Labour will protect the high street by ending damaging bank closures
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Labour will introduce major changes to bank law to prevent banks
forcing through closures of vital high-street banks As part
of Labour’s plans to rejuvenate the high street and protect local
communities, the next Labour Government will make major changes to
the banking law that will prevent banks closing their vital
high-street branches and damaging local communities and small
businesses. Despite the introduction of an “Access to
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As part of Labour’s plans to rejuvenate the high street and protect local communities, the next Labour Government will make major changes to the banking law that will prevent banks closing their vital high-street branches and damaging local communities and small businesses.
Despite the introduction of an “Access to Banking Protocol” to prevent closures by this Conservative Government, the Consumers Association reports that 1,046 local bank branches closed in the UK between December 2015 and January 2017, with another 486 already scheduled for closure this year.
But the Big four banks made over £11bn profits 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.
Over two-thirds of small businesses claim that a local bank branch is important and lending to small businesses has been found to drop by 63 per cent in areas with a recent bank branch closure. For deprived communities and households, loss of a local bank branch significantly diminishes their abilities to access even basic financial services. Older people are significantly less likely to use internet or phone banking services.
Labour believes tougher action is needed on our major banks to prevent them putting their profits first and making short-sighted and damaging decisions. We will replace the toothless Access to Banking Protocol with the force of the law to bring banks into line.
Shadow Chancellor John McDonnell, will say:
“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.”
Emeritus Professor, Prem Sikka, University of Essex, who advised on the policy, said:
“Banks receive considerable financial support from the public and in return should be required to provide financial infrastructure that meets the needs of individuals and businesses.”
ENDS
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