When are we going to start supporting newer banks?

Local council proves hostile to new outlets.

Almost 1,000 bank branches have been shuttered in the UK since the banking crisis in 2008. If you check back over the past decade, it gets worse: around 1 in 5 branches have closed – a net reduction of more than 2,000 bank and building society outlets.

So one might expect local authorities would help new kids on the banking block, such as Metro Bank, open new outlets. Not in Richmond they don’t. Metro Bank is keen to open a store on a prime site in Richmond but has now been refused permission for the second time by the local council. No matter that the new bank store would create around 25 to 30 jobs and be open for 80 hours a week, 362 days a year. The London Borough of Richmond upon Thames would prefer to see a new Metro Bank store hidden up a side street as opposed to the prime site, corner location identified by the bank. I know that banks’ reputations have taken a hit of late but this is really a tad ridiculous.

It all comes to change of use. Current planning rules mean that banks are at a disadvantage when it comes to securing prime high street locations – such premises tend to be classified as A1. Bank branches are classified as A2 retail uses. When I spoke with Metro Bank CEO Craig Donaldson the other day, he was a bit miffed – and understandably so. He tells me that he is six months behind target.

He had expected to open 25 new stores by now, instead of the 19 outlets currently open. It is taking Metro Bank an average of six to 12 months and between £75k and £100k per site whenever it begins the process of developing a new store. He estimates that the bank has wasted close on £1m to date, simply to secure the necessary planning consents for its stores already opened. If Donaldson was opening an undertaker or a hairdresser or a dry cleaning outlet – all currently classified as A1 uses – he could skip the time consuming and expensive charade of obtaining the requisite change of use. The regulations are so antiquated that included within the list of A1 retail uses are cats-meat shops and tripe shops.

There was a time when it made sense to treat bank branch planning applications as a separate retail use. Bank branches tended to open only from 9am to 5pm Monday to Friday and represent dead retail space at weekends. Such restricted retail hours tend not to apply to the new challenger banks. The number of empty shops on UK high streets remains at a record high and the stats are not helped by the continued lack of economic growth and the ongoing change in shopping habits.

To date, the government’s efforts to revitalise the high street have been lacklustre. It roped in retail guru Mary "Queen of Shops" Portas; she prepared a report and the PM set aside some precious time to fit in some photo opps with Ms Portas. Then he set up something called the High Street Innovation Fund and allocated around £1.2m to be shared among 12 towns. With a certain depressing predictability, 10 of the 12 towns chosen now report an increase in empty retail units.

Later this week, the Parliamentary Commission on Banking Standards will issue its long-awaited report. The remit of the study is to increase competition and strengthen governance across the banking sector. As part of its findings, the commission might care to suggest that antiquated high street planning regulations be brought into the 21st century. If such changes do not go down too well with planning lawyers coining it in from change of use appeals, then so be it.

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.