Today (Sunday 31 March 2019) Labour’s Shadow Chancellor, John McDonnell MP, has announced plans to revitalise high streets and set up a publicly owned Post Bank run through the post office network, ensuring every community has easy access to face-to-face, trusted and affordable banking.
By utilising the extensive network of Post Office branches, Labour’s Post Bank would have by far the largest branch network of all UK banks. The Party estimates it could create up to 3,600 Post Bank branches – 299 of them in the East of England – helping to revitalise the East’s high streets by bringing footfall back into our town centres.
A network of Post Bank branches would help stem the tide of post office closures, uniting important banking, business and community services under one roof and creating skilled jobs within one of the country’s most trusted brands.
Research by Which? has revealed that the UK has lost nearly two-thirds of its bank and building society branches over the past 30 years, from 20,583 in 1988 to just 7,586 today, leaving a fifth of the population two miles away from their nearest branch. Over the past five years the Post Office has announced the closure of around 150 Crown Post Offices, 40% of its 2013 Crown Post Office network.
As well offering banking services to individuals, the Post Bank will provide relationship banking with small businesses, acting as an “on-lender” for the regional development banks, to kickstart SME investment.
According to a report by the Bank of England, around 20% of firms are under-investing in their businesses because they are unable to access bank credit needed to expand, with one report by Move Your Money estimating that “bank branch closures dampen SME lending growth by 63% on average in postcodes that lose a bank branch”. The Federation of Small Businesses has also highlighted the impact of bank branch closures on SMEs, saying: “Bank branch closures damage high street footfall, restrict cash flow in local economies and force business owners to waste time travelling to and from their next nearest branch, which could be miles away.”
Jill Borcherds, Labour’s prospective Parliamentary Candidate for Stevenage, said:
“Poor access to local bank branches hurts our town centres and local communities, particularly affecting elderly and more vulnerable customers, as well as damaging the ability of local small businesses to invest.
“Labour’s Post Bank will provide an essential public service, making sure everyone has access to face-to-face, trusted and affordable banking on their high street or in their local community.”