High Street Bank Closures

11:00:00

I beg to move, That this House has considered high street bank closures and banking hubs. It is always a pleasure to serve under your chairmanship, Mr Stringer. I want to bring to the Chamber a really important issue: high street banking, which in my view, has been in absolute crisis with the precipitous decline in branches operating in communities up and down this country for the past four decades. Data from the British Banking Association shows that the number of branches in 1986 was more than 21,000; at the beginning of 2025, there were fewer than 5,000. Many smaller communities no longer have a high street bank. Banking habits have clearly changed, with many people now using internet banking, but the loss of high street banks is a bitter blow to many people, particularly vulnerable groups in our communities, such as the aged, the frail and people with disabilities, all of whom are at serious risk of financial exclusion. For example, according to the Royal National Institute of Blind People, in my Blyth and Ashington constituency there are 3,420 people living with sight loss. That is extraordinary. For blind and partially sighted people who struggle with online access, bank closures are—at the least—devastating, and that is just one prime example of the groups of people affected by the disappearance of banks from the high street.

This is a very important subject for the hon. Gentleman and for me as well. We have lost 11 banks in my constituency. They put forward the idea of banking hubs; well, we have got one, and there is a second one on the way, but the fact is, it takes ages for them to arrive. Does he agree that what we need is urgency on the substitutions, whether they are banking hubs or alternatives, such as in post offices? If we do not have that for rural communities, then we do not have anything at all.

I agree. I have already mentioned the number of closures; I am not sure whether a post office can act as a back-up, because we have seen closure after closure of post offices, until eventually a number of the constituencies up and down the country have no facilities whatever.

The towns of Stoke, Longton and Fenton in my constituency will soon have no banking facilities at all. Link’s assessment of a banking hub is that it considers an hour’s bus journey, and a return cost of almost £5, to be acceptable parameters to say that my constituents can access banks in Hanley. Does my hon. Friend agree that, further to what the hon. Member for Strangford (Jim Shannon) said, we need not only to roll out banking hubs more quickly, but have the criteria change so that every town in every community can access a banking hub or high street banking facility?

That was the whole idea of bringing the debate to this Chamber. The issue is the inflexibility of Link and of the Financial Conduct Authority regulations, which means that even the smallest, most minute detail can mean that people are not going to have a banking hub. That really needs changing, for the sake of our communities. It impacts local businesses, which are also at risk of adverse effects as a result of bank closures, with reduced ability to manage their cash flows and, of course, reduced productivity due to time spent away while accessing banking services. In my constituency, the coastal village of Newbiggin-by-the-Sea was left without a bank in 1999, meaning that for more than 25 years, local people have been forced to travel in order to access banking facilities. That is the point I make to the hon. Member for Strangford (Jim Shannon). I want to use Bedlington as an example in my contribution, too. It is Northumberland’s fourth-largest town, and in May this year, it will be left without a bank, following TSB’s decision to close its branch on Front Street West. In recent years, bank branches in Blyth and Ashington, the two largest towns in my constituency, have also closed. While they are both currently served by banking providers, I can only wonder how long that will last. The case of Bedlington is particularly worrying. It is a proud community with a rich and in many ways unique history. During the flight northwards from William the Conqueror’s army, the body of St Cuthbert is said to have been rested at what is now St Cuthbert’s church. The town and its surrounding areas were once an exclave of County Durham, then it developed into an industrial centre, with its ironworks and multiple coal mines. The loss of heavy industry has left a huge legacy, similar to that in many other post-industrial communities. When passing through that lovely place, Bedlington, people might not understand that unique history, with its traditions and cultures, because it has got a picturesque high street. The town contains pockets of significant deprivation, and the erosion of services in Bedlington makes the lives of those who are struggling ever more difficult. Following the announcement that the final high street bank would close, my office triggered a review with Link into access to cash. Immediately after that, Link contacted my office to apologise about the fact that a review had not been automatically triggered, as would be the normal process. We were told that the review had been fast-tracked through the initial stages and a visit was arranged by one of the Link community assessment managers. I met with the community assessment manager in Bedlington prior to the general election, following his assessment, and I could not have felt more positive about his reflections. He was an excellent ambassador for Link and, indeed, a good, intelligent man. He had been up Bedlington’s main street and spoken to the people there long before I arrived. He was gushing in his praise for Bedlington high street, describing it as a handsome high street that was well frequented, with a mixture of local businesses. He was unable, at that stage, to confirm that a banking hub would 100% be recommended, but it was heavily suggested that that would be the preferred solution. I was absolutely delighted at that because, as I think everybody will agree, there is a great place for banking hubs. They are a good, progressive move forward. It is inflexibility that is the huge problem.

