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The Chancellor has said towns are at risk of becoming “banking deserts” as she opened the UK’s 100th banking hub, and declined to commit to a fresh increase to the Government’s target despite calls to pick up the pace.
Rachel Reeves also admitted she was “not immune” to the cost pressures facing small businesses following the Budget.
The Chancellor opened the hub in the market town of Darwen, Lancashire, on Friday as part of efforts to protect communities’ access to cash.
A banking hub is a shared space on the high street that can be used by customers of different banks.
It offers a counter service operated by the Post Office and a community banker service with different banks working on rotation each day.
The truth is, we’ve all seen in our areas that banks are closing, and without these banking hubs towns are going to be banking deserts
Chancellor Rachel Reeves
Ms Reeves said the Government was “on track” to roll out 350 hubs by 2029, with five opened this week and another 80 in the pipeline for next year.
She told the PA news agency: “That is a ramping-up of the plans that we inherited.
“It’s a manifesto commitment and we’re absolutely determined to deliver against it so that more people, more towns, more communities have access to those banking facilities.”
Asked whether the Government would be prepared to increase its target to keep up with the pace of bank branch closures, Ms Reeves said the current plans were a “massive ramp-up of the plans that we inherited” from the previous government.
Some consumer groups have said the rollout of alternative banking services remains too slow for consumers to feel the benefit, with thousands of branches closing in recent years.
More than three in every five bank branches across the UK have closed their doors permanently since 2015, according to research from Which?.
Ms Reeves said Nationwide Building Society’s pledge to remain in every town and city where a branch currently exists, until at least 2028, was “great”.
“But the truth is, we’ve all seen in our areas that banks are closing, and without these banking hubs towns are going to be banking deserts and that’s why these banking hubs are so important,” she told the PA news agency.
I’m not immune to the challenges that businesses face, but when I became Chancellor there was a £22 billion black hole in the public finances and I acted to bring stability back to the economy
Chancellor Rachel Reeves
Sam Richardson, deputy editor of Which? Money, said: “It’s vital that the Government holds its commitment to opening 350 hubs in the next few years – and it should be prepared to revise that figure upwards if necessary.”
The Chancellor insisted that she “brought an end to instability” caused by the Tory government, despite facing backlash on the decision to increase the rate of employer national insurance next year in the autumn Budget.
“I’m not immune to the challenges that businesses face, but when I became Chancellor there was a £22 billion black hole in the public finances and I acted to bring stability back to the economy.
“In the last few years our economy has been plagued by instability, with double-digit inflation, interest rates and mortgage rates through the roof.
“I brought an end to that instability through the decisions that we’ve taken.”
