As banks in the UK continue to close branches, the Labour Party has announced plans to grant new powers to regulators aimed at ensuring public access to cash. If successful in the next general election, Labour intends to oversee the establishment of hundreds of high street banking hubs.
According to data from consumer watchdog Which?, the number of bank branches in the UK has nearly halved since 2015, with 600 closures reported just this year. Recently, Lloyds also revealed its intention to close more branches in 2024.
In response to the decline in physical banking locations, banks, along with Cash Access UK and the Post Office, have started to introduce shared banking hubs. Currently, there are 24 of these hubs in operation, but Labour promises to facilitate the creation of at least another 350. These hubs will allow customers of various banks to withdraw cash, deposit money and cheques, and pay bills.
Moreover, Labour aims to implement additional measures that empower the Financial Conduct Authority (FCA) to prevent the emergence of “banking deserts.” In August, the government initiated steps to give the FCA the authority to ensure adequate cash deposit and withdrawal services for personal and business current accounts across the UK.
Labour’s proposals seek to preserve essential face-to-face banking services. Shadow Chancellor Rachel Reeves stated, “Labour’s plan will bring banking services back to communities that have seen them disappear, enabling more people across the country to access necessary services closer to home.” She emphasized the party’s commitment to revitalizing high streets and ensuring that every community has access to banking services.
In contrast, Economic Secretary to the Treasury Bim Afolami criticized the Labour Party’s approach, suggesting that they are merely catering to public sentiment without providing a clear plan for funding these initiatives.