Bank Closures and Banking Hubs

13:20:00

I beg to move, That this House recognises the importance of banking facilities to local communities and expresses concern over the precipitous decline over the past 40 years; notes the change to banking habits through online services; further recognises that, for vulnerable people, face-to-face banking is a vital service and a reduction of branches risks significant financial exclusion; further notes the impact of a loss of physical banking on small businesses through lost productivity and lost footfall; also notes the innovative nature of banking hubs as a solution to a loss of high street banking, but recognises that Financial Conduct Authority rules for their recommendation are too inflexible; and calls on the Government to instigate a review into the impact on communities of bank branch loss and a change to the regulations to ensure communities have appropriate access to banking facilities. On 26 February, I held a debate in Westminster Hall on high street banking and bank closures. Despite the fact that it was only a 30-minute debate, it was incredibly well attended. Such was the demand for a debate on the issues facing almost every community and constituency that, at its conclusion, I was urged to apply for a Backbench Business debate—so here we are this afternoon. I want to put on record my thanks to the Committee for granting such an important debate and to all the Members across the House who co-signed my application, in particular the right hon. Member for Tatton (Esther McVey), who co-sponsored it. This debate, like the previous one, is timely. There has been a precipitous decline in banking provision in the UK over a period of four decades. It has been partially driven by the rapid advances in technology, which have seen a huge uptake of internet banking, but we should not kid ourselves—it has also been driven by a desire from banks still raking in enormous profits to centralise and cut costs, with no regard for the communities they purport to serve. Communities are being sacrificed at the altar of greed, at the behest of banks that no longer see the services they provide as profitable, and as is so often the case, the elderly, the disabled and the poor, who either cannot cope with computers or cannot afford expensive broadband, are the ones who have been hit the hardest. Moreover, the closures have further eroded local economies, with fewer visits to the high street being made and local businesses having additional costs linked to such practicalities as making cash deposits.

My hon. Friend mentioned the issues caused for businesses. There are also significant issues for charities. In my constituency, many local charities and community groups receive cash donations and struggle to find a place to bank them. Does he agree that this is an issue for charities, just as much as it is for local businesses?

That is a very valid point. My hon. Friend is right: when we look at who suffers as a consequence of these decisions, charities are way up there. The regulatory framework in place to protect communities has found itself totally lacking, and that has been the case for some time. That is the reason for this debate. My predecessor for the old Wansbeck seat, Denis Murphy, campaigned vigorously alongside local people against the closure of bank branches in both Newbiggin-by-the-Sea and Guide Post, but despite overwhelming public support, the banks closed regardless. Both those communities have been without their own banks for more than 25 years. Since 2013, the Financial Conduct Authority has been tasked with regulating banking services, including branch closures.

I congratulate my hon. Friend on securing this incredibly important debate. Last month, the well-used Chiswick post office in my constituency closed without notice. I met Post Office Ltd yesterday, and it assured me that a service would be restored shortly. Does he agree that this volatility and uncertainty in the market is damaging to both local communities and the reputation of financial institutions?

That is massively important. People are told that they can rely on post offices to replace the banks. The vast majority of post offices in our communities are now run by a single person and are not making a profit. They can easily just withdraw the services—it does happen, and it has happened lots of times in my career—leaving the communities without anything whatsoever. That is a really important point, which I will probably touch on later. In my experience of dealing with branch closures in my constituency, the FCA’s powers to force the banking industry to rectify the consequential difficulties are totally and utterly inadequate.

I congratulate the hon. Gentleman on securing this debate. The fact that there are so many Members in the House this afternoon underlines that this is a very big problem that crosses party political boundaries and all kinds of constituencies. Harwich, Brightlingsea, Manningtree and other places in my constituency are losing their banking facilities. The Government are spending money on trying to revive Harwich high street, but neither the previous Government nor this Government have done anything to secure the banking facilities that are the lifeblood of a high street. I really welcome this debate. I am not sure that post offices are the answer. I think we need to make sure there is a proper bank on every high street.

I do agree with that. These problems are happening across communities, regardless of whether we are red, blue, green or yellow—it is happening on every high street. Many of them have lost their banks—they are gone—and it cannot be allowed to continue. Under the Financial Services and Markets Act 2023, the FCA can require banks to consult interested parties to consider the effects of closures and can ask the private sector cash machine operator Link to assess the consequences of closures and to recommend where alternatives such as shared banking hub facilities should be created to fill the gaps.

I congratulate my hon. Friend on securing this debate. He mentioned that this problem is happening in every high street across the country, and that is certainly the case in my constituency, where we have seen the almost wholesale withdrawal of banks in West Norwood, Dulwich and Brixton—across the piece, they are closing. Where they close, the banks often say, “We’ll make our services available in a banking hub in the local library,” for example. The service is then poorly advertised and publicised and is not particularly convenient. The banks come along a few months later and say, “We’re closing it because of a lack of demand.” Does he agree that the banks are taking a cynical approach and are failing to provide an adequate service to our constituents?

Of course it is a cynical approach. The banks do not want to be on the high street. They do not want to be supporting local communities—the very same communities that have supported the banks through the darkest of times. That is the reality, and that is why this debate is so important. We need more regulation to support people in their communities.

The hon. Gentleman is making a powerful speech. When the last bank in town closes in communities such as Tenbury Wells and Pershore, it is a cumbersome process for them to qualify for a banking hub. He mentioned the role of the regulator. Does he agree that when the last bank in town closes, a banking hub ought to be provided automatically?

There is definitely room for discussion in that respect. We have got to make sure that people have financial services on the high street. It is pretty simple. Link assesses the consequences of bank closures, but its objectives are directed by the FCA requirements, and basically, it can only assess a community based on access to cash—nothing else. No other social discussions take place; it is just based on access to cash.

I congratulate my hon. Friend on securing this important debate. In Eltham, our last bank has closed, but because we still have a Nationwide in the town centre, the banks will not consider the option of a banking hub. That needs to change. Does he agree that we need a review of the criteria, so that we can have a chance of getting the banks at least to co-operate in a banking hub? They should not rely on Nationwide.

I of course agree: the criteria laid down by the Government, the banks, the FCA and Link need to be utterly overhauled to represent people in our communities. I will come on to some of the points that my hon. Friend raises.

All of us in this House share the concern that the disabled and the vulnerable are losing access not just to cash, but to services. Does the hon. Gentleman agree that it is high time we asked the Government to ensure that the FCA reviews its guidelines on this?

My ask will be a bit stronger than that. I might get my backside kicked, but hey, it will not be the first time. I will ask the Government to insist on legislation that changes the structures to what we are all crying out for. It will not cost the Government a ha’penny to provide services to the people who actually need them.

The number of banks that have left my constituency has driven me mad: in the 336 square miles of Mid Buckinghamshire, only one high street bank is left standing. One of the most absurd things that I have heard multiple banks say over the years is: “Oh, but there’s a bank just a few miles away.” That might be technically true on Google Maps, but to pick somewhere close to my constituency entirely at random—I see the Economic Secretary to the Treasury in her place—in High Wycombe it takes an enormous amount of time compared with how it looks on Google Maps to get into the town centre and back again. If one bit of the criteria needs to change, it is that banks should not be able just to say, “Oh, there’s a bank a few miles away.” They need to look at the time it takes in real life to get from a village to a nearby town.

It feels really strange to agree with so many Conservative Members—it does not make me terribly comfortable, but it shows the power of the argument and, importantly, the support that it has across the House, which is relatively rare. The number of interventions that I have taken has meant that lots of the points in my speech have already been made. I will try to be as quick as possible. Link does a decent job under the criteria that have been set, which really need to be changed. Link can pause a bank closure but cannot stop one, or set its own timetable for the establishment of banking hubs. Moreover, there is no provision for the FCA to initiate retrospective assessments of the need for banking hubs in areas where banks have left the high street, resulting in banking deserts, many years ago, prior to the 2023 Act. The Government simply must take a fresh look at this issue and bring forward the necessary legislation to force the banking industry to fulfil its social responsibilities. The customers and communities from whom they have extracted so much profit over the years deserve nothing less. We should not forget that these are the very same banks and financial institutions that we had to bail out in 2008-09 because of their reckless pursuit of ever-increasing profits. They then made fortunes through the quantitative easing that the Bank of England initiated to save the economy after the crash that they caused. They are now abandoning the very taxpayers who bailed them out. As I mentioned, there has been a dramatic reduction in the number of banks on our high streets. In 1986 there were 21,643 bank and building society branches in the UK; by 2024, around 6,800 were left. Clearly, the switch to online banking has had an impact, but even those of us who use online banking sometimes need the certainty that a branch offers. The House of Lords April 2025 report “Closure of bank branches: Impact on rural communities” quotes Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown: “The closure of bank branches is a vicious circle. The more that close, the more people move online, so there are fewer people relying on high street branches, so more of them close. The pandemic picked up the pace around this ever-decreasing circle, closing more branches temporarily and causing online banking to spike.” The banks say that fewer people are using branches. If a high street branch closes, people cannot use it, as it is not there any more. Does that not result in an automatic reduction in usage? This is not rocket science. It is a vicious circle, which is why we need change from the Government. Northumberland, my home county, has lost more than half of its bank branches since 2015. In my constituency of Blyth and Ashington, the large villages have been left without high street banks for more than a quarter of a decade. Blyth, Northumberland’s largest town, will be left without a high street bank in a few months’ time, though a building society will remain—the point raised by my hon. Friend the Member for Eltham and Chislehurst (Clive Efford).

The hon. Member has been very generous. He mentions building societies, and the Nationwide problem was mentioned. In Harpenden, the hard work of local campaigners has managed to secure a banking hub, despite our having a Nationwide. Does he agree that local communities need access to a full range of banking services that building societies do not provide, and will he join me in thanking Harpenden town council and especially Derek French, who has campaigned on this issue locally and nationally? Perhaps this could be an example that could help other towns to find out how they could get a banking hub despite having a Nationwide.

I thank the hon. Lady for her intervention; I will cover some of those points. I mentioned Blyth, the biggest town in my constituency. The third largest town in Northumberland, Bedlington, saw its last branch close just last month. From August in my constituency, only Ashington, the county’s third largest town, will have a high street bank, but many will wonder how long that will last. Who is affected by these bank closures? Like any change of this nature, is it not the most vulnerable who find it the most difficult? The FCA’s research in 2019 set out how problematic the requirement to travel bigger distances for banking services was for older people, and provided evidence for the slow uptake of online banking services by older people. Only last week, my office was contacted by an elderly gentleman from Guide Post. His local bank closed in 2000. He moved to the branch in Bedlington, a few miles away, where he stayed for nigh on 25 years before that closed. Then he moved to the one in Blyth, a few miles further away; that branch is now to be closed, as I mentioned earlier. He is unable to access internet banking, he does not have any family, and he is unable to travel any further distances, whether by using basic transport services or otherwise.

