The Labour Party has outlined plans to revive the UK’s retail banking sector, having asserted that many commutes have been left in ‘banking deserts’ by the Conservative government.
Announcing its policies via X, where the party shared an article from The Independent detailing its plans to open ‘banking hubs’ across the UK should it win the next general election, due to be held no later than January 2025.
These hubs would provide customers with the option to deposit and take out cash and access other general banking services. Labour emphasised that ‘too many banks have disappeared from our high-streets’, but that it has a plan ‘to guarantee access to face-to-face banking in every community’.
“The aim of Labour’s commitment today is that wherever you live, you should be able to access cash from a facility like this,” said Rachel Reeves, Shadow Chancellor of the Exchequer, in an interview with BBC Radio 2.
“That is why we’re making the commitment to 350 banking hubs in the first term of a Labour government, and that is the minimum that we want to deliver because we know that more and more people are struggling to access cash and more town centres and more small businesses are without some of those very basic banking facilities that we take for granted, and that a thriving economy needs to be successful.”
Labour has cited data from Which?, noting that over 5,000 local bank branches have closed during the 13 years that the Conservative Party has been in power, leaving just 3,200 throughout the UK.
Commenting on Labour’s plans, Which? Money Editor, Jenny Ross, remarked: “The country’s banking infrastructure has been left threadbare in recent years, with the closure of bank branches leaving millions of consumers who rely on these services at risk of being cut adrift.
“Accelerating and increasing the scale of the rollout of banking hubs will play an important role in ensuring the banking service and cash needs of local communities are met. The hubs must open as soon as possible to stop millions of consumers being left behind, particularly vulnerable people who rely on them.”
Labour’s plans come just a couple of weeks after the Conservative Party unveiled its own proposals to boost the British economy in the Autumn Budget, including tax cuts for SMEs and a £500m investment in AI technology.
However, the ensuing weeks have seen continuing pressure on the retail banking sector. Lloyds announced that it would be closing 45 branches whilst Metro Bank is also reviewing cutbacks, including a reduction in its opening hours and staff headcount.
In response to Labour’s plans, the government’s Economic Secretary to the Treasury, Bim Afolami, remarked that the proposals are ‘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’.
However, according to the Independent, the Post Office believes it is in a strong position to accelerate the rollout of banking hubs, due to its experience of handling large volumes of cash as well as its status as the current operator of banking hubs.