New law would stop last bank branches leaving Yorkshire towns, claims Liberal Democrat leadership hopeful Layla Moran

Liberal Democrat leadership hopeful Layla Moran has pledged to tackle what she calls an epidemic of high street bank closures by only permitting the last branches in a town being closed after a number of steps have been taken.

Councils would be given 12-month vetoes under the plans and the closure would have to be approved by the Financial Conduct Authority.

In Yorkshire and The Humber the number of branches has fallen by 25 per cent and the region has lost 255 branches since 2012.

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Since the mid-1990s, the number of bank branches in the UK has been falling between 2012 and 2019, the total number of bank and building society branches in the UK has fallen by 22 per cent.

Liberal Democrat leadership hopeful Layla Moran. Photo: PALiberal Democrat leadership hopeful Layla Moran. Photo: PA
Liberal Democrat leadership hopeful Layla Moran. Photo: PA

A number of Yorkshire MPs have spoken out against branch closures, including Harrogate and Knaresborough Conservative Andrew Jones in January when Knaresborough’s last bank was earmarked for closure by Halifax.

At the time he said: “Knowing that there are often queues outside Halifax at weekends I do wonder if the people who did the review have any first-hand experience of the branch.”

Under Ms Moran’s plan local authorities would be given a veto blocking a branch closure for 12 months to allow another bank to be brought in.

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The veto could be renewed after 12 months and would be enshrined in legislation and added to every banking licence given out by the regulator.

And issues considered would include how many vulnerable users the bank had.

Ms Moran 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.

“We are seeing these branches close at an alarming rate.

“It’s time our banks recognise instead that they are a utility providing an essential public service.”

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Figures released last year showed banks were abandoning customers in poorer parts of England with high street branch closures happening at a faster rate than in wealthier areas.

Digital current account provider Pockit found that, on average, the most deprived 10 per cent of local authorities had seen a decline of nearly a third (31 per cent) of existing branches since 2010 – whereas the least deprived 10 per cent have seen a fall of just over a fifth (22 per cent) of their existing branches.

Jenny Ross, Which? money editor, previously said: “Banks are closing their branches at an alarming rate, which risks shutting many people out of vital financial services and affecting their ability to access their own cash.

“Bank branches play a crucial role within communities, serving consumers and businesses alike. The industry must ensure no-one is left behind by the digital transition and that when banks shut their doors, they don’t shut their customers out of important banking services.”

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A UK Finance spokeswoman said the banking and finance industry recognises the importance of ensuring cash remains free and widely available for those that continue to need it and has introduced several measures to achieve this – specifically including more remote and rural areas.

The spokeswoman said: “There is no ‘one size fits all’ approach however and understanding the needs of local communities is critical.”

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