Labour would change law on High Street bank closures

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Person taking money out of a cashpointImage source, PA

A future Labour government would bring in a law preventing banks closing High Street branches, the party has said.

Labour said it was part of the party's plans to rejuvenate the High Street and protect local communities.

The Consumers' Association reports that 1,046 local bank branches closed in the UK between December 2015 and January 2017, Labour said.

The Conservatives claimed Labour's plans would see corporation tax at 28% and lead to £500bn of extra debt.

Labour said it would replace the government's Access to Banking Protocol with legislation to prevent closures.

The party said the big four banks made more than £11bn profit from their High Street banks in 2015, and "can afford to provide this vital customer service instead of prioritising cost-saving measures that damage communities and small businesses".

Labour points to research that suggests lending to small businesses drops by 63% in areas with recent branch closures, and the loss of a local bank branch significantly diminishes the abilities of deprived communities and households to access even basic financial services.

'Essential public service'

Shadow chancellor John McDonnell said: "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."

In response, Conservative vice-chairman Stuart Andrew said: "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.

"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."