As others have said, the hon. Member has been very generous. His speech is making me think about vulnerable customers, and access to responsible credit for them. Just a couple of weeks ago, the all-party parliamentary group on fair banking had a roundtable. Actually, online banking services do not help those really vulnerable people, where there is a sense of shame in potentially needing small amounts of help and support. Does he agree that that is something else that we, and the Government, need to consider?

I fully agree with the hon. Lady’s intervention. It is up to us, in this place, to speak up for those vulnerable people. We know that the banks profit and make savings from branch closures. In January 2020, a House of Commons Library briefing pointed to the major banks enjoying a 6% decrease in overhead costs through branch closures. In 2024, HSBC reported the highest net profit among the largest UK banks, reaching just under £20 billion; Barclays followed, with around £6.36 billion; and NatWest’s net profit was approximately £4.8 billion. The big four UK banks—Barclays, NatWest, Lloyds and HSBC—are estimated to have made a combined £44.7 billion in profit. They are not hard up, you know —they really are not hard up. That is why it is important that we, as elected representatives, press that point home to Government. The FCA’s current powers around bank closures have been mentioned two or three times already, and they go to the heart of the issue. Unfortunately, the banks are a law unto themselves. The FCA has no statutory powers to prevent bank closures. It can only seek to influence such decisions through its guidance notes. On branch closures, the FCA guidance requires banks to assess how closures will affect customers, especially those with vulnerabilities, using data on usage trends; consider alternative solutions to customers’ needs, such as free ATMs, post offices and banking hubs; and ensure that customers are given clear information and that they are not misled. Although the FCA cannot stop closures, it can require pauses in branch closures if it is not satisfied that the important matters that I have just mentioned have been considered adequately. Given everything we are talking about, I think that approach fails. Legislative changes are needed to ensure there is much more flexibility in that guidance. Link is a not-for-profit company that is charged with making access to cash available, largely through ATMs. It can charge for using its ATMs and is allowed to charge more in rural areas. Prior to the Financial Services and Markets Act 2023, the major banks ran a voluntary assessment scheme using Link to carry out research into the effects of planned branch closures. The Act made the Link assessments mandatory but did not significantly widen their scope. The Link assessments analyse the impact of branch closures in terms of access to cash, and outline existing and recommended new alternatives, such as banking hubs. In Blyth, which is Northumberland’s largest town, the banks ran out of cash over a bank holiday weekend not many weeks ago. Blyth—it is a massive place—did not have any cash. Can you imagine that? It did not have any cash whatsoever simply because the cash machines ran out and the Morrisons supermarket cash machines were inside the closed store. An hon. Member raised the point about having different cash machines in different places, but if people rely on a supermarket for access to cash, perhaps as a last resort, and it closes at 7pm or 8pm, then they do not have any access to cash.

I congratulate the hon. Gentleman on securing this important debate. To expand on his comment about supermarkets, in Wetherby in my constituency, Morrisons has the only cashpoints and they are outside, but they had run out of cash by Saturday lunch time

That sounds like the same sort of situation as the one we had in Blyth. There were cash machines outside and inside, but the cash machines outside ran out of cash. There were people knocking on the shop windows asking the people who were filling the shelves to get some money for them from the cash machines inside—how ludicrous is that? How ridiculous!

I welcome the point that the hon. Gentleman is raising. There is also an issue with cash machines inside shops that may be open for longer, but they are stocked from the shop by the cash received in the premises. There can be cash machines in a shop that have no cash in them, but Link has to take them into account when assessing whether there should be a free-to-use cash machine in a community.

I totally agree with the right hon. Gentleman’s point. I like bringing school kids into Parliament. Down in one of the corridors there is an ATM that says “Free cash”, and I tell all the kids, “That’s what you get if you are an MP—you can get as much cash as you want from here—it’s free, it’s free!” [Laughter.] And they all ask me if I can get them some cash before they go to their mams. Free cash? There are ATMs where people have to pay a huge percentage to get their own money. That is an issue that I will cover very shortly. My own experience of dealing with Link saw me almost guaranteed that a banking hub would be delivered in Bedlington just before the election, but on receiving the assessment, no such facility was proposed and instead worried locals were asked to travel to nearby Cramlington to conduct their financial affairs. That is not acceptable. It is correct to say that banking hubs are an innovative solution for high streets left without banking facilities, but Link’s briefing note on banking hubs published on 2 June 2025 says: “Banking hubs are shared services that enable customers of any of the major high street banks to access basic banking services and advice from community bankers. Hubs are delivered by a bank-owned company called Cash Access UK, and are currently operated by the Post Office.” The Government have stated that they expect 350 banking hubs to be open by the end of this Parliament. We are well on-track to surpass that figure. Link has already identified a need for 226 banking hubs across the UK, and a similar number of other cash services, such as new deposit services. Over 150 banking hubs are already operational. There is no doubt that that is progress, but we need far more to provide the service that our constituents deserve. The figure of 350 banking hubs might sound impressive, but there are 650 constituencies represented in Parliament. In my constituency alone, banking hubs should be at the heart of the high streets in Ashington, Bedlington, Blyth, Guidepost and Newbiggin- by-the-Sea, but at the current rate, we will need 10 times the amount being talked about by the end of this Parliament. Our high streets have been hollowed out by online and out-of-town shopping.

I congratulate my hon. Friend on securing this important debate. In West Ealing, in my constituency, we have seen all the banks close over the past decade or so. In fact, the town centre itself has visibly declined, in the way that he alluded to. Does he agree that the Labour Government’s decision to permanently reduce business rates for retail and hospitality businesses and to end the scourge of late payments, along with the 350 banking hubs that he mentions, will help revitalise places like West Ealing?

I agree that that will help to revitalise high streets, but the debate this afternoon is about how we assist the people in our communities, mainly the least well off, the disabled and the elderly who simply want a bank to use. As I mentioned, our high streets have been hollowed out, but we can share some community pride—or indeed some community shame—on this issue. We can start a move towards the former by moving much-needed services, like banking hubs, into the hearts of the communities that we all represent. To do so, we need proper regulation of the banks. It should be abundantly clear to anyone who has paid any attention that the banks cannot be allowed to police themselves. The FCA needs proper teeth and the Financial Services and Marketing Act 2023 should be amended to ensure essential face-to-face services are protected alongside access to cash. During the debate on Lords Amendments to the Financial Services and Markets Bill, before it was enacted, the then shadow Economic Secretary to the Treasury, my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), said: “I am disappointed that the amendments will do nothing to protect essential face-to-face services. Analysis published by consumer group Which? found that over half of the UK’s bank and building society branches have closed since January 2015—a shocking rate of about 54 closures each month—which risks excluding millions of people who rely on in-person services for help with opening new accounts, applying for loans, making or receiving payments, and standing orders.”—[Official Report, 26 June 2023; Vol. 735, c. 71.] The Labour party is proudly in power, and I am sure that we will address these issues. We are now in government, and it is time to take action. We need to curb the power of the big banks once and for all. We need to start a review into the impact on communities that are losing bank branches. We need to change legislation to ensure that community factors and face-to-face services are considered when a closure is announced. We need to be bold with proposals for banking hubs by directing the funding, which should come from the banks themselves, to create thousands of hubs up and down the UK. It is firmly in the remit of the Government to do just that, and I urge my hon. Friend the Minister to take the cross-party support that we have seen already today and consider the steps to deliver justice to our communities.

Order. We have shy of 30 Members hoping to contribute, so we will have a hard speaking limit of four minutes to begin with.

13:50:00

I thank the hon. Member for Blyth and Ashington (Ian Lavery) for his persistence, for securing this debate and for the work he has done and is doing to get banks back on the high street. Perhaps we should be grateful to the bankers, because, by their actions, they are the only group of people less popular than politicians. Unfortunately, in their endeavour to become the most unpopular people in the country, they are doing huge damage to our local communities. To put that in context, since 2010 more than 10,000 banks have closed across the country, and there are now only 3,000 bank branches left open in this country. In fact, we have more chance of finding a Labour voter on a farm than we have of seeing a bank in a rural community. The hon. Member for Blyth and Ashington rightly pointed out that the loss of banking facilities has left vulnerable groups, such as the elderly and the disabled, particularly affected and financially excluded. So too are residents in rural areas, where internet access is poor and unreliable. People struggle to get on to the internet to do transactions or for any customer assistance, yet banks continue to withdraw physical services from their customers. When we walk down most high streets, we see that banks have become cafés, bars and pubs. I will focus my attention on Tatton and my local high streets, because the scale of the closures there is stark. In Knutsford, we have lost Santander, Barclays, NatWest, Lloyds and HSBC since 2018, and only Nationwide building society remains. Knutsford is a prosperous town with more than 1,000 businesses operating locally; there is high demand for banking services, yet they have closed their doors. In Wilmslow, the Royal Bank of Scotland and TSB have closed, with only Halifax and NatWest remaining, which are also going to close. That means that only Santander and Nationwide will remain. In Alderley Edge and Handforth, there are no branches at all, forcing residents to travel long distances.

Like the constituencies of Members across the House, Epping Forest has seen a series of bank closures over the years. Tragically, Lloyds bank has said that later this year it will close its branch in Debden in my constituency. Like the banks in my right hon. Friend’s community, that branch is a lifeline; many people rely on it for face-to-face banking and will struggle to get to other branches. Does she agree that banks such as Lloyds need to rethink and stop those closures, and that the Government and Link need to step in and support high street banking?

I agree—the lack of banks is a disgrace. Where do people go for their banking needs? The reality is that the banks that are closing have entered into an agreement with businesses and individuals; when they opened their bank account, they opened it with the bank on the high street. The business was there because it expected a certain amount of customer service—that is why they went there in the first place. Face-to-face banking offers confidence, security and efficiency, especially for businesses handing over cash and making significant financial decisions. Without those services, it just will not work. In 2022, the Federation of Small Businesses found that four in 10 small businesses still relied on cash as a primary payment, and six in 10 needed to make regular cash deposits. I regularly hear from businesses in Tatton that they simply cannot deposit cash or access the basic services needed. Why? Well, that is because 64% of bank branches have closed in the last decade and 65% of cashpoints have gone. That is reducing the ability of businesses to deposit cash in the local area. The shift to online poses risks from technical failures and cyber-attacks. We have heard that through this monopoly and lack of access, there is a squeeze, and commission is being charged for the transactions of these businesses. Our high streets are at the heart of our communities, but without access to banking services, our high streets, which are already under pressure, have become even harder places to trade, grow and thrive. If we are serious about supporting small businesses and seeing investment on our local high streets and in our town centres, we must stop the decline in banking infrastructure. Some may argue that closures would be reasonable if banks were losing money and needed to take cost-cutting measures, but that is simply not the case. Banks are not struggling institutions. Last year, HSBC reported nearly $25 billion in post-tax profits. Barclays made $6.4 billion. Lloyds made $4.5 billion. NatWest made $4.8 billion. Those are all eye-watering profits—

Order.

