To deal with the rising crisis of UK bank branch closures, the Labour Party has unveiled a plan to safeguard access to essential banking services.
According to Finextra Research, this initiative emerges amidst a troubling trend that has seen the number of bank branches in the UK plummet by nearly half since 2015, a decline highlighted in recent data from consumer watchdog Which?. The past year alone has witnessed the closure of 600 branches, with major banks like Lloyds announcing additional shutdowns for 2024.
Confronting this reality, Labour has proposed empowering the Financial Conduct Authority (FCA) with new mandates. This will not only prevent the rise of “banking deserts” but also ensure the sustenance of vital face-to-face banking services. The party’s ambition is crystallized in its pledge to oversee the development of at least 350 new high street banking hubs. These hubs, a concept already being explored by lenders in collaboration with Cash Access UK and the Post Office, offer a shared space where customers from various banks can conduct essential transactions such as cash withdrawals, deposits, and bill payments.
Shadow Chancellor Rachel Reeves has voiced strong support for these measures. “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.”
However, the proposal has attracted criticism from Economic Secretary to the Treasury Bim Afolami, who 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.”
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