The hon. Gentleman is making a powerful speech. We all understand that when a business is struggling, it has to cut costs, but these banks are closing branches despite making billions of pounds of profit. By pulling out of towns and the high street, those banks no longer provide a service for their customers—for the elderly, the disabled and local businesses. Knowing that banks need a licence to operate, does he agree that, to solve this growing problem, there needs to be a condition that, to get that licence, banks need to serve all of their customers and actually remain on the high streets?

That is absolutely reasonable, is it not? The decision by Link or the Financial Conduct Authority is basically transactional. It does not really look at the community factors—it looks at a lot of different factors, but those do not count as points toward the overall result or announcement that there will be the go-ahead for additional services. That must change. It must embrace everything that is happening; it cannot be because the banks are leaving, which they have been on pace because of the profit margins. We have to start looking after communities and vulnerable people—the frail, the elderly and the disabled—in places like that and we need to change the regulations.

I commend my hon. Friend on securing such an important debate and for his powerful points. On the point that the right hon. Member for Tatton (Esther McVey) just made, in recent years my constituency has become a banking desert—literally deprived of banks on high streets. For my neighbours living in Chadwell Heath, the nearest branch is some 40 minutes away and that is probably how long it takes to go from one end of my constituency to the other. Banks are not just profit-making organisations; they also offer a valuable service, and that has to be recognised. Does my hon. Friend agree that local banks as well as post offices and bank hubs have to be left on our high streets because of the service they provide, particularly to deprived communities?

Absolutely. It is essential and that is the whole reason behind this debate. I will get back to that. I was more or less guaranteed, unofficially, that we had qualified in Bedlington. I was dumbfounded to see, when Link’s assessment was published some months later, that it suggested no additional services—no action to support the elderly woman from Bedlington station who banked in person on a weekly basis on Front Street, used the opportunity to speak with trusted members of staff without worrying about falling prey to scammers, met her friend for a coffee on Bedlington Front Street and took the opportunity to visit some local shops and spend a few pounds in the process. There was no assessment of the impact on that woman, on other residents or on local businesses of allowing high street banking to be lost with no banking hub provided; no assessment of the impact on people like her who are now travelling to a neighbouring town and spending their money there instead. On inspection, it appeared that we had been turned down because there was a bank in Cramlington located 0.1 km closer to Bedlington Front Street, as the crow flies, than the regulations suggested were appropriate. That is why we were declined—because of 0.1 km—and it is time that that sort of thing was addressed. We need to look at issues in the community such as deprivation, elderly people and those who, as the hon. Member for Strangford mentioned, are in desperate need of facilities on the high street. I immediately applied to Link and, as advised by its parliamentary liaison officer, I submitted an appeal, which was summarily dismissed without much discussion. I emphasised that Bedlington, as the fourth-largest town in Northumberland, should not need to use facilities in other towns.

My hon. Friend is making a powerful speech about a corner of the county that we share, and I am interested to hear his reflections on the communities that lose out on access to banking services. Does he agree that, with the shameful decision to close three branches in my constituency, there is a real risk that businesses in the Tyne valley, as well as elderly and vulnerable people, will lose access to those face-to-face services? Does he also agree that we need to consider the rural hinterland that is served by these larger towns when making these decisions so that rural businesses are not crippled by bank closures.

I fully agree with my hon. Friend from the neighbouring constituency to mine. Urban and rural areas face the same issues; we are being abandoned on the high street by these large banks. That is why we need to get the criteria changed to make sure that we allow Link—

Will the hon. Gentleman give way?

It will have to be very brief.

On the specific point of the criteria, I could not agree with him more. It is really problematic. In my constituency of North Herefordshire, we have a banking hub opening in Leominster, now that Lloyds bank has left. However, in Kington, which does not have a bus service to Leominster, there is a fantastic post office that could be a banking hub, but it has been told that it does not fit the criteria. I do not understand why. Does the hon. Member agree that we need to ask the Government to make sure that these criteria are reassessed, because banking, especially in remote areas, is such an important function for businesses and individuals. We cannot continue with the system as is.

