A proposal under the U.K.’s Labour Party would turn some post offices into bank branches, with policymakers pointing to the need to broaden access to financial services for small businesses.
The BBC reported on Sunday (March 31) that Shadow Chancellor John McDonnell introduced the proposal to turn thousands of current post offices into banking centers, creating a new Post Bank that would increase access to community banks. Turning as many as 3,600 post offices into Post Bank branches could address the issue of declining bank locations.
In its announcement, the Labour Party pointed to Which? research that found the number of bank branch and building society locations has declined by nearly two-thirds in the U.K. over the past 30 years, a trend McDonnell said has had a particularly negative impact on small businesses.
“Poor access to local bank branches hurts our town centers and local communities, particularly affecting elderly and more vulnerable customers, as well as damaging the ability of local small businesses to invest,” he said.
A similar proposal was introduced in New York State last year.
The idea is part of a broader proposal for the U.K. banking sector, which includes keeping the Royal Bank of Scotland (RBS) a public entity, as well as the creation of a new bank focused on infrastructure investment. The Labour Party wants to block the current government’s plans to divest its 62 percent stake in RBS, reports said.
“The timing and price of any government share sale is a matter for the Treasury,” RBS said via a spokesperson on Sunday. “Our focus continues to be on building a bank that delivers for shareholders, customers and the U.K. economy.”
The National Investment Bank proposal, meanwhile, involves the establishment of a $328 billion bank to focus on investment in national infrastructure, reports said.
“Finance is the central nervous system of the economy,” stated McDonnell. “It directs investment, deciding which businesses and projects get off the ground and which fail.”