Banking Services: Accessibility

[Matt Western in the Chair]

I beg to move,

That this House has considered the accessibility of banking services.

It is a pleasure to serve under your chairmanship, Mr Western. I am grateful to the Backbench Business Committee for permitting me the opportunity to raise the issues and concerns about access to banking services across the country and in our communities. These are nationwide concerns, and the issue vexes many MPs and constituents—certainly in my constituency, where a large number of banks have closed in the last decade. Many people, particularly the digitally excluded and the most vulnerable, have been left in extremely difficult circumstances.

My relationship with banking is rather rudimentary, and I hope that those more engaged in debates on banking and financial services will tolerate my rudimentary dialogue on this issue; it is not one of my specialist subjects by any means, as I think will become apparent. Nevertheless, as a Member of Parliament, I have taken a very close interest in this issue, largely provoked by the closure in January this year of a bank in my constituency —in Penzance, west Cornwall. That has had a rather offensive impact on the town.

I am also concerned about the rather high-handed manner in which this closure was carried out, without any consultation—simply an announcement that was then followed through. I was shocked by the impact and many resulting factors of the closure, as well as the dismissive attitude of the bank when it came to that impact on some of the most vulnerable, disabled and digitally excluded people in the community. I have had a nine-year sabbatical from this place; when I was here previously, I did not face these issues as there were not any bank closures. There have been significant closures since. I was surprised at the dialogue and the attitude of the high-street bank—in this case, Lloyds.

I declare an interest in that I was a loyal Lloyds customer until last week; I had been for more than the last half century. I have been so dismayed by the attitude and approach of the bank to this closure that I have withdrawn all my custom and taken it elsewhere, and the bank knows it. The same applies to many in the Penzance area of my constituency.

When it announced the closure, the bank promised the local community a community banker who would come for one day every fortnight into a public building to offer an alternative service to help those people who needed face-to-face banking. I have had the following information from a constituent who attended one of those sessions very recently; they have only just been set up. The hub, held in St John’s Hall, a local authority building in Penzance, consisted of one community banker, with equipment in a very large room; no cash or notes were available, only advice. There were 28 people queueing to see the community banker, waiting in a very public place in an echoey room; there is no confidentiality there. The first two people waiting were in the meeting room for one hour—20 people stayed; eight left because they could not wait any longer.

This person’s wife arrived at 9 am and arrived back home just before 12 midday, having walked to and fro. It was a total shambles, which shows the disregard Lloyds has for people. The next time the community banker arrives, which is apparently now in three weeks’ time, the hub will be held upstairs, which is not good for older and disabled people. The nearby post office at St Clare could not dispense any cash during that time because the system was down, including the cashpoint outside the post office. Lloyds has recently stopped people from cashing cheques at post offices as well, so banking services that should be and have been provided to people have been withdrawn.

According to Fair4All Finance, more than 20 million people across the UK are in “financially vulnerable circumstances”. One in 10 people has no savings, and 21% have less than £1,000 in savings—nearly a third of our population are in extremely financially vulnerable situations: just one or two pay packets away from homelessness. Nearly 2 million people have used an unlicensed lender or loan shark in the last year, and 4.5 million people in financial vulnerability prefer face-to-face banking with a person. The issue has grown in urgency in many parts of the country. Access to in-person banking should be an essential public service. Closures affect people’s financial security, local economies, small business survival, digital inclusion, and the independence and dignity of older and disabled people.

The Minister will no doubt refer to the fact that banking hubs have replaced the banks, which have all been removed from towns, falling like a house of cards. However, having looked at the services available through hubs, I have to say that they are very limited in scope. I wonder about their sustainability in the longer run.

I am grateful to my hon. Friend for securing this debate, because so many people in my area of Devon, as well as his area of Cornwall, feel strongly about the issue. Not only are fewer services available when a bank closes its high street branch, but, if they are available a banking hub, they are available only one day per week rather than five. Does my hon. Friend agree that it is in the gift of the Government to reconsider the Financial Services and Markets Act 2023, and to look again at the ease with which banks are closing their high street branches?

I strongly agree with my hon. and gallant Friend. I will come to questions to the Minister in a moment; I believe that the Government need to look at the robustness and sustainability of those services. What has been put in the place of banks is rather flimsy in the longer term, and that represents a risk to the future of financial services, which are essential, particularly for the most vulnerable and digitally excluded in our society.

