Labour announces measures to prevent closure of high street bank branches
A Labour government will legislate to prevent banks closing branches and undermining the viability of local high streets, shadow chancellor John McDonnell has said.
Under Labour's plans, banks will be required by law to consult with customers and the local council, and to obtain the approval of the Financial Conduct Authority before shutting down a branch.
Mr McDonnell said the measure was needed to prevent an "epidemic" of closures which was damaging communities and small businesses which relied on their services.
It is the latest in a series of populist proposals, including imposing VAT on private schools to pay for free school meals for primary pupils and guaranteeing the "triple lock" for pensioners, to be announced by the party.
With the Consumer Association calculating 1,046 branches were closed in the UK between December 2015 and January 2017, with another 486 facing the axe, Labour said it was clear a voluntary "access to banking" protocol agreed with the Government had failed.
Only legislation, the party said, could compel the banks to put their obligations to provide a service to the public ahead of their desire to cut costs.
Labour pointed to research by the Move Your Money campaign for sustainable banking, suggesting the growth in lending to small businesses fell by 63% in areas where the local branch was shut down.
Deprived communities were hit particularly hard, it said, diminishing their access to even basic financial services, while older people were significantly less likely to use internet or phone banking services.
Mr 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."
The plan was dismissed by the Conservatives who said Labour's proposals for tax and spending would damage business.
Tory vice-chairman Stuart Andrew said: "Labour's plan for our high streets would see corporation tax going back up to 28% and £500 billion of extra debt, all under a Labour leader who said that we should not be afraid of debt or borrowing."