The Labour Party has pledged to open 350 banking hubs during the next Parliament, if it wins the 2024 general election.
Sir Keir Starmer’s party, which launched its manifesto last week, claimed it would “bring banking back to the high street” should it form the next government. It would do so by giving the Financial Conduct Authority (FCA) new powers, and by reforming the criteria for where hubs can be created. It comes as Labour has sought to paint itself as the party of business.
Banking hubs work in a similar way to bank branches in that they give people access to face-to-face everyday banking services. The only difference is that these spaces are operated by multiple banking brands. They were first launched in 2021 in a bid to keep a banking presence in towns that had lost access to physical branch services, with 56 currently in operation.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Dozens of bank branches are set to be shuttered this year. RBS and TSB are among the brands who are reducing their high street presence. Labour claims 6,000 branches have closed since 2015.
Latest Videos FromMoneyWeek
We have covered the manifesto launches of the Conservative Party and Liberal Democrats. You can also read about what the Green Party manifesto and Reform UK’s policies would mean for your money.
Labour: banking hubs ‘make our high streets better off’
The Labour Party has pledged to “quickly” establish “at least” 350 banking hubs over the next five years. It said it would unlock these extra hubs by updating the existing qualifying criteria that governs whether a town or village can get one.
Doing so would “ensure fair treatment for bankless towns and underserved communities” it said. Starmer’s party claimed the current criteria had “unfairly denied” some communities the face-to-face banking services they were seeking.
It has also promised to give ATM provider Link and the FCA greater powers to identify places that are in need of a hub. It added that areas which don’t have a high street bank would be “first in the queue” to get one. The services provided by these hubs could be bolstered so that they can provide digital training and debt advice, the party promised.
Accusing the Conservatives of reducing high streets to “ghost towns”, Labour pointed to new research by London Economics - which was commissioned by banking hub operator the Post Office - that found 350 hubs would be worth £83m a year to the nation’s key thoroughfares, or £415m over five years.
This longer-term figure would rise to £593m if 500 hubs were created, the research stated. But the party added that these figures were likely to be underestimates given the evolution of the services banking hubs offer could unlock even more value for high streets.
Labour’s shadow chancellor, Rachel Reeves, said: “After 14 years of the Tories, many of our high streets have been reduced to ghost towns. This election is a chance to vote for change to end the chaos and decline and make our high streets better off. Labour’s plan for growth means bringing banking back to high streets, with hundreds of new banking hubs that can support local communities and their businesses.”
What have the other parties said about banking hubs?
Only the Conservatives and the Lib Dems have mentioned banking hubs in their respective manifestos.
Rishi Sunak’s party has sought to highlight its record by saying it has announced 100 banking hubs during its time in office. Its manifesto added that the Conservative government has legislated that banks and building societies which are considering shutting a branch have to make specific considerations before they do so. However, the Tories have not made any pledges about going any further with these policies.
Meanwhile, the Lib Dems have said that they want to support banking hubs and are committed to “protecting access to cash, especially in remote areas”. These would come under a “national financial inclusion strategy” that would require the FCA and the Prudential Regulation Authority to give greater consideration to ensuring that banking and financial services are open to everyone.
