publication by the party this week of its Plan For Small Business.

– Advertisement –
– Advertisement –