Bank Closures and Banking Hubs

David Burton-Sampson Excerpts

Thursday 5th June 2025 Commons Chamber

[Ian Lavery (Blyth and Ashington) (Lab)]

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.

[David Burton-Sampson (Southend West and Leigh) (Lab)]

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?

[Ian Lavery]

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.