The former Lloyds Bank branch in Great Yarmouth. Photograph: Alamy
Labour has pledged to tackle what it calls an epidemic of high street bank closures by only permitting branches to be shut after a local consultation and with the permission of the Financial Conduct Authority (FCA).
Under a policy to be outlined by the shadow chancellor, John McDonnell, the party would replace the current guidance system over closures, called the access to banking protocol, which was agreed between high street banks, consumer groups and the government.
Labour cited Consumers’ Association figures saying 1,046 bank branches around the UK closed between December 2015 and January 2017, with 486 more scheduled for closure this year.
“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,” McDonnell said. “It’s time our banks recognise instead that they are a utility providing an essential public service.”
Labour argues that the big four banks – Barclays, Lloyds, HSBC and NatWest/RBS – made more than £11bn in combined profit from high street banking during 2015, meaning there was no pressing cost reason for the branch closures. It says its pledge is aimed at assisting small businesses and older customers, who tend to be less likely to use internet or phone banking.
The party cited a Social Market Foundation report, which found that 11% of the population carry out their banking only using their local branch, with these tending to be older or poorer customers.
The proposal would extend the duties of the FCA and give it power to approve any branch closures. This could only happen after banks consulted customers and the local council and published details of the reasons, including the revenues and costs of the branch in question.
The consultation would be overseen by the FCA, which would then “ensure that the closure of the branch does not degrade the local financial infrastructure” or harm the community in other ways.
Responding to the announcement, the Conservative vice-chair and MP for Pudsey, Stuart Andrew, did not specifically comment on the plan, but criticised Labour’s wider policies. “Labour’s plan for our high streets would see corporation tax going back up to 28% and £500bn of extra debt – all under a Labour leader who said that we should not be afraid of debt or borrowing,” he said.
“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 startup loans to help people launch new businesses, which has already helped 40,000 smaller firms across the country.”[“Source-theguardian”]