13:56:00

I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. Too often, I feel the issues that significantly affect the day-to-day lives of our constituents are pushed aside in favour of larger, headline-grabbing national concerns, but this topic of access to banking services—more specifically, access to cash—deserves far greater attention than it receives. While colleagues here will be familiar with my No. 1 concern on the Isle of Wight—ferry connectivity—another issue came up repeatedly during the ’24 general election: high street bank closures. What struck me most was just how deeply that issue resonates with people. Many of the residents I have spoken with feel very abandoned by the institutions they once trusted with their life savings. They are expected to navigate an increasingly digital world, often without the necessary tools, skills or support. The result is a growing sense of exclusion and frustration, which is why the need for reliable, in-person banking services is not just important, but urgent. That is why I am pleased to report a positive development following a meeting with Link last month: a banking hub has opened in East Cowes, with plans for a permanent hub in West Cowes. While I do not claim that that hub alone solves the broader issue of financial inclusion on the island, it is a welcome and tangible step in the right direction. However, we cannot ignore this trend and the anxiety that it causes our constituents. Across the country, rural and coastal communities are seeing their bank branches vanish from the high street. In many cases, residents must travel miles, sometimes without reliable transport, just to deposit a cheque. [Interruption.] Sorry, Madam Deputy Speaker; I was getting overexcited. According to the Financial Conduct Authority, around 1.1 million adults in the UK are unbanked. That is 1.1 million people without access to basic banking facilities—something that many of us take entirely for granted. Additionally, one in 10 adults have no cash savings whatsoever. Those figures should concern us all. I worry especially for the older members of our communities. A 2023 report from Age UK found that three in four accountholders aged 65 and over would prefer to carry out at least one banking transaction at a branch. Those are not people resisting change for the sake of it: they are individuals who genuinely rely on physical, face-to-face interactions for their financial wellbeing. They are disproportionately concentrated in rural constituencies such as mine, where the proportion of residents over the age of 65 is nearly 10% higher than the national average. It is imperative that we do not leave those individuals behind. This is not simply about preserving social interaction for its own sake: we are talking about people’s livelihoods—their savings, pensions and financial security. It is entirely reasonable for individuals to want the reassurance of speaking to a real person, face to face, when managing something as vital as their money. That is where banking hubs come in. These shared facilities provide a practical, community-focused solution. They combine the services of multiple banks in a single accessible location, supported by the post office network. They are staffed by real people who can help with deposits, withdrawals, and even financial guidance. Banking hubs are not just a stopgap; they are a forward-thinking solution that helps us bridge the digital divide, support more small businesses and charities that still rely heavily on cash, and maintain community cohesion in towns and villages that increasingly feel cut off. All of this has reinforced my belief that banking hubs are not just a temporary fix; they could very well be a long-term solution, restoring vital financial services in the areas where they are needed most. Let us ensure that no community—whether rural, coastal or urban—is denied access to the essential services its people need to live with financial freedom. I thank Link and Cash Access UK for their work.

14:00:00

I am most grateful to the hon. Member for Blyth and Ashington (Ian Lavery) for bringing this debate on banking before the House. I think bank closures affect every single constituency and every single person in the country, as we will hear throughout this debate. The final two banks in the town of Wetherby closed literally last month, but we were lucky, in the sense that we knew those closures were coming. I was working with the banks to get a banking hub in for a couple of years, and it has been in place in the town hall. This has given a huge advantage to the town of Wetherby, because the banks that had closed in the past are now represented again in that banking hub. Now that those last two branches have closed, the hub is going to take up residence in one of those ex-banks. That goes to show that if we can get a banking hub, we have the ability to bring things back to the community. The banks that have closed will have a representative in there on different days of the week, and as the hon. Member for Blyth and Ashington pointed out, it is vital that people are able to have that face-to-face interaction. However, in other towns in my constituency—such as Boroughbridge and Tadcaster, which have a huge number of businesses—there is no banking, and there is no banking hub. The residents of those towns have been told that they are close enough to go to other areas, but as has been pointed out, that is not always the easiest thing to do. Then we come to Easingwold, at the further end of my constituency. Nationwide, with its policy of not shutting banks, still has its branch open, so Easingwold does not qualify for a banking hub. People are told that they have to go to Thirsk, a major town that is not easy to get to. As the hon. Member for Blyth and Ashington outlined, there is a problem with the excuse that not enough people are using branches and therefore the banks shut them down. When branches have been shut down in the past and I ask the banks, “Can you please reconsider this?”, they say, “Well, we only had a few people come in last week—we cannot keep it open,” but they never actually do anything to encourage people to go to those branches. They never give an indication that the branch may be shut, and then they just shut it. Of course, people then miss the service, and the banks say, “There is one close by in another area.” As has been described, people are being charged to withdraw their money from a cash machine. As the hon. Gentleman said about free cash, it is their money to start with, but when banks tell people that they have to get a bus to go to the bank, they are also charging people to get their money out. Everything we are discussing passes on the cost from the banks to the consumer, just to get their money out. I am lucky that I have a banking hub in my constituency. Other towns are going to need them—they do bring advantages—but the way that the whole high street industry of banking is operating is causing huge disadvantages to people. Ultimately, it is constantly charging them to get their own money out.

14:03:00

Cash is still alive and well, and for some, access to it is still a necessity—indeed, last year £80 billion in cash was withdrawn from the Link network. However, with the rise and rise of internet banking and contactless payments, we have seen a near-complete withdrawal of bank branches from certain parts of the country. As has been mentioned, there were 10,000 branches 10 years ago; now, there are just 3,000. One of those closures was the NatWest bank in Bakewell, in February 2024. It was not just the last bank in Bakewell; it was the last bank in the entire Peak District national park. In a few weeks’ time, when the Lloyds bank in Ashbourne closes, there will be no banks in the entire Derbyshire Dales constituency—an area of nearly 400 square miles. There are many reasons why people need access to cash, all of which are ably demonstrated by the magnificent market town of Bakewell. Of course, there are residents there on low incomes or benefits, who find it much easier to budget using cash and are less likely to have access to the internet. There is an ageing population there who simply will not want to change, or do not trust the technology. We have had elderly residents taking two-hour round trips on the bus simply to withdraw cash from what was their new nearest bank, rather than use the ATMs in Bakewell. There are several successful markets each week; the traders will all have electronic card readers to take payments with, but despite what the mobile networks may say, people struggle to get a signal in Bakewell and traders often have to ask shoppers to pay in cash. There are also numerous independent shops that serve Bakewell’s 6 million visitors. Those shops need cash to run, and when they queued up for cash at the post office they found that they were being rationed, as it simply could not cope with the demand. Despite all its attributes, Bakewell was turned down for a banking hub the first time around. When I was elected, I went back to Link, which does the assessments and makes the decisions on banking hubs. Over the course of several conversations, I tried to understand what had been missed the first time around. I have to say that Link was very responsive, and after we had submitted another application following a slight relaxation of its criteria on population size, its representatives were happy to come back to Bakewell. I took them to the agricultural business centre to see the livestock markets, where the auctioneers demonstrated to them the staggering number of transactions taking place using cheques. This, I am glad to say, seemed to be the missing part of the puzzle. Back in December, we were told that we had been given a full counter service banking hub—it was the best Christmas present ever. The experience in Ashbourne was completely different, showing that one size does not fit all. The process there was seamless: Lloyds announced that it would close, an assessment was done, the criteria were all met, and I liaised with Cash Access UK over timeframes, locations and so on. I am very glad to say that the permanent Ashbourne banking hub will open on 27 June, and it looks like the permanent Bakewell hub will follow towards the end of July. This will continue the excellent work and growing reputation of the temporary Bakewell hub. A national Cash Access UK report suggests that over 90% of customers believe that banking hubs are extremely important to the community, and the feedback that I get from service users is all positive. The evidence suggests that banking hubs increase footfall and boost the local economy, and I am very relieved that we will shortly have two in the Derbyshire Dales.

The speaking limit is now three minutes. I call David Mundell.

14:07:00

In that case, Madam Deputy Speaker, I will start with my ask of the Minister, which is that the criteria for assessing whether there should be a free-to-use cash machine in a community be reassessed. For example, in my constituency, the Bank of Scotland closed its branch in the community of Moffat on the same day as it closed four other branches. At the moment, Link has to take into account every other cash machine in the vicinity, regardless of whether there is any cash in those machines—often, machines in retail outlets are not fully stocked with cash all the time; they rely on cash coming in through the till to go into the machine—or whether premises are open for 24 hours or are particularly disabled or vulnerable people-friendly. At this moment, we cannot get another cash machine because it has been assessed that the number is sufficient, without any assessment of those cash machines. The closures I referred to mean that for 75 miles along the M74 motorway, from the border to Hamilton, you will not find a bank branch. When it comes to bank buildings being taken up by others, I have not been as lucky as my right hon. Friend the Member for Tatton (Esther McVey): they are often very large buildings on small high streets, and unless the banks are willing to do something themselves, there are not often other users. The Bank of Scotland previously said that it would allow the Peebles branch that is closing to be for community use, and the community have engaged, so I am disappointed to hear that they find today that a “For sale” sign has appeared outside that branch. I hope that the Bank of Scotland will keep that community access. My third point is that we need to join up what is happening. The Bank of Scotland in Sanquhar in my constituency is closing. The bank is putting a bank consultant into the community to look after its customers, it says, but that person will not be in the post office that has been designated by Link as the effective banking hub in that community. That person will hold separate meetings in a council office. There just is not joined-up thinking. My final point is that we talk about post offices when many people do not have a physical post office, but a temporary post office delivered out of the back of a van, which is not capable of providing a banking hub service.

14:10:00

The banks have more or less abandoned my constituency, and it sounds like that is the case for many others. Some 6,500 branches have closed in recent years, as have more than 200 post offices. There are 23 separate settlements in my constituency with no access to banking. We do have banking hubs. It is an hour each way by bus to get to one, and it costs at least six quid to get there and back. I represent large numbers of people living in poverty, and it is hard for them to raise that kind of money just to have access to banking services. I will make two other points about my constituency and then a general point. The bus services are very poor. As I have just said, it can take an hour each way to get to the banking hub, and the banking hub does not provide all the services that a bank should provide. My other point about my constituency is that there are 15 zones for the internet, and 11 of those 15 zones are among the worst for internet provision in the country. How on earth is someone supposed to access banking on an internet system that is simply not working? It shows the extent to which Britain’s infrastructure is creaking, and it is not acceptable that banks should abandon the people who helped to create them in the first place. I will just make this final point about mobility and accessibility. One in four households in my constituency has no access at all to a vehicle. That is more than 20,000 people without a van or a car to get them to a bank, even if a bank were available. It is a disgrace that the banks have turned their backs on all those people who were their loyal customers for so many years. Businesses that rely on cash and collect cash each day have nowhere to deposit it. People are driving home from their place of work or their business with cash in the boot and nowhere safe to put it. That is a dangerous thing. It is odd, ideologically, to hear Members from the party of free enterprise and the free market saying, “We have to do something about capitalism withdrawing from communities.” That is what is happening, and that is the nature of capitalism itself. We should just say that the financial sector in this country is worth £17 trillion, which dwarfs our GDP of £2.5 trillion. The banks are worth eight times more than the total output of the whole UK. As we have heard elsewhere, £44 billion of profit has been made by the banks in recent years. It is time we brought the banks to order to serve our communities—

Order. I call Helen Morgan. [Interruption.]

