Commons Sense

House of Commons · Westminster Hall

High Street Bank Closures and Banking Hubs — [Philip Davies in the Chair]

11 May 2023 · 5 other contributors · 9,818 words

Opened by Wendy Morton Con Aldridge-Brownhills

Responding minister: Gareth Davies

EconomyEmploymentBusiness & Trade

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Wendy Morton raised concerns about high street bank closures and banking hubs — [philip davies in the chair] in Westminster Hall. A government minister responded.

Key points

  • Wendy Morton is concerned about the closure of bank branches across the UK, particularly citing 352 closures since March 2023.
  • Morton urges the Government to ensure a commitment to 'reasonable access' for banking facilities and to incentivise banks to maintain a physical presence in high streets.
  • The Minister notes that banking is changing due to innovation, with UK Finance reporting in 2021 that 86% of adults made contactless payments and 72% banked online.

Key requests to Government

Morton asks the Minister to ensure that the commitment to 'reasonable access' for withdrawal and deposit facilities remains and that action is taken proactively rather than reactively. She urges the Government to incentivise banks to maintain a physical presence in high streets, support post offices as alternatives, and collaborate with local councils on tailored solutions.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Wendy Morton Con Aldridge-Brownhills

Wendy Morton is concerned about the closure of bank branches across the UK, particularly in her constituency. She cites specific closures such as NatWest and Lloyds in Aldridge, noting that since March 2023, 352 bank branches have closed or are scheduled to close. She highlights that many communities will be left with just one bank branch, increasing dependency on a single institution and potentially limiting access to cash and services for vulnerable residents. Morton also raises the issue of ATM closures in poorer communities, which has forced people to pay fees for transactions or travel long distances.

Other contributors (5)
  • Elliot Colburn

    Carshalton and Wallington in suburban London have lost multiple high street bank branches. Barclays has agreed to set up a mobile van twice weekly at Dobbies Garden Centre and retain one staff member on the high street, but this does not address the over-reliance on Post Offices for banking services. The need for community-based solutions like banking hubs is urgent, as they can take time to establish. Proposes the Treasury use its convening power to encourage banks to collaborate proactively.

  • Kirsten Oswald SNP East Ayrshire and Arran

    Ms Oswald expressed frustration over the impact of bank closures on communities, particularly in rural and suburban areas. She highlighted issues such as reduced service hours leading to fewer customers visiting banks, leaving gaps in high streets and affecting local businesses. She also mentioned challenges faced by disabled people and the elderly due to inconvenient travel distances for alternative banking services. My hon. Friend is making a really important point about both banks and post offices potentially being lost to communities. Does she agree that when banks close and abdicate their responsibility, their suggestion that post offices will simply take over their services is unfortunate and unacceptable? It is as if the banks think they are not at all accountable.

  • Marion Fellows Lab West Bromwich West

    Scotland has lost the highest percentage of bank branches in the UK since 2015, with a 53% decrease. Cash payments have dropped from 56% to 17%, yet cash remains the second most used form of payment. Since 2021, Scotland has seen an increase in bank closures from six per month to eight. Post offices are also closing; between 2011 and 2021, Scotland lost 112 post offices. The closure of ATMs is affecting people who cannot afford fees for withdrawing cash. Many sub-postmasters struggle due to the Horizon scandal and earn minimum wage. New money laundering regulations have imposed limits on how much local businesses can deposit in cash at post offices, impacting small business operations.

  • Stephanie Peacock Lab Barnsley South

    Between 2012 and 2022, Yorkshire and the Humber saw a 43% decrease in bank branches. Barnsley East will soon have no bank branches due to recent closures. The rise in online banking has excluded many who prefer or need physical banking services. More than 3 million people aged 55 and above have never been online, with four in ten over-65s not managing their money online. Rural areas often lack reliable digital infrastructure, making it difficult for those reliant on cash to manage finances. Shared banking hubs could help but issues remain unresolved.

  • Tulip Siddiq Lab Hampstead and Highgate

    The closure of bank branches is harming communities, particularly the elderly and economically disadvantaged. Since January 2015, over half of UK bank branches have closed, resulting in 54 closures per month in 2023 alone. There are also concerns about access to free cash facilities as many ATMs no longer offer this service. We are lucky in this place with two post offices that hardly ever have queues, but in my constituency there are massive queues outside the post offices. Some of the services that constituents want to use a bank for are just not appropriate in a post office.

Government Response

Gareth Davies

It is a particular pleasure to see you in the Chair, Mr Davies. I thank Wendy Morton for bringing forward this debate on high street bank closures and banking hubs. Banking is changing due to innovation which has led to an increase in online banking; UK Finance found that in 2021, 86% of adults made contactless payments, 72% banked online, and 57% used mobile phones for banking. Digital connectivity and mobile phone coverage must be strong, as announced by the Government with a £1 billion deal to deliver the shared rural network, aiming for gigabit coverage in 85% of households. Local bank branches receive fewer visitors because many customers' needs can be met digitally through video calls or apps. The Financial Conduct Authority's guidance ensures firms consider customer impacts and alternatives if branches close. I will have the Economic Secretary write to her with figures on FCA pauses. LINK conducts reviews suggesting banking hubs where necessary, while 93% of people live within 1 mile of a post office offering everyday banking services. £227 million was secured in Government investment between 2022 and 2025 for post offices, later increased to £335 million including subsidies for commercially challenging locations. Banks provide various online options, community centres, libraries, mobile banking vans or semi-permanent pods, with over 50 shared banking hubs announced for communities across the country. The Financial Services and Markets Bill will enshrine access to cash in legislation. We understand challenges and nervousness accompanying changes but support customers, communities, businesses, and people, welcoming innovation to support competition and grow our economy.

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