Banking Hubs

Motion made, and Question proposed, That this House do now adjourn.—(Mark Ferguson.)

Motion made, and Question proposed, That this House do now adjourn.—(Mark Ferguson.)

It is pleasing to see a significant number of Members in the Chamber to be part of this Adjournment debate, by hearing it and perhaps by participating. I am aware of about 15 hon. Members who have asked to intervene on me, which is a high number for an Adjournment debate. There may be more whom I am unaware of. The Minister has kindly indicated that she is also happy to take interventions, so if hon. Members feel like spreading the love when they think I have had enough, that would be much appreciated.

On that point—[Laughter.] First, may I commend the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) for bringing this matter forward? I spoke to him beforehand, and I thought it was important to put this point on the record. I have had 11 banks close in my constituency, and seeing the decline of banks in rural areas has been excessively worrying and frustrating. Although every bank that has pulled out of the peninsula in Ards has promised working hubs, the reality is that a member of staff in a room without even the facility to print off a bank statement for a client is not acceptable. Does the hon. Member not agree that a hub must have banking facilities, as well as a post office, and that we must make sure that there is not just a member of staff for two hours a day or a week?

I absolutely agree with that. It is important that, where there are hubs, they are open for a reasonable period of time and are accessible at different points of the day to different people with different needs.

The important subject of banking hub criteria has been raised many times in this place and in Westminster Hall, and it is an issue I have campaigned on since I was elected and during my time as a councillor and a council leader. In 2015, Moray West, Nairn and Strathspey had 22 bank branches. Just 11 years later, the number has dropped to just six in the latest data from January this year; that is a 77% reduction. That is six banks for almost 100,000 people living in the fifth largest constituency by geographical area in the UK—a constituency that it takes about two and half hours to drive from end to end.

The following bank branches alone have closed since 2020: in Forres, the Bank of Scotland and TSB closed their branches in 2022; in Badenoch and Strathspey, the Bank of Scotland closed its branch in Aviemore in 2024; and in Grantown-on-Spey, the Bank of Scotland and the TSB closed their branches in 2020 and 2021; while in Nairn, the TSB closed its branch in 2021, and most recently, the town lost its last bank. Link, the organisation that monitors bank closures and which is tasked with determining where new shared services should be, reports the total number of bank closures across the UK as 2,237 since 2022. For the same period, 276 banking hubs have been recommended by Link.

In this modern age, when there is digital banking on websites and through apps and when, frankly, fewer and fewer people are using physical bank branches, it is not a surprise to see those closures. However, it is how we respond that is important. There remain many vulnerable people and, indeed, certain types of businesses that rely heavily on cash banking and we cannot allow the rug to be pulled out from under them.

I am grateful to the hon. Member for giving way and for securing this debate and choosing this topic. He is so right that there are older and vulnerable people who are not able to access banking services or to access cash because of high street bank closures. Does he share my view that the Government’s introduction of the Financial Services and Markets Bill today in the other place presents a great opportunity for them to consider how banking services and access to cash can be provided in rural areas?

I absolutely agree. I am pleased to see the Bill coming forward, as it will provide opportunities to make progress on this important issue.

There is also the vital question of community sustainability. The loss of banking services in rural communities makes it harder to attract people to live and work there. It also means the loss of local banking jobs that have long provided access to respected professional jobs and the potential of a career in financial services.

The hon. Member rightly talks about the lack of banking access in his constituency and in rural areas. I have noticed that there is now a lack of banking access even in my urban constituency in Glasgow, particularly in areas such as Castlemilk and Carnwadric. That is particularly bad because some of the people there do not have access to a car. Does the hon. Member agree that banking hubs are also important in urban areas where those services are not provided?

Certainly; there are some areas, particularly large estates in urban areas, where we can see services disappearing simply because of how people live their lives. It is important that the state takes action to protect those critical services that people access. I was a student in Glasgow, and I see lots of places where there were banks that I used when I was a student which simply do not exist any more.

I know that this is an issue that the hon. Member cares about passionately. I am sure that like me, he has had issues with people, particularly elderly people, who fear that they have been scammed. It is all very well saying, “Get online and we’ll see if we can sort this out,” but there is nothing like a face-to-face meeting and somebody from the Bank of Scotland, the Clydesdale or the Royal Bank of Scotland saying, “No, you’re okay,” or, “This is what we’ll do.” With all due respect, that reassurance is not there online. That is why I believe that face-to-face advice is hugely important.

I absolutely agree about face to face, particularly for vulnerable people, but also for businesses or maybe somebody who might be thinking about starting up in business. Being able to talk to a community banker who can give them a little bit of early advice about access to basic business services is really helpful.

The hon. Gentleman has been very generous with his time in allowing all these interventions. Does he agree that part of this is about fairness? Without the access to the professional advice that they would get from face-to-face banking, some businesses might not succeed as much as they should have done. In my own constituency, we have seen high streets being closed, but we have not yet been successful in getting a bank hub in Abbots Langley, despite there being a community demand and, I would argue, a need for it.

The hon. Gentleman makes a fantastic point and I will come on to that later in my remarks.

I thank the hon. Gentleman for giving way. We will leave him in peace for a while after this. For nine months I have been trying to get a banking hub in Ammanford, which is a post-industrial town, but Link has turned us down. We went to appeal and it turned us down again. Does the hon. Gentleman agree that we need consistency in applying Financial Conduct Authority guidance? All the elements seem to qualify that town for a banking hub, but yet again, Link has turned us down. There seems to be a lack of consistency in applying the rules.

Absolutely. That consistency is vital, but flexibility within the criteria is also vital. I will come on to that as well.

It is frankly hard to stomach that the big high street banks use the argument of increased digital banking to justify local bank closures while building large, centralised banking centres in our cities. Surely the same argument can be applied to push workforce and management out to existing bank branches in local communities and enable that local workforce to carry out tasks on national functions such as mortgage services and business banking using the very same digital technology.

On the point about the assessment made by Link under statute, does the hon. Gentleman agree that the three-mile radius that is being used by Link is totally inadequate when looking at rural areas such as mine in Pembrokeshire?

Yes, and I thank the hon. Member for that intervention. We are down to six bank branches in an area that takes two and a half hours to drive around. It is simply impossible for many people in those areas to access those services.