It is worth reflecting that Members of Parliament using digital technologies perhaps do not entirely comprehend how difficult that is for some people. I am not one of the most IT-savvy people on the planet by any means, so I sympathise with those people to a certain extent. Even when someone gets on top of the electronic capacity required to use electronic services, the services often still contain degrees of linguistic ambiguity that leave even the most intelligent and educated among us rather confused. Unless someone can speak to a human being, that ambiguity remains and the inaccessibility of those services continues as well. It is not just the electronics, but the fact that someone cannot ask anyone who has designed the system what on earth they mean by the options available.

I am surprised that the review of access to financial services has been reduced to an assessment of merely cash. That is what the regulations seem to say. My hon. and gallant Friend suggested that the Government need to look at this again, and I hope they will. The framework designed to protect communities from losing central banking services is far too narrowly focused. Current legislation and regulatory oversight look almost exclusively at access to cash, but needs to look at access to banking, banking advice, account advice and other services. Even Link’s formal assessments openly state that it does not consider access to more complex banking needs. It allows banks to close branches even when communities remain deeply dependent on face-to-face support, as we found in the case of Penzance, which I mentioned earlier.

It is a pleasure to serve under your chairmanship, Mr Western. I congratulate the hon. Member on securing this debate. He makes a really pertinent point about the issue of transport. One of the most frustrating elements for me, apart from the initial announcement of a closure of a bank on my high street or in the villages that I represent, often occurs when they tell people the location of their nearest alternative branch. I do not know whether the people running the banks understand the local transport system, but it can often take three and a half hours on public transport to even get to those branches. Does the hon. Member agree that it would be helpful if, when banks made these decisions, they consulted the public transport available to those losing their branch?

The hon. Member makes a pertinent and relevant point. That is why these matters need to be taken into account; it cannot be purely about access to cash, which is all that Link currently needs to consider. As long as there is an ATM in some corner within a mile or two of someone’s community, that is deemed to be sufficient to justify any bank closing anywhere. However, it is not sufficient.

Now that the Penzance branch has closed, of the 39 Lloyds branches in Cornwall and on the Isles of Scilly, only two are left in Cornwall. People on the Isles of Scilly have to travel by ferry, paying £220 for a return ticket to the mainland—as well as for an overnight stay and a two-hour bus ride to Truro and back—to get access to face-to-face banking. That is the reality my constituents face to get access to the services.

Why are face-to-face transactions important? They are important for identity verification, resolution of fraud or scams, handling significant disputes or matters of banking interpretation, complex account queries, CHAPS and international payments, business cash deposits, and change-giving services. They are also important when there are bereavement or probate matters, as well as for community organisations, when counter-signatories are required, and for sports clubs and voluntary organisations. Those things are absolutely essential to the life of such organisations.

I am conscious of time; although I could say a great deal more on this important issue, I want to make sure that other hon. Members have an opportunity. Since 2015, around 6,700 branches—68% of the whole banking network—have closed. That is significant, and the impact on our communities has been fundamental and wide-ranging. On the day in January this year that Lloyds decided to close its Penzance branch, the bank had been in the most iconic building in the centre of our town, Market House, for literally 100 years. It was still serving 33,000 customers. Twenty-nine per cent of those local customers used the branch exclusively, and more than 1,000 regular weekly users—around one in 20 of the town’s residents—relied on it. The local population is older than the average and, as I mentioned, there was no consultation on the closure. Banks are able simply to ignore those facts.

It is a pleasure to serve under your chairmanship, Mr Western. I am grateful to the hon. Member for St Ives (Andrew George) for securing this timely debate.

The debate is particularly timely for me, because only last week the last bank in the whole of my constituency—Lloyds in Tunstall—closed its doors for the last time, leaving Stoke-on-Trent North and Kidsgrove without a single bank. In Kidsgrove, the last bank, Barclays, closed back in 2023, and Burslem residents have been without a bank for years. I remember going to the bank in Burslem with my mum when I was a kid. I queued up and watched people pay in and take out money. It was a place with a social purpose and someone to speak to. It was part of my everyday life and the everyday life of my family, and I know that is true for all members of our community. That has been lost.

Since my election, I have fought, alongside residents and local councillors, against the final bank’s closure. When Lloyds announced that it would leave Tunstall, I wrote to the bank and met its representatives to make the case against the closure, but really the decision had already been made. It was a case of “computer says no”—that is what it felt like. That is the problem: these decisions are made far away, on the basis of narrow commercial logic with little regard for communities like ours.

