The Labour Party has committed to opening “at least” 350 banking hubs across the UK should they be victorious in the 2024 general election.
According to MoneyWeek, under the leadership of Sir Keir Starmer, the party outlined a plan in its manifesto last week, aiming to rejuvenate the nation’s high streets by reintroducing essential banking services to underserved communities.
The initiative involves granting new powers to the Financial Conduct Authority (FCA) and revising the criteria for establishing banking hubs. These hubs differ from traditional bank branches by being shared facilities used by multiple banking brands, first introduced in 2021 to counteract the closures of numerous local bank branches.
The Labour Party’s proposal is a response to the widespread closures of high street bank branches, with a notable 6,000 shut down since 2015, according to the party. The high street presence of major banks like RBS and TSB has been diminishing, leading to reduced access to face-to-face banking services. The proposed hubs aim to address these gaps by not only providing traditional banking services but also offering digital training and debt advice.
Emphasising the impact on local economies, Labour cited a study conducted by London Economics and commissioned by the Post Office, suggesting that the establishment of 350 banking hubs could potentially contribute an annual £83m to the nation’s high streets, with projections rising to £593m over five years if 500 hubs were installed.
These figures, however, are considered conservative estimates given the dynamic nature of services these hubs could offer.
Labour’s shadow chancellor, Rachel Reeves, strongly criticised the current government’s management of high streets, portraying them as “ghost towns” and highlighting the election as a pivotal opportunity for change. “This election is a chance to vote for change to end the chaos and decline and make our high streets better off,” Reeves said, underscoring the party’s growth plan which includes the widespread introduction of banking hubs to support local communities and businesses.
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