14:13:00

Sorry, Madam Deputy Speaker; I was so absorbed by the debate that I did not hear you call my name. I congratulate the hon. Member for Blyth and Ashington (Ian Lavery) on securing this debate, which is important. In my constituency of North Shropshire, there are five market towns, but only one will have a commercial banking branch left after the closure of the NatWest in Market Drayton this year. We find ourselves in a situation of managed decline for rural constituents, with essential services slowly removed bit by bit every year. Just two months ago, I attended the opening of the Whitchurch banking hub, which is providing a vital service to a town of around 10,000 people that had lost its final bank branch. While that is great news for Whitchurch and the best alternative to a network of commercial banks, we must consider now those market towns that do not meet the criteria set by Link. For example, the lovely, historic, but quite small town of Ellesmere in North Shropshire has a population of around 5,000 people and 90 commercial units. It is a hub for a large rural area and there is no bank and no prospect of getting one, according to Link, because it does not meet the criteria. Ellesmere still has a post office, which is relied upon by local businesses for cash services. Having been the financial controller of a business in an area served only by a post office, I can tell the House that people need to do more than simply deposit and withdraw cash. Although I was a big fan of Prees post office and village store, if I needed to change the signatory on a bank account or set up a new one, it was a logistical nightmare; if I did not want to post valuable and sensitive documents, it required a half-day trip to a town with a physical branch. For someone in Ellesmere, the nearest town is Oswestry. To visit an actual bank in person is a 45-minute round trip on public transport. Someone living in the surrounding villages is in a difficult situation. Those residents might also have used their post office at some point, but now those post offices are being systematically closed down. In my constituency, from Knockin to Hadnall and from Weston Rhyn to Shawbury, outreach post offices have been closed in one fell swoop with a couple of weeks’ notice. A Post Office representative sounded surprised recently when they told me that outreach services only available for one hour a week were not well used. It seemed not to have occurred to them that if the post office is only available for a single hour, that might not be terribly convenient. I have little time left, so I will just say that for places with poor digital access, where many people cannot access online banking, it is essential that we review the criteria that Link uses to assess the need for a banking hub. A medieval market town that has been serving the centre of its community for hundreds and hundreds of years is on its knees because there is no access to banking. It is essential that we get those services back into high streets to revitalise towns such as Ellesmere and Wem as soon as possible.

14:16:00

I begin by thanking my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. From Farnworth and Kearsley to Walkden and beyond, people across my constituency have seen at first hand the impact of losing high street banks. In Farnworth, for example, last month we saw NatWest on Market Street close on 15 May and Lloyds on the same street close on 28 May. Those were not just buildings, but vital services that people have depended on for decades. In Walkden, we are now set to lose the Halifax branch on Bolton Road. People are telling me that they are worried about how they will manage, especially those who do not bank online. One woman in her late 70s told me: “I never thought I’d see the day when there wasn’t a single bank left in town.” A gentleman in his early 70s said he does not feel safe banking online, and must go all the way into Bolton just to do basic transactions. These things are a necessity, not a luxury for them. The issue is impacting small businesses, too, especially small traders who trade in cash. Some are now forced to drive out of town just to deposit takings. That means lost time, lost footfall and more pressure on our already struggling high streets. That is why I strongly support the idea of banking hubs. They are shared spaces that allow customers from different banks to access services under one roof, with in-person staff available. Under the current rules, Farnworth, which is undergoing a major regeneration, does not qualify for a hub because it has nearby cash machines. A few ATMs do not meet the needs of a whole town; what people need is real, face-to-face advice and service, especially those who are vulnerable or less digitally confident. The criteria set by the Financial Conduct Authority are far too rigid. They do not take account of the local picture, the age of the population, digital exclusion or public transport access. Millions of people in the UK still rely on cash to budget, and last year alone £80 billion was withdrawn through the Link network. That is £1,400 a person. In Farnworth, a local petition has been launched calling for a banking hub that properly serves the needs of residents in Farnworth and Kearsley. Will the Minister please review the true impact of branch closures on communities such as mine? Will they reform the criteria for banking hubs so that they reflect real-life need, not just cashpoint numbers, and will they ensure that face-to-face banking is protected not just in principle, but in practice? It is about managing things fairly.

14:19:00

I congratulate the hon. Member for Blyth and Ashington (Ian Lavery) on securing this important debate. In a world dominated by contactless payments and banking apps, it is very easy for some people to live cash-free and seldom visit a bank, but we must not overlook the 3 million to 5 million people who still rely on cash on a daily basis. These consumers are far more likely to be digitally excluded and financially vulnerable. I recently conducted a cash access survey in my constituency. Some 55% of respondents said that they use cash on a daily basis, and 91% believe the Government should safeguard the acceptance of cash as a valid form of payment. It is vital that access to cash and banking services is protected. It is important for those who use cash, but we must consider the resilience of the wider banking and financial system too. We have recently witnessed a major power outage at Heathrow, as well as large-scale power cuts in Iberia. We are increasingly aware of threats posed by hostile states that want to conduct cyber-attacks to disrupt our national infrastructure, so cash and local banking services must remain accessible to allow society to function in the event of any major disruption. This is a matter of national security. In Bromsgrove and the villages, we are experiencing the effects of changes in the way that people bank. With the closure of Lloyds and Halifax, Bromsgrove high street will have lost four banks in just three years. Such banks are a lifeline for so many small businesses—particularly those run by independent entrepreneurs—as well as for local residents, who rely on banking services every single day. If we are not careful, Bromsgrove risks becoming a banking desert with an increasingly empty high street. I know that Bromsgrove is not eligible for a formal banking hub, so I call on the Minister to review the true impact of the closure of banks across the country, and to review the criteria that a community has to meet in order for a banking hub to be provided. In the limited time I have left I want to draw attention to the further decline of high streets and the important role that banks provide in drawing people into their communities. Banks often occupy some of the most prominent, most beautiful and most significant historic buildings. Once they are vacant, they are often left empty, and they become eyesores and further symbols of the deterioration of high streets, which affects so many of the communities that we represent. I ask the Government to review the criteria for banking hubs, and to focus on serious, long-term business rates reform that will enable high streets to thrive into the future. Collectively, as a House of Commons, we must put pressure on the banking system to ensure that cash access remains a part of our functioning economy, and that as many of our constituents as possible have access to day-to-day retail banking services.

14:22:00

I congratulate my hon. Friend the Member for Blyth and Ashington (Ian Lavery) on securing the debate. South Norfolk is no stranger to the creeping erosion of our local banking infrastructure. In January this year, Lloyds bank announced that it will close its branch in Wymondham, which is the last high street bank in the town. That leaves only a single branch of the Nationwide building society to serve a growing population of over 17,000. The day after the closure was announced, on 30 January, I secured an emergency meeting with Lloyds bank and made it clear that, without alternative provision, the closure would have serious consequences, especially for small businesses, and the data bears this out. Lloyds bank’s own data shows that Wymondham cashpoint use increased by 17% between 2019 and 2024. That is not a service in decline, but a service in demand. It is absolutely clear that a new banking hub must be up and running before the bank branch closes next March. I am pleased to report that this has now been arranged and that the site is currently being finalised. I will continue to do everything within my power to ensure that Wymondham is not left behind. However, this issue is not limited to my largest town in South Norfolk. Loddon lost its Barclays bank in 2017, Long Stratton lost its Barclays bank in 2015, and if we are not careful, the story will be repeated across every rural constituency in the country. For rural communities such as mine, access to cash is not a matter of convenience; it is essential. Many of our villages still experience patchy mobile signal and poor internet connectivity, and when card machines go down or wi-fi drops out, it is cash that keeps the local economy going. We must remember that rural Norfolk has one of the oldest populations in the country. Many residents prefer, or simply need, to manage their money in person. For them, travelling 20 or 30 miles to the nearest bank in Norwich is not going to work. That is why we need to be far more imaginative about how we can ensure that people have access to cash. One idea is to reimagine how we use our post offices and pubs. We all know that pubs are the hubs of our communities in village life, but too many are struggling to stay open. Letting them provide additional services, such as access to cash and postal services, would be a way to keep those hubs of rural village life going. Community banking should not be something that we fight tooth and nail to preserve; it should be the backbone of a fair and functioning economy. Our rural towns and villages should not be told that their need is out of date or out of scope. I will keep fighting for that in Wymondham, Loddon, Long Stratton and all the villages of South Norfolk, and I know that many of my hon. Friends will be doing the same for their rural communities.

14:25:00

I thank the hon. Member for Blyth and Ashington (Ian Lavery) and the right hon. Member for Tatton (Esther McVey) for bringing this debate before us today. I want to make a few comments. I agree with the hon. Member for South Norfolk (Ben Goldsborough) that access to banking services is a major issue in rural constituencies, but it can also be an issue in urban constituencies. In parts of my constituency, which is wholly urban, some communities have been left without banks. Owing to the way public transport works and its unaffordability in some places, accessing banks can still be hard, even if people live in a community that is part of a city, so we need to make sure that we are looking at this issue as a whole in all the communities affected. Public transport can be a significant issue. Where capitalism fails, we need market intervention—that is what should happen. We need more market intervention to ensure that there is at least a minimum, if not a universal, banking service. A number of the banks that have closed in my constituency have said, “It’s okay, because people will be able to go to the post office.” However, the post office in Seaton has closed, and we have been fighting for years to get a new post office in the community, but nobody is willing to take it up. That community is left without either of those services, and people have to travel. In common with the hon. Member for Normanton and Hemsworth (Jon Trickett), a significant proportion of my constituents—at least a third—do not have access to a car, and getting around the city and to the bank can be pretty difficult for them. We have universal service obligations when it comes to broadband and to Royal Mail delivery, but we do not have them when it comes to post office services and banking services, yet cash is incredibly important. The right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) mentioned access to cash, but that is not the only reason we need banking services. There are some things that can only be done in a bank—whether that is businesses depositing the cash that they have taken, people taking cash out of a cash machine, or individuals signing forms to approve a loan or a mortgage. Some of those things can only be done physically in the bank, including things that people need to do only once a year. Someone living in Banff, Aberdeenshire, will have to spend an hour and a half to two hours on public transport to get into the city—a significant length of time. As the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) said earlier, we are charging people for that privilege. Even though it might be free to withdraw cash, the public transport that they need to take in order to get to a bank is not free. I urge the Government to look at the minimum services that people need in order to access cash and banking services that are close to them, and that they can access by whatever method of transport they happen to have. Could the Government please take action on this?

