To ask His Majesty’s Government how many (1) bank branches have closed, and (2) shared banking hubs have opened, in the last 12 months; and what steps they are taking to minimise the former and speed up the latter.
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my financial services interests as set out in the register.
My Lords, the Government do not make assessments of bank branch networks or intervene in commercial decisions to close branches. Banks should follow FCA guidance, including considering alternative access where appropriate. One example of this is shared banking hubs. More than 50 hubs have been announced, with four now open, and the pace of delivery is expected to accelerate over the coming months. People can also access everyday banking via their local post office.
My Lords, in the past 12 months, 847 bank branches have closed or are set to close. Four shared banking hubs have opened. Does my noble friend the Minister agree that the Government need to act to ensure local banking provision, including deposit taking as well as withdrawals and advice? They must also act to ensure acceptance of, as well as access to, cash; otherwise, what currency is cash if there is no place to spend it? Finally, will the Government consider carefully commissioning a review into access to digital financial services to ensure that everyone can benefit from all the financial innovations in that space?
My Lords, as my noble friend will know, in the Financial Services and Markets Bill, we are legislating to protect access to cash. That covers withdrawal as well as deposit services. The Government do not plan to mandate the acceptance of cash. That would be an unprecedented intervention. However, the increased access particularly to deposit services for businesses should allow those who wish to continue to accept cash to be able to do so on a more sustainable footing. My noble friend makes an interesting suggestion. The Government are working hard to ensure financial inclusion, including digital financial inclusion. I will think about his suggestion very carefully.
My Lords, getting a smart hub still requires the voluntary participation of the banks, which is part of the reason why the pace of progress has been so slow. Will the Government consider changing the rules so that any community that meets the standards to justify a smart hub, as assessed by LINK, then has an automatic right to that hub and can overcome bank resistance?
My Lords, the Government are not considering changing the framework. As I said in response to the Question, we expect the pace of delivery to pick up. Shared banking hubs are one initiative to ensure that communities can continue to access banking. I mentioned the Post Office as being another route: 99% of personal and 95% of business banking customers can carry out their everyday banking there, with more than 11,000 branches across the UK.
My Lords, my noble friend will recollect, no doubt, an earlier Question asked by my noble friend Lord Holmes about the nature of the facilities provided by ATMs and banks, particularly for those with disabilities. Will my noble friend therefore confirm that, in the establishment of these hubs, there will be a requirement on them to be careful to provide the sorts of facilities that are suitable for people with disabilities, as the banks were starting to do?
My Lords, in taking forward this work, I am sure that that is a consideration the banks have in mind. The banking hubs came out of a pilot programme that allowed banks to test out this model to ensure that it was accessible to all their customers. Of course, they are subject to the equality duty, which also means that they need to make proper provision for those with protected characteristics.
My Lords, legal tender is legal tender. I urge my noble friend to bear in mind that the Government have the opportunity, if they wish, to mandate the use of cash—people can use it when they want. Will she also bear in mind that a lot of people now are being discouraged from writing cheques? Many people like to pay their bills with cheques. All these facilities should remain, certainly for the next two decades.
My Lords, the Government acknowledge the important role that cash still plays in many of our lives, which is why we are taking unprecedented action on protecting access to cash. As I said, ensuring that businesses have access to deposit facilities will also promote ongoing cash acceptance by businesses.
I do not think my children know what a cheque is, actually. The Social Market Foundation and the Treasury Select Committee in the other place have expressed some concern about the overreliance on post offices as a stopgap. Postal staff are wonderful, but they are not trained banking specialists. Does the Minister agree that we need that trusted expertise to be available on our high streets? Does she also agree that some post offices just are not suitable for many of the requirements of face-to-face banking, especially for more vulnerable customers, as they do not provide the privacy and dignity that many bank customers need?
I agree with the noble Baroness that the Post Office can play a really important role in ensuring ongoing provision, but it should not be the only provider of services. There are other services that are more appropriately delivered in other ways, including in person, which is part of where banking hubs come in. As I have said, we hope to see the delivery of those hubs accelerated this year. It is also reassuring to hear that several banks have committed that if their branch is the last in town, it will stay open until the relevant banking hub is up and running, to ensure continuity of service.
In my local town of Bishop Auckland, Newcastle Building Society and Darlington Building Society have moved on to the high street as banks have moved off it. Will the Minister commend building societies for their commitment to local communities and to making things accessible to them, and will she encourage further work on that?
I absolutely commend building societies and all businesses that have a commitment to local communities and are thinking about how they can make their services as accessible as possible. There are many different routes to ensuring accessibility. We should focus on the outcome for the customer and embrace the different routes that this can be delivered by.