I agree totally about the transport hubs. We cannot say to an elderly, frail or disabled person, “Get that bus to the next town. It’s only three mile.” As my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned, is it reasonable to say to somebody, “If you can get there within an hour, that means you don’t need a facility.”? The criteria need to be changed. I will ask the Minister a number of questions that I hope he will consider. I am fully aware that 100 Link hubs have been set up already, 200 are in the system, and it is hoped that there will be 350. That is really positive, but it would still leave behind and abandon lots of communities such as mine in Bedlington. The dealings I have had with Link and the FCA have been perfectly cordial, but wholly and utterly transactional. It is, basically, “Computer says no”. The legislation cannot simply focus on access to cash and ignore the loss of banking services. I hope the Minister will agree that the current rules leave Northumberland’s fourth-largest town with no bank and no banking hub, and that they are too inflexible. It is within the power of the Government to change the regulations. Will the Minister consider asking Link to look at other community factors when assessing the suitability of a banking hub? Does he agree that all areas are unique, and should not be shoehorned into a rigid process that does not fit them? Does he agree that measuring the distance as the crow flies from the doors of the last bank to close is not reasonable, and takes no account of the distance vulnerable people already have to travel?

My hon. Friend is making a powerful speech. On the subject of vulnerable people, I want to say that the last two branches in Whitby have announced that they will close, and an adult gaming centre is already looking at the Halifax site. We are getting a temporary banking hub, but does my hon. Friend agree that vulnerable residents rely on having a branch, and that, somewhere along the line, the words “providing a service”, seems to have been lost to banks?

Unfortunately, my understanding is that high street banks want to centralise in much bigger places and make much higher profits, and do not consider the communities that the two of us serve. Does the Minister agree that the demographics of an area should be of paramount importance when assessing the need for a banking hub, and will he take steps to include that in the criteria? Does he agree that banks should commit to a local service before putting profits before communities? Does he agree that the Government should have the means to intervene in decisions such as the one I described in Bedlington and other Members described in their constituencies? If Northumberland’s fourth-largest town is being failed, something is sadly wrong. The current criteria are simply not fit for purpose. They abandon many of our most vulnerable constituents. A wholesale, root-and-branch review is required, to make life easier, not more difficult, for those we proudly represent.

11:20:00

It is a pleasure to serve with you in the Chair, Mr Stringer. I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. We can see from the number of Members who have intervened to raise concerns about their constituencies that this issue is widely felt across our country, and the issue resonates deeply with our constituents. It is a priority of this Government to ensure that all citizens have appropriate access to banking across the UK. As hon. Members have alluded to, banking has changed significantly in recent years thanks to digital innovations, and many people can now bank more conveniently, at any time and in any place, without needing to go to a bank in person. In 2017, 40% of UK adults regularly used banking branches, but by 2022 that figure had fallen to 21%, and in the same year nearly nine in 10 adults used online banking or mobile apps, including, notably, 65% of those aged over 75. However, the Government are committed to ensuring that everyone can benefit from banking services. At the autumn Budget 2024, the Chancellor announced funding of more than £500 million in 2025-26 to deliver digital infrastructure upgrades through Project Gigabit and the shared rural network. Those initiatives will drive the roll-out of broadband and 4G connectivity to support access to good internet and to plug connectivity black holes across the UK by 2030. More than 86% of UK premises can now access gigabit-capable broadband, which is a huge leap from July 2019, when coverage was just 8%. Investing in digital infrastructure will improve access to digital banking services, but I assure hon. Members that the Government also understand the importance of face-to-face banking services in communities and high streets across the country. Many of our constituents are particularly concerned about the availability of cash and access to in-person banking services, so the Government are committed to ensuring that people and businesses across the UK have access to those banking services and that everyone can contribute to economic growth in local areas and thriving local high streets.

I thank the Minister for that point. His brief reference to access to cash is vital, but the word that was missing was “free”: access to free cash. One of the by-products of the closure of high street banks is that the cashpoints that remain tend to have a transaction fee, and that is particularly the case in the communities that can least afford it. That means that people in some parts of my constituency pay up to £3 simply to withdraw their money. For people who do not have a lot to start with, that is a huge barrier to getting the cash they need.