14:28:00

I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for bringing this really important debate to this House, and I think we speak with one voice on this particular issue. We both represent post-industrial towns, and we can both see the decline of our high streets. Banks have long been pillars of our high street in supporting local businesses, sustaining jobs, and driving regional growth and economic stability. In an increasingly digital age of contactless payments and banking apps, it is easy to underestimate the value of physical bank branches in our town centres. With the ongoing closure of trusted high street banks, many communities are being left isolated and underserved, so banking hubs can provide vital in-person services, particularly for older residents, those with long-term health conditions and people at risk of economic abuse. I feel that we need to speak further about this subject and I will write to the Minister, because economic abuse and financial inclusion are really big issues. Organisations such as Link play a key role in supporting the transition to a digital economy, having committed to ensuring 98% of people have reasonable access to free cash services. However, this commitment does not go far enough for areas such as Atherton and Golborne—two places with ageing populations, active local businesses and expanding communities. In Golborne, 18.6% of residents are over 65, the second-highest area in the Wigan borough. Atherton, with a busy train station and a thriving night-time economy, still has no remaining bank. Significant housing developments in both areas are further increasing demand for financial services, yet the infrastructure continues to shrink. Atherton residents often travel to Leigh for banking, leaving their own town centre with declining footfall and empty retail units. Although evidence-based proposals for banking hubs have been made, recent Link assessments did not recommend any new cash services in our area, leaving people excluded and unheard. Will the Minister confirm whether the Government are reviewing the assessment process to ensure that such communities are properly heard and their needs fully met? In looking to the future, I urge the Government to consider the inclusion of credit unions, a co-operative model of banking such as the Unify credit union in my constituency, as part of their wider financial inclusion strategy.

A point that has not yet been made is the importance of credit unions and access to responsible lending. One thing that people can do at a high street bank but cannot do at a banking hub is get a loan, so I am grateful to the hon. Member for mentioning credit unions. In my area, Nationwide on the A6 in Hazel Grove has shut, which is having a massive impact on what people can do beyond access to cash.

I agree with the hon. Member, and Unify credit union in my constituency does give out loans in an ethical way to community organisations and people who are struggling. Banking hubs are not just about financial transactions; they are also about sustaining the health, growth and regeneration of our towns. Let us ensure that we are protecting the digitally excluded, supporting the financially vulnerable and doing everything possible to keep our high streets alive.

14:31:00

I start, as my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) did, with an ask of the Minister. As she will have heard, this issue is apolitical, and we are raising it very much because we care about our communities. Can we increase the flexibility for banking hubs to be rolled out throughout the country? I apologise, because I should really have started by congratulating the hon. Member for Blyth and Ashington (Ian Lavery) on securing this important debate. In South West Hertfordshire I have seen the decline of high streets, including a reduction in the number of banking branches. Nationwide, which has been mentioned, deserves credit for proactively retaining its high street presence, which does help my residents and, I am sure, others across the country. In Rickmansworth in my constituency, the local post office manager, Danny, has stepped up and is now managing a banking hub, which allows my residents access to the frontline banking services to which they would not normally have access. I am also working alongside two of my councillors in Abbots Langley—Councillor Vicky Edwards and Councillor Ian Campbell—and I hope the Minister will encourage the powers that be to see that, where there is a real need for communities to have a banking presence, banking hubs are an obvious solution. If we want our high streets to remain viable, we need to encourage people to continue to come down to the high street. Historically, that has meant services such as banking. That will, I hope, increase footfall for our local cafés, hairdressers and all the other services associated with the high street. We have heard about the 6,300 banks that have closed since 2015. I am a former retailer, and I understand that high streets change, but from a policy perspective, Parliament needs to create the framework that ensures high streets are as we want them to be. If we do not proactively encourage banking hubs to be in the centre of our towns—yes, ATMs are important, but they are typically in places such as out-of-town petrol stations—we are not helping small retailers and convenience stores that rely on emergency purchases of a pint of milk and the like. I will close, because I am conscious of the time, with a pledge from me—and, I hope, those on my Front Bench—that if the Government step up and say they will increase the flexibility of banking hubs, they will have our support, because cash remains king. We have spoken before about digital exclusion, and it will have a massive impact on a minority of our population if we do not get this right.

14:34:00

I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. Access to cash is important, but it is only one part of the story. The closure of bank branches strips communities across our country not just of access to money, but of access to advice and support services that cannot simply be replicated online. It goes further than that. For some elderly residents this is about a sense of community and purpose, such as the weekly trip with friends to interact with others, plan a food shop, go to a supermarket or even visit friends. I remember when I was a child, when my grandfather was due to make his regular trip to the bank, he would get suited and booted, have a haircut and tell us all proudly that he was off to the bank. It was also the highlight of my week, because I always received a £5 note afterwards. In my constituency of Gillingham and Rainham, I was pleased to announce only last week that we will be getting a banking hub, following a recent campaign. For clarity, we do have a Nationwide on site at the minute. I have heard directly from residents about how much this means to them. I have received numerous letters describing their struggles when they have not been able to access banking services. Many residents have described long journeys to neighbouring towns, often relying on friends or public transport just to withdraw cash or speak to somebody in person. Other residents have spoken of the confusion and anxiety caused by using online banking that they neither trusted nor understood. We are talking about people who find themselves in effect locked out of the system simply because they do not use an app or a smartphone. These are real people in our communities, not a small minority. According to Age UK, more than 2.5 million people over 65 have never used the internet, and the access to cash review found that around 10 million UK adults would struggle in a cashless society. Many of them also lack digital literacy or the infrastructure to bank online. This includes people with disabilities, carers, those for whom English is not a first language, and people living on low incomes who cannot afford broadband or mobile data. We should not expect them to adapt to a system that was not designed for them in the first place. The reality is that high street banks have for some time been taking decisions based on commercial viability rather than community need. I understand that banks are not charities, but the Government do have a responsibility to ensure that no one is cut off from basic services because they are not digital or because they are not profitable. If we want to prevent digital exclusion from becoming a permanent feature of our society, banking hubs must be part of a national strategy. That includes ensuring they are well-promoted, well-resourced and available in all the places of greatest need. I am pleased that my constituency will benefit from a banking hub, but we need to go further. The criteria need to change, and we must ensure this is based not just on access to cash but, importantly, on the services that banking hubs provide to a community.

14:37:00

It is clear that we all care about our constituencies. My constituency of North East Fife is well below the UK average in the statistics on access to cash. The new powers and obligations given to the FCA under the Financial Services and Markets Act 2023 have gone some way towards addressing these problems. It is important to remember that everything happening before was voluntary. We have twice gone through the review process with Link—successfully in Anstruther, but frustratingly not so in Cupar. The Anstruther banking counter is to some extent a success story. The banks closed and the post office closed, but a review was carried out and recommendations were made for a counter providing cash deposits and withdrawals. However, there were some problems with the process that I hope can be ironed out. The review was requested by a local organisation that had hoped to provide space for the counter, if recommended, knowing that a lot of its customers use cash and there is no nearby ATM, but it was not automatically advised of the outcome of the assessment and found out only after the fact. That meant it did not get the chance to make an input to those making an assessment of possible locations. I myself was not aware of the opening of the hub until I heard incidentally from a local councillor who was involved in the running of the location where the hub opened. If elected representatives and the local media do not know about counters opening, I am very concerned that the public will not know either. However, the main issue, which many have picked up, is that the cash counter is not a banking hub. Part of the picture, as I understand it, is that we could have more support in Anstruther if someone was willing to take on the post office, but no one wants to, and having met the National Federation of SubPostmasters earlier this year, I can understand why. This is a problem that the Government need to address and I hope the Minister can do so in her remarks. What are the Government doing to make taking on a post office more attractive? They are vital to the success of banking hubs, but also the health of communities more generally. The other part of the picture, as others have touched on, is that the legislation only requires maintaining access to cash, not banking services. That is a real oversight. I mentioned, in my intervention on the hon. Member for Blyth and Ashington (Ian Lavery)—I congratulate him on securing the debate—that the all-party parliamentary group on fair banking gave us some quite worrying stats on the financial health of household incomes. It is incumbent on banks to help people better manage their finances so that we do not end up with situations where people are in debt. I asked the Minister whether the financial inclusion committee, which she chairs, would look at access to banking services. I hope she will be able to update us on that today. The last point I want to make, which others have mentioned, is about the challenge around ATMs. We have had a big problem in Leven where, in just the last few weeks, the final bank has closed. We have a Nationwide, but it consistently runs out of money and customers are really showing their frustration. Whether it is more cashpoints or more replenishing of what is already there, something has to be done. The assessments need to take better consideration of what cash usage actually looks like in an area.

14:40:00

I congratulate my hon. Friend the Member for Blyth and Ashington (Ian Lavery) on securing this important debate. In just the last two years, Bitterne Precinct in my constituency has lost four high street banks and, unfortunately, Nationwide building society. Add to that NatWest in 2023, and now Halifax and Lloyds both close next Monday. These closures are leaving a community which, by Link’s own assessment, counts 32,000 people among it with no branch banking provision at all. We all recognise that technology has changed the way we bank, and mostly for the better, but it is not always a substitute for in-person services. People still need to deposit cash, sort out complex issues, or just get advice from another human being. For too many, this is not about convenience; it ends up with them being cut off. Let me share some words from my constituents I spoke to in the precinct. Kayley, a former bank worker in Thornhill, told me: “Some customers are unable to access online banking…visiting the bank is their only human interaction that day. Face-to-face service is imperative.” Mandy from Bitterne described how her elderly, blind mother broke down in tears when she learned her local branch would be closing. Mandy said: “Banking in Bitterne gave her a lifeline. It kept her independence. She doesn’t bank online because she can’t see the screen, but she can still walk into Bitterne to manage her affairs.” Frederick, another resident, highlighted the rising cost of exclusion, and I wonder if we have really counted that in. He said: “A banking hub would put money in people’s pockets by saving them the cost of taking Ubers or buses just to withdraw cash.” Link tells us that a post office can be a substitute, but our local post office has no outside cashpoint and it cannot cash certain cheques, so when Halifax and Lloyds close next week there will be no outside cash access in the entire area and no high street banks on the entire eastern side of Southampton. I therefore welcome the Government’s commitment to roll out 350 banking hubs over the next five years, but I want to be clear that Bitterne should be at the front of that queue. It would not only restore access to banking, but help—others have eloquently made the point—to secure the future of the high street, support local businesses and protect residents from financial isolation. Hundreds of people have signed my petition to bring a banking hub to Bitterne, and many more have written to me. Like others, I met Link. I have to share my frustration with the House about how the reviews are being conducted. The Link survey suggested that my constituents could quite easily take a bus into Southampton city centre in 12 minutes. That is for the birds. If they do it in the dead of night with no traffic on the road and ignoring the speed limits, then maybe, but it can take up to 90 minutes to do that round trip. Let us set up the banking hubs to succeed. I ask the Minister: how are we going to achieve that manifesto commitment when we are essentially outsourcing it to Link? Let us invest in solutions that do not leave anyone behind and let us bring banking back to Bitterne.

14:43:00

I commend the hon. Member for Blyth and Ashington (Ian Lavery) for securing this important debate. Like so many places across the country, bank branches have closed at an alarming rate in my constituency. Not so long ago, residents could pop down to a branch of every major high street bank in the towns of Waltham Cross, Cheshunt and Hoddesdon. Just last week, Halifax became the latest bank branch to shut its doors in Waltham Cross, while in Hoddesdon the former site of the Barclays remains empty, a scar on an otherwise vibrant town centre. In my town of Cheshunt, a town of 40,000 people, not a single bank branch remains. That simply cannot be right. The lack of in-person banking facilities is depriving people of access to vital services. For so many older and vulnerable people, it is causing huge difficulty and frustration, as they are forced to rely on digital services such as apps and smartphones.

