Labour would change banking law to stop banks closing high street branches, Shadow Chancellor John McDonnell will announce on Friday.
The Conservative Government introduced its own “Access to Banking Protocol” to prevent closures, but figures form the Consumers Association suggest 1,046 local bank branches closed in the UK between December 2015 and January 2017, with another 486 already scheduled for closure this year.
The Shadow Chancellor thinks changes can be made to bank law to force the big banks to keep their branches open.
Labour’s figures suggest that over two thirds of small businesses have said a local branch is important to them, but the British Banking Association has said that the way people use banks has changed, and forcing unused services to remain in place is “unsustainable.”
Shadow Chancellor John McDonnell, will say: “High street bank closures have become an epidemic in the last few years, blighting our town centres, hurting particularly elderly and more vulnerable customers, and local small businesses whilst making healthy profits for themselves. It’s time our banks recognise instead that they are a utility providing an essential public service.
“Only Labour will put in place the legal obligations needed to bring banks into line and stand up for our high streets, communities and small businesses.”
Eric Leenders, Managing Director for Retail at the BBA said: “Customers want convenient, round-the-clock banking, which has led to a digital revolution in the way they manage their money. This has had an inevitable impact on the use of bank branches, which has led to a number of branch closures. However, the decision to close a branch is never taken lightly.
“Banks want to provide their customers with the service that suits them best. As well as telephone, online and mobile banking, a number of banks have been working closely with the Post Office to make face to face banking facilities available in twice as many places than ever before. Banks will be working with the Post Office to ensure that customers are aware that this option is available to them.”
Emeritus Professor, Prem Sikka, University of Essex, who advised on the policy, said: “Banks receive considerable financial support from the public and in return should be required to provide financial infrastructure that meets the needs of individuals and businesses.”
Responding to Labour’s announcement, Conservative Party Vice-Chairman Stuart Andrew MP said: “Labour’s plan for our high streets would see corporation tax going back up to 28 per cent and £500 billion of extra debt - all under a Labour leader who said that we should not be afraid of debt or borrowing.
“Our support for high streets has seen town centre vacancy rates come back down since Labour were in government. Our support for small businesses has seen start up loans to help people launch new businesses, which has already helped 40,000 smaller firms across the country.”Reuse content