My hon. Friend makes an important point about the barriers to people accessing cash—not merely the location of banking hubs or facilities, but financial barriers. There may also be transport barriers to people getting to banking hubs in the first place. I hope to address that briefly in the remainder of my remarks.

On that point, will the Minister give way?

Very briefly.

On the point of geographic vulnerabilities, Aviemore, which many people will know as a major ski resort in Scotland, is pretty remote: it is on a major A-road, but it is in the middle of the Cairngorms. It has lost its last bank, and the nearest is Inverness, which is a 40-minute drive away—if someone has a car and it is not minus 10°, which is quite common in the middle of winter. Does the Minister agree that a degree of common sense needs to be applied by Link when looking at banking hubs—because that common sense is critical in making that assessment and it should not just be a tick-box exercise, as has been alluded to?

The hon. Gentleman’s point relates to transport links and the accessibility of banking hubs. It links well to the comment from my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), which is that a banking hub or banking service on its own might need further infrastructure around it to ensure that people can get there. I hope to address that briefly in just a moment. The Economic Secretary to the Treasury is working closely with the industry to roll out 350 banking hubs—as my hon. Friend the Member for Blyth and Ashington mentioned—by the end of this Parliament. Banking hubs allow people and businesses to withdraw and deposit cash, deposit cheques, pay bills and make balance inquiries. Importantly, they also contain rooms where customers can see community bankers to carry out wider banking services, such as registering a bereavement or getting help with changing a PIN. The Government are committed to working with the industry to ensure that banking hubs meet customers’ needs. Following rules laid out for the Financial Conduct Authority, the roll-out of banking hubs is determined in accordance with legislation. When a bank announces the closure of a branch or a material change of cash access, an assessment will be carried out by Link, which we have heard hon. Members refer to today and is the operator of the UK’s largest ATM network. That is an impartial assessment of a community’s access-to-cash needs. Where Link recommends a banking hub, Cash Access UK, a not-for-profit company funded by major UK banks, will provide it. The assessments take into account criteria such as population size, the number of small businesses, and levels of vulnerability. They also consider the distance to the nearest bank branch and the cost and travel time to get there on public transport. Importantly, where the announcement of a bank closure triggers an assessment, the branch cannot close until recommended services have been installed. Any member of the public—including Members of this House—can request an access-to-cash review directly, through the Link website. My hon. Friend the Member for Blyth and Ashington and others have put on record their concerns about the criteria that Link uses to make the assessments. Those concerns are on record through this debate. Any decisions on changes to Link’s assessment criteria are a matter for Link, the financial services sector and the FCA, which oversees the access-to-cash regime. The FCA is required by law to keep its rules under review. It monitors the impact of those rules on an ongoing basis to ensure that they deliver the right outcomes for businesses and consumers.

I thank my hon. Friend the Minister for giving way and my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing the debate. On the point about the criteria, it is difficult to match some of what we know about our own constituencies with some of the criteria that Link deals with, which seem restrictive. Does the Minister agree that the Government have set a target of opening banking hubs, but the Link criteria are not meeting community needs and need to change? Does he agree that that is a priority?

I thank my hon. Friend for his intervention. As I set out, the Government have committed to 350 banking hubs in the course of the Parliament, but any changes to Link’s assessment criteria are a matter for Link, the financial services sector and the FCA, under the rules set out in legislation. I will also point to the fact that customers have other options to access everyday banking and cash services. In particular, the Post Office deserves a mention for its extensive presence on the country’s high streets, which ensures that 99% of the UK population live within 3 miles of a post office. Through the Post Office banking framework, 99% of personal banking and 95% of business banking customers can access vital cash withdrawal and deposit facilities at 11,500 post office branches across the country. We talked a lot about some of the issues with accessing banking services and banking hubs when they are open. It is important to note that in the autumn Budget, we announced £1 billion of investment in support of bus services, which will be crucial in connecting rural areas and small towns and helping people to get to their nearest banking services. In recognition of the fact that each community has individual needs, we have introduced the Bus Services Bill, which will put power over local bus services back in the hands of local leaders. We continue to take action to make sure that high streets and communities across the country can realise their full economic potential. I again thank my hon. Friend the Member for Blyth and Ashington for securing this important debate. I welcome the support from him and other hon. Members for the Government’s important work to ensure access to banking for all, and to support our commitment to unlocking the full potential of high streets across the country. Question put and agreed to.

11:30:00