My hon. Friend makes a powerful point, and I particularly wish to draw his attention to the plight of blind people. Royal National Institute of Blind People research in 2023 found that 28% of blind and partially sighted people never used the internet, they struggle with ATMs, and they struggle too with travel to banks.

I completely agree with my right hon. Friend. It is really important that we expand the rules to get banking hubs in more locations across the country. Not least of all, my nan does not do online banking. Every time I go and see her, she badgers me about it. She will specifically bank with someone where she can have face-to-face services, because she will not do online banking. It is a real struggle, because some banks say, “Well, you’ve got to telephone.” But even then, one has to have a smartphone to get a code on the app for security, so it is very difficult for our older and disabled constituents to access those vital services. When Barclays went from the high street in Hoddesdon, it did a “Barclays local”. Through the good work of my Conservative-run Broxbourne council, we managed to get it into the Spotlight, our local theatre, but it is cashless. That is nonsense! Its bread and butter business as a high street bank is to deal with cash and get people access to its cash and banking services, but it wants to run a service that is now cashless. We tried in Cheshunt—as I said, a town of 40,000 people with no banking services—to get the NatWest banking van at the car park of our Laura Trott sports centre, but again it would only offer a cashless service. This is bread and butter to the high street banks. They should accept cash and we should bring forward legislation to ensure that our constituents across the country have access to banking services. We need to look at the rules, because waiting until the last bank is in our high street does not promote consumer choice or solve people’s banking and access to cash needs. On buses, my constituents are lucky if the bus even turns up—we get one bus once an hour—so including public transport in analysis of banking hub locations is unreliable. We need to widen the criteria to enable more banking hubs to be opened up across the country.

14:47:00

I congratulate my hon. Friend the Member for Blyth and Ashington (Ian Lavery) on securing such an important debate. Next week, the Lloyds and Halifax branches in Welwyn Garden City will close their doors to customers for the last time. In Hatfield, we have already lost every bank branch from White Lion Square in the centre of town. As we have heard today, this is a wearily familiar story in communities across the country. Regrettably, I must start by sharing my experience with Lloyds Banking Group. On its website, it talks of a “commitment to putting customers first”. I am afraid my experience, on behalf of residents in Welwyn Garden City, left me feeling that we were just another cog in the corporate wheel. Earlier this year, my office was informed of the closure of Lloyds and Halifax in Welwyn Garden City barely an hour before they hit send on the press release. The management did respond to my firmly worded letter demanding a meeting, and, in person, I made it clear that if the closure could not be overturned, I wanted to work together on a bespoke option for a community banking service. I suggested Welwyn Garden City library as an appropriate community venue, and said if that option was pursued, there should be no barriers to running a regular service, given the extremely low cost to Lloyds of hiring a room. Lloyds needed frequent chasing to respond afterwards, and eventually came back with its standardised offer: a community banking service in the library, but open just once every fortnight. That is its national policy, so Welwyn Garden City is in no worse or better a position than any of our neighbours, but I am left with the impression that Lloyds was never serious about a bespoke solution for our town. If Lloyds Banking Group is listening or watching today and wants to think again, I will happily take a call as soon as I leave this Chamber. As other banks and building societies close, it is the role of Government to accelerate the roll-out of banking hubs. In Hatfield, we have a temporary banking hub at the post office in White Lion Square, and I know that Cash Access and Welwyn Hatfield borough council are working towards a permanent home. Some people will always want to have face-to-face conversations about their finances. The hub model is here to stay—a service underpinned by the state, via the Post Office, which we need in communities across the country. I am equally convinced that the way banks and building societies navigate this period of change might lead to customers being increasingly open to switching. I commend Nationwide for its national commitment to keeping branches open, and note with interest that the Current Account Switch Service found last year that nearly 1.2 million Brits switched their current account, with Nationwide the beneficiary of the most net switches. The challenge for the retail banking industry is to show they take seriously the need to engage with customers who want and need in-person support, and those who succeed might find that doing good is good business. However, where business has a choice to make, Government have an obligation. Let us fast-track our plan for banking hubs and redouble our efforts to ensure that no community is without one.

14:50:00

I thank the hon. Member for Blyth and Ashington (Ian Lavery) for securing this debate. One of the most meaningful moments I have had so far as a Member of Parliament was hearing the elderly residents of a nearby care home thank me for securing a banking hub in Ystradgynlais. That hub is now open and working, providing an essential service to residents and small businesses, many of whom were previously facing long and expensive journeys just to access basic banking services. The local response has been overwhelmingly positive, with many residents saying that the bringing back of those banking services is the first time they have seen their community restoring services in many years. The opening of this hub did not happen by chance. I put on the record my thanks to all the staff at Link and the regulator who engaged with us throughout the process. They took the time to understand the community’s cash and banking needs and sought to find a solution. Their involvement was constructive, and I commend them for it. That is how an effective regulator can make life better for ordinary people by reining in corporate greed. If the Government are looking for ways to win back favour, surely committing to more banking hubs must be one of them. The Government have committed to 350, but in reality, as we have heard, the country needs far more. The demand is there and the model works, but the current framework is far too restrictive. I have submitted applications for new hubs in my constituency in Pontardawe, Brecon, Presteigne and Builth Wells, each of which has a clear case. We need a system that supports those applications, instead of holding them back through outdated rules and artificial limits. In Brecon, we have one final bank branch remaining. In Hay-on-Wye—a town blessed with a bustling high street and a number of independent businesses—not a single bank remains. Elsewhere in Radnorshire, Presteigne saw its last bank close earlier this year, and Rhayader is troubled by community bankers who do not wish to visit it. In Pontardawe, in the Swansea valley, Lloyds is due to close the final remaining branch later this year citing a lack of footfall, despite queues from the door to the counter. All the while, banks continue to report billions of pounds in annual profits and rising dividends. They say they have no option but to close these branches because of the digital transformation, yet some of them cite statistics showing that up to 50% of their customers still need physical services. The banks have fundamentally changed their service offering. Who would now deposit their life savings with someone that offers to meet them in a car park once a week? That is what Charlie Nunn, the CEO of Lloyds Banking Group, has done to his customers in Presteigne, Brecon, Ystradgynlais and now Pontardawe. He took home a staggering £5.6 million last year, having closed more than 140 bank branches to save his company some overheads, and managing to bump up the Lloyds dividend by 13%. Does he deserve that? Does he know the misery he has caused people in doing so? Will he stop the closure of the Pontardawe branch, something that more than 500 local residents have called on him to do?

14:53:00

I do not intend to labour too long on rehashing points that have already been made. I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing the debate and the Backbench Business Committee for scheduling it. It is very clear that access to a physical bank is important for many people in our communities. My constituency, like those of colleagues present, has not been spared the loss of banks. In Lichfield, we have recently lost our Barclays branch, but up the road in Burntwood we have a much more difficult situation: every single bank branch has been closed for a number of years. The community has stepped up, as it so often does in Burntwood, and the post office has filled the breach. There is some access to banking services, but that is not the same as a physical branch. As I sit and listen to the debate today, I realise that there is one word that sums up the importance of this matter—regeneration. Burntwood has a high street that is almost ready to go. Some businesses are thriving and the footfall is massive, but there is not the investment to make it kick on and become a town centre of which the whole town can be proud. In Lichfield, where the banks are more present, there is a thriving cafe culture. Although everything is not all sunshine and rainbows in Lichfield and it never will be, we can really see the difference in the two town centres. What we are seeing here is almost an unvirtuous circle, where high streets start to struggle, footfall drops off, banks start to struggle and withdraw, footfall drops further, shops struggle more, and so on. It is a spiral to the bottom.

The hon. Gentleman is becoming an hon. Friend. What happens is that the banks encourage their customers to do things online. You cannot open an account in a branch—where branches still exist—and then say that online banking is replacing face-to-face contact.

It is important to say that internet banking is not going away. These two ideas—face-to-face banking and internet banking—should be two sides of the same coin. All our high street banks should recognise that they have a responsibility to both ways of working. I prefer to bank online because I am busy and spend half my life on trains, but there are people who do not have that luxury, as they are technologically reluctant to engage. I hear many people ask the Government, “What can we do to get more banking hubs? What can we do to encourage more physical banks?” That is something that I would support, particularly for towns such as Burntwood, where bringing those banks back could be that spark of regeneration—the thing that starts to reverse that unvirtuous circle, so that it becomes a virtuous circle, where those banks are present and they drive footfall: it is easier to get cash, easier for businesses to bank there and easier for the high street to come back. We all know that the high street is the physical representation of how people feel the economy is going. One reason people are so worried about the economy is that our high streets have been failing for decades. Governments have not supported high streets for far too long, and I am proud that this Government are saying that they will now do so. Getting banks back on to the high street, where they belong, can be that first step for towns such as Burntwood and the others that we have heard about in today’s debate.

14:57:00

I thank the hon. Member for Blyth and Ashington (Ian Lavery) for securing this debate. In my constituency of Farnham and Bordon, the situation is stark. Although I welcome the fact that we have secured a temporary banking hub in The Shed, in Bordon, on the Hampshire side, it rapidly needs to have a permanent location. In Liphook, there is no banking hub, no agreed plan and no clear process for securing one. Across the border in Surrey, in Haslemere, we are fortunate to have one of the 100 national hubs up and running, but in nearby Farnham, Barclays has just gone and Santander goes next month. All this means that more than 100,000 people across my constituency have not a single bank and only one building society. Constituents are right to be concerned. Link, the UK’s main cash access body, has stated that Santander’s closure will have, “no significant impact on the community”. I strongly disagree; it absolutely will. This cannot continue to be a postcode lottery. Banks were once embedded in towns and communities but now they are being erased with little left behind. Banking hubs are a partial answer, but the system needs reforms. The process is slow, the criteria too narrow and the scope of services too limited. Hubs must be located centrally, open five or six days a week, accessible to those with limited mobility and reachable without a car. They should serve both individuals and small businesses and, crucially, offer face-to-face banking, not just cash points and machines.

In a society where collective trust is depleting, does my hon. Friend agree that the presence of face-to-face banking services and banking customers being able to have a direct in-person relationship with real people is one step that we can all take to help rebuild collective trust in the institutions that underpin society?