I have been campaigning on this issue in my constituency, but I did not stop there. I campaigned to bring banking hubs back into my constituency, and pushed for provision in both Tunstall and Kidsgrove. In Tunstall, we have a banking hub that is open, and I want to place on record my thanks to Aaron and the team at the post office who are doing great work with residents who have lost access to what I call “proper banking”, but we need to be clear that a banking hub is not a replacement; it is a mitigation. Meanwhile, in Kidsgrove, there is no banking hub at all—or no proper banking hub, I ought to say. There is something that is branded as a banking hub, but I do not class it as a real banking hub. Let me say it plainly: Kidsgrove needs a full-time banking hub, and it needs it now. We are told that alternatives are available. We are told to go and use post offices, but the post office in Kidsgrove has been closed for a year. We are told to go elsewhere, but “elsewhere” simply is not accessible for many people, particularly older and vulnerable residents, people without transport, and people who run small businesses.

It is an honour to serve under your chairship for the first time, Mr Western. I thank my hon. Friend the Member for St Ives (Andrew George) for introducing this debate on a subject that is so important to his constituents and those of so many other Members.

Lloyds Banking Group recently informed me, with only four months’ notice, that it is set to close its Tewkesbury branch alongside 94 others across the UK. Members who represent rural constituencies similar to mine will understand just how hard that will be for residents, not only of Tewkesbury but of the smaller settlements around it. The closure of Lloyds is only the latest in a sorry pattern that we have faced in recent years. In Tewkesbury town alone, the Barclays branch was shuttered in 2025, following the closure of Halifax only a few years previously. In Bishop’s Cleeve, NatWest and TSB have perished, as has the Lloyds mobile banking service. Winchcombe has not had a bank branch since 2018, and had lost face-to-face banking altogether for a brief but painful period until the post office was reopened in 2025. I take this opportunity to thank Councillor Gemma Madle for her excellent work in securing the reopening of that branch, and indeed to thank the Post Office for providing that lifeline.

As I said, such bank closures are prohibitive for residents in rural communities, particularly the elderly, the digitally excluded and those who fear the transition to digital banking due to the threat of criminal exploitation, but they are damaging in other ways too. For our high street businesses, a bank closure means the added administrative burden of closing their account or moving it to a bank with a continuing presence, if one remains. It means that the footfall that would otherwise occur on Tewkesbury high street, from people who live in outlying villages and bank with Lloyds, might now benefit the high street in Cheltenham or Evesham. It means another empty front on a historic high street and another signal from the bank that it will no longer justify serving its customers face to face.

The hon. Member is making an excellent speech. After a long campaign in my constituency, we have been lucky enough to secure a banking hub in Ilkley. It opens in a couple of weeks. I fear that more bank branches will close in Keighley and we will need to secure a banking hub there. One challenge has been that when Cash Access UK and Link assess whether a banking hub should be opened, they look at when the last bank closes but also assess access to cash through a cash machine. I suggest that when the hon. Member is trying to secure banking hubs in his constituency, he should pay attention to making sure that there is a cash machine on the outside of the hub, because I have had that challenge in my constituency.

I thank the hon. Member for the advice; I will certainly take that forward. I am glad to hear that his constituents are served by a banking hub.

I close by welcoming the formal review of access to cash that the Financial Conduct Authority is undertaking, although, as my hon. Friend the Member for St Ives pointed out, it does not incorporate access to other banking services. I worry about communities such as mine, which will suffer in the interim.

I congratulate the hon. Member for St Ives (Andrew George) on securing this timely and appropriate debate. I will tell you a tale of three towns with relatively big populations on the outskirts of Glasgow, of a number of banks, of the actions of one banking group in particular, and of a community fight back.

When a bank moves out, what replaces it? For far too many communities the answer has been nothing. In Kilsyth in my constituency, that was exactly the situation. The last bank branch, the TSB, closed in 2021 prior to any automatic assessment for a community banking hub. When that branch went, something more than a service was lost. It meant longer journeys, less footfall, and real anxiety for people who simply want to manage their banking face to face.

I know from experience, having lost my father last year, that my mum—in her 80s, dealing with the bereavement and having to close his accounts—wanted to deal with the bank face to face. She did not feel comfortable using an app and did not want to talk to a call centre—they did not understand Scots law. I have spoken to local businesses that handle cash every day, which were left asking where they were supposed to go, and to older residents—not my mum—who do not bank online and should not be expected to, and I heard time and again that people should not have felt forgotten.

