UK's Labour pledges to plug gaps left by bank branch closures

Virgin Money UK

17/06/2024 22:30

By Huw Jones
       LONDON, June 17 (Reuters) - Britain's Labour Party said
on Monday it would give regulators new powers to significantly
increase the number of 'banking hubs' on high streets if voted
into government next month.
    Lawmakers in Britain have flagged concerns about the closure
of branches leaving some people, particularly in rural areas,
facing difficulties accessing cash as many customers bank online
and use cards to pay in shops, cafes and petrol stations.
    Banking hubs are located in communities across Britain and
operated by the country's Post Office, in partnership with nine
high street banks. They allow for face-to-face personal and
business banking as well as transactions and cash withdrawals.
    Labour, which polls tip to win power from the Conservative
Party in Britain's general election on July 4, said 6,000
branches have been shut since 2015, with only 50 banking hubs so
far opened under a voluntary arrangement with banks including
the big four of HSBC, Lloyds, NatWest and Barclays.
    Rachel Reeves, who would become Britain's finance minister
if Labour wins, said she would give the Financial Conduct
Authority (FCA) new powers to support LINK, Britain's largest
cash machine network, to proactively source new locations for
350 hubs over the next five years.
    It would also make it easier for communities to qualify for
a hub, Labour said.
    The Conservative government has already approved a law
tasking the FCA to ensure reasonable provision of cash deposits
as the volume of payments in Britain that do not involve cash
rose from around 46% to 86% in the decade to 2022.
        "The Conservatives have a clear plan to protect Access
to Cash. We have taken the bold action to ensure we are on track
to deliver 225 more banking hubs, ensuring peace of mind and
financial security for people," Bim Afolami, Financial Secretary
to the Treasury, said in a statement. 
  
    More must be done to improve the timely delivery of services
where cash access gaps have been identified," the FCA said in an
Access to Cash consultation paper in December on draft rules.
    The FCA is due to set out final rules in the third quarter
to make it harder for banks to shut a branch if no alternative
source of cash is in place.  

 (Reporting by Huw Jones; Editing by Alexander Smith)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))