I entirely agree with my hon. Friend; he makes a very convincing point. When we are dealing with something as vital as personal finances, it should not be too much to demand to see a person face to face. The legislation we rely on to manage access to banking, including the Financial Services and Markets Act, remains focused almost exclusively on access to cash, not access to banking services. That distinction matters. Depositing takings, seeking support with financial abuse and getting advice are all services that cannot be delivered by a machine. Even when residents are confident and willing to bank online, they are often held back by something much simpler: their connection. In many parts of my constituency, mobile coverage and broadband access are so poor that digital banking is unreliable, if not impossible. The digital divide is no longer just a social challenge but a financial one too. Older people, disabled people, rural residents and small businesses all deserve access to a banking system that works for them, not just for those who are already digitally fluent or living in better-connected areas. That means that physical services, in-person advice and real access to cash must remain part of the infrastructure of modern life. Will the Minister work with Link, Cash Access UK and local authorities to accelerate the roll-out of banking hubs? Will she expand the remit of the Financial Services and Markets Act to protect access to full banking services, not just to cash? Finally, will she meet me to discuss how we can support the roll-out of permanent, accessible banking hubs in Liphook and Farnham? No one should be excluded from essential financial services because of their postcode, their age, or the strength of their wi-fi signal.

15:01:00

I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. For five years, I worked as a support worker for children with autism across the north-east, and I have many fond memories of his constituency, in particular Blyth beach. The communities we served there as support workers often had complex needs, and in many ways they were some of the people who were most vulnerable to the digital-by-default approach to public services like banking, which has been one of the excuses for high street bank closures and one of the reasons for public anger at the loss of services. It was a huge privilege to spend that time working with young people with disabilities, and I learned so much about humanity and community. I also learned about the state’s role as an essential safeguard and why we need to build inclusion and safeguards into planning. Banking is no exception. I have been really encouraged by this Government’s work on banking hubs as a way to mitigate banking closures, but it is clear that far more needs to be done. While the debate understandably focuses on more rural communities, I echo the comment of the hon. Member for Aberdeen North (Kirsty Blackman) that it is a myth that this sort of disenfranchisement is exclusive to rural areas. I have seen the barriers at first hand, whether in my experiences as a care worker or from trying to convince my younger brother to change his behaviour. He has autism, and it is not the easiest thing to try to get him to do something new. Changes that I and many others take in our stride are profound and insurmountable for some, and I urge my colleagues in Government to be ambitious in fostering more inclusive services. We should set the bar high for inclusive services in this country. While I am a big fan of digital transformation and consider myself to be a tech evangelist, changes cannot and must not come at the expense of people who cannot or choose not to engage. The issue of high street bank closures in my constituency is keenly felt in Worle. Despite the valiant campaign led by the formidable Jill Leahy to keep the Lloyds open on Worle high street, we could secure only a short stay of execution, and now Worle is without a bank. To compound this, the post office in north Worle closed recently. What is left is a growing sense of frustration among residents, especially older people and those with disabilities, who may not be comfortable with using or able to use online banking for digital payments. For them, face-to-face services are not a preference but a necessity. Following the campaign by Jill, local campaigners such as Sally Heap have recently been working hard to advocate a banking hub in Worle. We are hoping to be successful in that bid, and I have written to the Minister to put my support behind Sally’s campaign. I urge the Government and financial institutions to listen carefully to constituencies and communities like mine. A new banking hub in Worle would be a lifeline not only to individuals but to the resilience and prosperity of the town. Let us make sure that our high streets have a future and that no one is left behind in the rush to become digital-first, which works for many but leaves some of our most vulnerable in an intolerable situation.

15:04:00

In the last five years, 11 bank branches have closed in my constituency, leaving most towns without traditional banking facilities. For example, two years ago the closure of Barclays in Chalfont St Peter triggered the assessment for a formal banking hub. While I recognise that alternative provision is now delivered by the post office or in small pop-up locations on an appointment-only basis, those alternatives do not go far enough. They are unable to meet all needs, forcing people to travel further afield to find basic banking services and advice on mortgages and debt—and, as the Minister will be all too aware, asking people to rely on a bus network that is increasingly cutting services. Link found that Chalfont St Peter did not meet the criteria for a banking hub, yet one in five people there is over the age of 65, and Age UK found that 40% of over-65s with a bank account do not manage their money online. Some of my constituents in more rural areas also face broadband connectivity issues, restricting their access to online banking. My plea to the Minister echoes the calls already stated to review the criteria by which towns are assessed for banking hubs. Accessibility gaps must be considered, including access to broadband, and whether residents have adequate access to not only cash—the current criterion—but in-person banking services.

15:06:00

I congratulate the hon. Member for Blyth and Ashington (Ian Lavery). It is an honour to speak about the impact of the decline of local bank branches, which is an issue of such importance to my constituents. The closure of the Santander in Rustington is just the latest blow. The need for a robust and fair system of banking hubs is urgent. High streets have changed beyond recognition. Once, we had Barclays, NatWest and Lloyds on every corner. Now, 6,300 branches have closed since 2015, which is a 64% fall. Cash use may have dropped to 14% of payments, but millions still depend on it, especially the elderly, the disabled and the vulnerable. In places like Rustington, entire communities have been left without local banking. Some are forced online against their wishes, even when they cannot afford the technology or cannot physically use it. At the same time, they are increasing their exposure to phishing attacks. My constituent Roger Mallock has lost a life-changing sum of money to cyber-scammers. Post offices cannot fill the gaps; the queues are longer, and they cannot handle complex banking needs or take large cash deposits. Despite my appeals to Link, Rustington was denied a banking hub. I raised the matter directly with the Prime Minister and the Economic Secretary to the Treasury. As one constituent put it: “Banks are licensed by the Government. Those licences should come with a duty to maintain local branches.” Consider a Ukrainian couple who came to Bognor Regis under the Homes for Ukraine scheme. Thanks to the Santander branch, they opened accounts, and they continue to rely on in-person support due to language barriers; without it, they would lose hours from work and face serious barriers to managing their finances. They are not alone: many elderly and less mobile customers depend on face-to-face services. Banking hubs offer a limited solution. Only 108 hubs are operational out of the 224 planned, and they can take up to 12 months to open. Worse, the FCA’s rules are too narrow, focused only on cash rather than on broader services. The last Government introduced the Financial Services and Markets Act 2023, which was a start but does not go far enough. Banking is not a luxury; it is a lifeline. We must ensure that digital innovation does not leave millions behind.

15:09:00

At the risk of disappointing the hon. Member for Blyth and Ashington (Ian Lavery), I rise not entirely to criticise the banks, which have done tremendous work on apps and the like, and many people—not all of them spring chickens—make great use of them. But as banks retreat from bricks and mortar locations, a problem is that even silver surfers who are comfortable with the technology may simply not be able to get the relevant app to work. In rural Dumfries and Galloway, we have too many notspots, where the mobile phone signal is sketchy at best and non-existent at worst. Similarly, there is a lack of decent broadband. The ground truth is that while it might be easy-PC for some to get online, sclerotic broadband and thick stone walls designed to keep out the Scottish damp make too many computers and smartphones expensive placemats. The need for access to face-to-face banking services remains high, as we have heard. As we have also heard, there are numerous issues with the current banking hub regime. Take Wigtown in my constituency: it is Scotland’s official book town, yet the current banking hub criteria fail to capture the significance of that. Wigtown is evaluated on its modest resident population, with no account taken of the huge influx of visitors when its famous book festival opens its covers. I have a stream of reports of the town centre cash machine running out of spondulicks outwith the festival and anecdotal reports of people gathering for a trip to the nearest hub in Newton Stewart to lift their pensions. That hub is 12 miles distant, and notwithstanding our positively balmy climate in Dumfries and Galloway—no, really—it is not walkable. As for the public transport system, let us just say that we need a calendar and not a stopwatch to time the buses. When Dalbeattie, the third biggest town in my constituency with a population of more than 4,000 souls and a slew of thriving businesses, struggles to get a banking hub, surely there is a compelling case for lowering the threshold for hubs. I accept that we cannot have an ethos of “wherever two or three are gathered, there shall be a banking hub”, yet equally, we cannot expect one ATM to carry the banking needs of hundreds, if not thousands, of people. Banking has come on in leaps and bounds since the days of little pens chained to counters and limited opening hours, but on balance, too many people are being left behind in the technological revolution. American banker Felix Rohatyn, who rescued New York from financial disaster, said: “banking is not simply about profit, but about personal relationships.” Even in this digital age, we need to capture some of that spirit via our banking hubs.

15:11:00

I congratulate the hon. Member for Blyth and Ashington (Ian Lavery) on setting the scene and on his introduction of the issue. As an MP for an area that has been hard hit by the removal of 11 banks, first in rural villages and now increasingly in even the main towns of Strangford, the issue is incredibly important. We need the regulation of access to banking services in legislation and to stop the drain towards online and city-centre banking only. Millions of people in the UK still rely on cash day to day; in fact, some 1.1 million people in the UK remain unbanked and rely entirely on cash, while more than 8 million adults report that they would struggle to cope in a cashless society. A YouGov survey found that nearly 28% of small businesses use cash at least weekly. The British Retail Consortium has shown a rise in the use of cash for the second year in a row to 20% of transactions in 2023, as more and more people use cash to manage their budgets in a difficult economic environment. While closing branches, banks have managed to increase their profits by some £2.5 billion. It is clear where their focus is. However, once the banks are closed and the profits are allocated to shareholders, how will they continue to up the profits? What services will be removed next? The percentage of branch closures is lower in larger and medium-sized towns and highest in villages and smaller communities, at 50% and 70% respectively.

That is why the Link criteria need to change, is it not? The trouble is that rural areas are disproportionately damaged by the fact that the population size is not big enough. People cannot get access to banking in The Deepings, Long Sutton, Donington and elsewhere in my constituency. I am sure it is the same in the hon. Gentleman’s.

The right hon. Gentleman is absolutely right; that is replicated not just in his constituency and mine, but probably in those of everyone here today. Those in rural areas are twice as likely as those in urban areas to depend on their local post office branch for cash and banking services. With 11 banks closing and two banking hubs opening, we depend more than ever on the post office. We have credit unions but what we can do with them is very limited, despite being very welcome. While bank networks decline, the Post Office continues to provide free and convenient access to cash through its branch network. However, the branch in Newtownards in Strangford is set to close—there is potential for that to happen, anyway—and that is absolutely devastating because the range of services that are not available in the local garage, which has a sub-post office, will only grow. Even the Post Office must therefore rethink its obligations. Through the banking framework that the Post Office has with 30 UK banks and building societies, postmasters support over £3 billion in withdrawals and deposits each month, providing a trusted, convenient face-to-face service at the heart of communities. However, large branches such as the one in Newtownards must be left open if we are truly to have a full service. According to Age UK, 27% of over-65s and 58% of over-85s rely on face-to-face banking. Nearly a third—31%—of people over the age of 65 said they were “uncomfortable” with the idea of banking online. The age sector must be protected, and the way to do that is to require legislatively a better minimum service from banks and post offices that are trying to fill the gap but are pulling back. So what do I want? I want banks to be required through legislation that they deliver for their customers. I want to ensure that the post offices, including the main post office, are in place in my constituency and to see opportunities through credit unions. I look to the Minister to outline how the Labour Government will protect access to cash, face-to-face banking and a full-service post office in each area.