But Kilsyth did not accept it. The community spoke up. A request was made by my team, working with the local Labour councillors, Councillor Jean Jones and Councillor Heather Brannan-McVey, whose mum, Nan, was one of the previous bank staff—Heather is still known as “Nan from the bank’s daughter”—and indeed the whole local community. Link carried out the assessment, and we are expecting the interim banking hub for Kilsyth to be opened in the next few weeks.

This is what good looks like, in an area that lost its bank five years ago—a shared banking space; cash in and cash out; bill payments at the counter; customers being able to speak to somebody who will talk them through all the things they need to do. Every bank does different things through the hub. One improvement that could be made would be to offer a full range of banking services—but on different days, staff are there from different banks to deal with things that cannot be done on the app. It is not a perfect replica of the past, but it is a practical solution for the future. Crucially, it puts banking back where it belongs: in the community. In Kilsyth, it enables people to manage their money locally again and lets businesses bank their takings without leaving town, without pushing aside those who rely on cash. But communities like Kilsyth should not have to fight that hard just to get the basics back.

It is an honour to serve under your chairmanship, Mr Western. I thank my hon. Friend the Member for St Ives (Andrew George) for securing this vital debate. He represents a similar constituency to my own, with the additional challenge of some extra islands, and I was struck by some of the similarities in our experiences—particularly the dismissive attitude of Lloyds, which was mentioned by several Members.

My hon. Friend spoke about the reliance on community bankers, which banks have provided as an alternative, but, similarly to him, I have found in my constituency that the locations in which they are offering those services are not up to scratch, and local residents do not feel comfortable with them. My hon. Friend also said that the FCA criteria need to be widened, a call that I certainly agree with.

My hon. and gallant Friend the Member for Tewkesbury (Cameron Thomas) spoke of the impact of closures on small towns and local economies. There is only one bank left in Tewkesbury; I am sure that is causing a huge inconvenience for his residents. Likewise, I agree with his call for the number of hubs to be increased. The hon. Member for Stoke-on-Trent North (David Williams) spoke of Lloyds’ “computer says no” approach, and the hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray) spoke about the community campaigns in her constituency and the impact of Santander’s closures.

Across my constituency of Brecon, Radnor and Cwm Tawe, we are seeing a steady and deeply worrying erosion of access to basic banking services. The issue here is whether people can withdraw their own money, whether small businesses can function, and whether elderly residents can manage their day-to-day lives. In rural Wales, access to cash and in-person banking is not a luxury; it is a necessity.

Take Hay-on-Wye, an internationally renowned tourist destination and home to the Hay festival, with a thriving high street built on independent businesses. It is heavily cash dependent, particularly during the tourist season, yet it has no bank, and its only 24-hour ATM is routinely out of action, often for weeks at a time. What message does that send—a town that welcomes the world yet cannot guarantee access to cash for its own residents or its many visitors? That is not just inconvenient; it is economically damaging.

I hope my hon. Friend does not mind if I join in on his last point, which adds to the comments made by our hon. Friend the Member for St Ives (Andrew George) about the branding that Lloyds uses to portray itself as “By Your Side”, as though it is a member of the community. It uses the powerful image of the black stallion and powerful music, the name of which evades me. The reality is that it is a multi-billion-pound juggernaut and that black stallion has well and truly bolted from 94 of our communities, ridden by a CEO taking home £17 million.

My hon. Friend is quite right. Many of my constituents certainly would not say that Lloyds is by their side. That is why it comes down to the Government. They have to show that they are on the side of our constituents, not just of the big banks.

Ultimately, this is a question of political choice. The Government can choose to stand up for rural communities and those reliant on in-person banking—which is all of us—or they can continue to allow this managed decline. Right now, the choices being made are the wrong ones. Labour has chosen to keep the tax breaks handed to the big banks by the previous Conservative Government and hinge its economic strategy on appeasing those same banks. At the same time, it is asking the small, often family-run businesses on our high streets to shoulder more of the burden to raise revenue. While big banks are being rewarded, rural communities are being left behind and local businesses are being squeezed.

That is not fair, balanced or sustainable. We need a reform of banking hub criteria to reflect rural geography, a proactive provision of hubs before the last bank closes, guaranteed access to free-to-use ATMs, and stronger obligations on banks to maintain services in underserved areas. Without intervention, the current trajectory is clear: more closures, further exclusion and more communities left behind.