Labour proposes ‘Post Bank’ as part of banking reforms

LONDON: Thousands of post offices would become branches of a new publicly owned bank under Labour proposals to reform the UK banking system.

Shadow chancellor John McDonnell believes a “Post Bank” could be run through the post office network in a bid to protect easy access to face-to-face banking. Labour estimates it could create up to 3,600 branches at a time when post offices, banks and building societies are closing on high streets and in communities across the country.

Other ideas outlined by McDonnell, as Labour prepares for a potential election amid the Brexit turmoil, include keeping RBS (Royal Bank of Scotland) in public ownership when it returns to profitability and a national investment bank to support small businesses. McDonnell said: “Finance is the central nervous system of the economy. It directs investment, deciding which businesses and projects get off the ground and which fail. For too long, this vital part of our economy has been solely in the hands of the big banks and the speculators. As the financial crisis, scandal after scandal and the chronic lack of investment for our SMEs, manufacturing and in our infrastructure show, this model has failed.”

He added: “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 will build a new, public banking ecosystem to promote vital national priorities and give our SMEs, start ups and co-ops the best chance of success.”