15:15:00

It has been a pleasure to be part of the debate. I thank the hon. Member for Blyth and Ashington (Ian Lavery) and the right hon. Member for Tatton (Esther McVey) for bringing it forward. It would normally be customary, with so many contributors, to say that there has been a wide range of views, but I do not actually think there has been. There has been a wide degree of unanimity on the fact that banking services in this country are in crisis. The lack of access to banking for many of our constituents right across the country is leading to social exclusion, limiting entrepreneurship and having a devastating impact on many of our local economies. I have heard from many hon. and right hon. Members that services cannot just be replaced by online banking, particularly for those who have poor digital connections in their constituencies. The difficulty of accessing banking is a massive problem for those who are reliant on public transport, those who are disabled and those who are elderly or have additional needs. It is good to hear how banking hubs are making up some of the gap that so many communities are experiencing, but clearly there is a lack of banking hubs, and they do not do everything needed to close the gap in accessing cash or loan facilities. I look forward to hearing the Minister’s comments on that. The Liberal Democrats are strong champions of their local communities. We want to see the reversal of the damage caused to our local economies by the lack of access to banking. One of the things I call on the Minister to look at is reversing cuts to the interchange fee paid to ATM providers, which would go a long way to increasing ATM provision in many of our communities. The hon. Member for Blyth and Ashington gave a stark example of what happens when cash runs out in certain town centres. More needs to be done on digital inclusion because, clearly, digital banking will be part of our future banking provision, and for those who struggle to access it, more can be done to assist them. The Liberal Democrats call on the Government to consider a fair banking Act to look at this problem in the round, to think about banking exclusion not just for individuals, families and small communities, but for the wider business sector, and to look at what more can be done to connect our communities and businesses. I will close by adding my praise to Nationwide for its commitment to maintaining banking services on the high street. I was privileged to join my local Nationwide branch in central Richmond just before recess. The branch celebrates 110 years of being on Richmond high street. While I was there, I chatted to the local staff, who generously gave me some of the birthday cake. Many members of the local community were coming in to do their banking face to face. It was clear not only that it was good for my constituents to be able to use that face-to-face service, but that the staff got great satisfaction from helping customers and being that point of contact in the community. Other banks should be making available that sense of satisfaction to more of their staff, and I would like to see more banks making that commitment to community banking.

15:18:00

I also congratulate the hon. Member for Blyth and Ashington (Ian Lavery) and my right hon. Friend the Member for Tatton (Esther McVey) on securing this debate. A great strength of feeling about banks has been evident in this debate, and it is important to remember the importance of banks not just to our communities but to the wider economy. Banks provide services for businesses and individuals, but they also provide two other fundamental services. First, banks and building societies take money from where it has accumulated and distribute it to where it is needed for investment in infrastructure, businesses and jobs. Secondly, banks take overnight deposits and turn them into 25-year mortgages—so that our constituents can create a home and build a family—which is quite difficult for banks to do. The hon. Member for Blyth and Ashington made a couple of important points that I would like to address. The first was about the profits that banks make, and the second was about the policing of banks and the fact that banks apparently police themselves. Following the 2008 financial crisis, there was obviously a huge number of problems in the banking system. The Financial Services Act 2012 created two regulators, the Financial Conduct Authority and the Prudential Regulation Authority, both of which—and particularly the PRA—are responsible for making sure that our banking system is sound. Banks need to have strong balance sheets, and to do that they need to make profits to a certain extent. I agree that some of those profits look obscene, and perhaps some banks could put some of that money back into our communities. None the less, if banks spend their money unwisely, we potentially run the risk of another banking crisis. Along with the right hon. Member for Wolverhampton South East (Pat McFadden), I am one of only two Members left in this House who sat on the Parliamentary Commission on Banking Standards from 2013 to 2015. Our work on that commission underlines the importance of banks in modern life, about which we have heard so much today. The commission found that holding and operating a bank account is now essential to participate in society and the economy, whether it is receiving wages, paying bills or accessing benefits. But we also found that people’s views on banks are shaped by their direct experiences. The more a person knows their bank, the more likely they are to have confidence in it. That means that if banks want to retain their customers, they must provide good, wide-ranging services. An inability to access banking services risks eroding that trust and confidence, as we have heard today, especially among the most vulnerable.

Does my hon. Friend understand that people are very angry about bank closures, and about the fact they feel that the banks just do not listen to them when they go through some consultation exercise? That is why in Moffat, at 2 pm tomorrow, there will be a protest outside the closing Bank of Scotland.

I agree 100%. My right hon. Friend is absolutely right. Let us be clear that the decline of our high streets and the decline of bank branches have run concurrently as behaviour has changed over the last couple of decades and retail activity has increasingly moved online. Banks are, of course, commercial entities, and their decisions to close branches are often driven by commercial imperatives, which is not necessarily what we want to hear in this debate. Falling footfall, the rise of digital banking and the need to be cost-effective are just some of those reasons. As we have heard so often, there are now just 3,000 bank branches remaining in the UK, and that number is expected to drop even further in coming years. ATM numbers, especially free-to-use machines, have also declined. Only 14% of payments in the UK were made with cash in 2022, and withdrawals from the Link network are down 50% on pre-covid levels.

The clue is in the phrase “banking service”. It is about providing a service to people. As the hon. Member for Lichfield (Dave Robertson) said, banks dignify communities too. This is about personal interactions, trust and building relationships. That is what we do when we go into a bank, and we could never do that in the same way online.

My right hon. Friend makes a good point. This is about face-to-face relationships, not something done through an app. Behind the statistics I cited are real people and real communities. The digitally excluded, older people, those in poor health and people with lower financial resilience mostly rely on cash. Small businesses and rural communities are hard hit. The question for Members who want to compel banks to keep branches open is how much digital-first customers should be charged to retain loss-making branches—notwithstanding, of course, that profit question. Of course, the answer cannot simply be to do nothing and to walk away from our responsibilities to those who are left behind. The previous Government recognised the importance of maintaining essential banking services as a foundation for public confidence in this sector. Through the post office network, we provided a system of free and convenient access to banking services, and the banking framework partnership between the Post Office and over 30 of the UK’s banks and building societies means consumers and businesses can access basic banking services through the post office network. The Post Office now has more branches than all the banks and building societies combined, and according to the Financial Conduct Authority, post office branches make up more than 66% of all branch-based cash access points in the UK. The last Government also introduced banking hubs, which we have heard a great deal about. I am conscious of time, and I do not want to incur your wrath, Madam Deputy Speaker, so although I have a lot more to say, I think it would be prudent for me to step aside and allow the Minister to face up to the passion about this issue from Members representing their communities.

15:25:00

It is a great pleasure to speak in this debate. I want to thank and to congratulate my hon. Friend the Member for Blyth and Ashington (Ian Lavery) on bringing forward this important debate, which was heavily subscribed across the House. He highlighted the needs of his constituents, particularly the elderly, the vulnerable and the disabled. My hon. Friends the Members for Weston-super-Mare (Dan Aldridge), for Bolton South and Walkden (Yasmin Qureshi) and for Leigh and Atherton (Jo Platt), and the hon. Members for Bromsgrove (Bradley Thomas), for Farnham and Bordon (Gregory Stafford) and for Chesham and Amersham (Sarah Green) all stressed the importance of in-person services, particularly for vulnerable constituents. I congratulate my hon. Friends the Members for Isle of Wight West (Mr Quigley), for Derbyshire Dales (John Whitby) and for Gillingham and Rainham (Naushabah Khan), the right hon. Member for Wetherby and Easingwold (Sir Alec Shelbrooke) and the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick) on securing banking hubs in their constituencies— in the case of my hon. Friend the Member for Derbyshire Dales, two banking hubs are soon to open, as I understand it. Other Members spoke about their campaigns to secure banking hubs, including my hon. Friend the Member for Southampton Itchen (Darren Paffey), my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin)—who is apparently expecting a call from one such bank— and the hon. Member for Broxbourne (Lewis Cocking). My hon. Friend the Member for South Norfolk (Ben Goldsborough) and the hon. Members for North Shropshire (Helen Morgan), for Dumfries and Galloway (John Cooper) and for Strangford (Jim Shannon) talked about the importance of access to cash and banking services in rural areas.

Will the Minister give way?

I do not have very long left, I am afraid. The hon. Member for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Weston-super-Mare rightly stressed the importance of these services in urban areas as well. I will not go through all of them, but we heard lots of really good speeches on both sides of the House and a surprising degree of consensus, which is not always the case. It is interesting to see the right hon. Member for Tatton (Esther McVey) and my hon. Friend the Member for Blyth and Ashington so closely aligned, which is not something I expected. Through the Financial Services and Markets Act 2023, the last Government legislated to protect reasonable access to cash, giving the Financial Conduct Authority new powers to ensure that communities could both withdraw and deposit cash. The Government recognise that the ability to access cash and in-person banking support remains essential for many, particularly in rural areas and for vulnerable people, which is why we have secured the industry’s commitment to roll out 350 banking hubs by the end of this Parliament, ensuring that access to face-to-face banking is protected. Over 220 have been agreed, and more than 160 are open. Banking hubs are a voluntary initiative by banks as part of meeting their access to cash obligations, as legislated for in FSMA. Many Members have asked the Government to demand that Link reviews its assessment procedure, but it is worth reminding colleagues that the process for deciding where hubs are needed is independently determined by Link, the operator of the UK’s largest ATM network. The Government are not minded to review the legislation passed by the previous Government. A number of Members—including the hon. Member for Dumfries and Galloway, who mentioned this to me yesterday as well—talked about ATMs’ lack of reliability. I have done a little bit of work on that, and Link assures me that it takes a hard line with its members over the functionality of ATMs. However, I urge Members to raise these issues with me, so that I can raise them with Link. I am soon to meet John Howells, the chief executive of Link, and I will feed back the concerns that Members have raised today about how Link applies its criteria. I know that this is not necessarily the conclusion to the speech that Members were hoping for, but we think it is important that local communities have access to cash and banking services, which is why our Government are committed to rolling out 350 banking hubs across the country.

I call Ian Lavery to wind up very briefly.

15:29:00

With the leave of the House, I will simply say a very brief thank you to the Backbench Business Committee for allowing the debate, and to everybody who has participated in it. What my hon. Friend the Minister just said is exactly right. I am someone who has been criticised by Opposition Members as a left-wing dinosaur—I wear it as a badge of honour—but that would hardly be said of my right hon. Friend the Member for Tatton (Esther McVey). People should recognise that when someone with my politics and someone with her politics absolutely agree with everything that has been said, there is surely something wrong. Question put and agreed to. Resolved, That this House recognises the importance of banking facilities to local communities and expresses concern over the precipitous decline over the past 40 years; notes the change to banking habits through online services; further recognises that, for vulnerable people, face-to-face banking is a vital service and a reduction of branches risks significant financial exclusion; further notes the impact of a loss of physical banking on small businesses through lost productivity and lost footfall; also notes the innovative nature of banking hubs as a solution to a loss of high street banking, but recognises that Financial Conduct Authority rules for their recommendation are too inflexible; and calls on the Government to instigate a review into the impact on communities of bank branch loss and a change to the regulations to ensure communities have appropriate access to banking facilities.