Bank Closures and Banking Hubs

David Mundell Excerpts

Thursday 5th June 2025 Commons Chamber

[Ian Lavery]

That sounds like the same sort of situation as the one we had in Blyth. There were cash machines outside and inside, but the cash machines outside ran out of cash. There were people knocking on the shop windows asking the people who were filling the shelves to get some money for them from the cash machines inside—how ludicrous is that? How ridiculous!

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I welcome the point that the hon. Gentleman is raising. There is also an issue with cash machines inside shops that may be open for longer, but they are stocked from the shop by the cash received in the premises. There can be cash machines in a shop that have no cash in them, but Link has to take them into account when assessing whether there should be a free-to-use cash machine in a community.

[Ian Lavery]

I totally agree with the right hon. Gentleman’s point. I like bringing school kids into Parliament. Down in one of the corridors there is an ATM that says “Free cash”, and I tell all the kids, “That’s what you get if you are an MP—you can get as much cash as you want from here—it’s free, it’s free!” [Laughter.] And they all ask me if I can get them some cash before they go to their mams. Free cash? There are ATMs where people have to pay a huge percentage to get their own money. That is an issue that I will cover very shortly.

My own experience of dealing with Link saw me almost guaranteed that a banking hub would be delivered in Bedlington just before the election, but on receiving the assessment, no such facility was proposed and instead worried locals were asked to travel to nearby Cramlington to conduct their financial affairs. That is not acceptable. It is correct to say that banking hubs are an innovative solution for high streets left without banking facilities, but Link’s briefing note on banking hubs published on 2 June 2025 says:

“Banking hubs are shared services that enable customers of any of the major high street banks to access basic banking services and advice from community bankers. Hubs are delivered by a bank-owned company called Cash Access UK, and are currently operated by the Post Office.”

The Government have stated that they expect 350 banking hubs to be open by the end of this Parliament. We are well on-track to surpass that figure. Link has already identified a need for 226 banking hubs across the UK, and a similar number of other cash services, such as new deposit services. Over 150 banking hubs are already operational. There is no doubt that that is progress, but we need far more to provide the service that our constituents deserve. The figure of 350 banking hubs might sound impressive, but there are 650 constituencies represented in Parliament. In my constituency alone, banking hubs should be at the heart of the high streets in Ashington, Bedlington, Blyth, Guidepost and Newbiggin- by-the-Sea, but at the current rate, we will need 10 times the amount being talked about by the end of this Parliament. Our high streets have been hollowed out by online and out-of-town shopping.

--- Later in debate ---

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

In that case, Madam Deputy Speaker, I will start with my ask of the Minister, which is that the criteria for assessing whether there should be a free-to-use cash machine in a community be reassessed. For example, in my constituency, the Bank of Scotland closed its branch in the community of Moffat on the same day as it closed four other branches. At the moment, Link has to take into account every other cash machine in the vicinity, regardless of whether there is any cash in those machines—often, machines in retail outlets are not fully stocked with cash all the time; they rely on cash coming in through the till to go into the machine—or whether premises are open for 24 hours or are particularly disabled or vulnerable people-friendly. At this moment, we cannot get another cash machine because it has been assessed that the number is sufficient, without any assessment of those cash machines.

The closures I referred to mean that for 75 miles along the M74 motorway, from the border to Hamilton, you will not find a bank branch. When it comes to bank buildings being taken up by others, I have not been as lucky as my right hon. Friend the Member for Tatton (Esther McVey): they are often very large buildings on small high streets, and unless the banks are willing to do something themselves, there are not often other users. The Bank of Scotland previously said that it would allow the Peebles branch that is closing to be for community use, and the community have engaged, so I am disappointed to hear that they find today that a “For sale” sign has appeared outside that branch. I hope that the Bank of Scotland will keep that community access.

My third point is that we need to join up what is happening. The Bank of Scotland in Sanquhar in my constituency is closing. The bank is putting a bank consultant into the community to look after its customers, it says, but that person will not be in the post office that has been designated by Link as the effective banking hub in that community. That person will hold separate meetings in a council office. There just is not joined-up thinking.

My final point is that we talk about post offices when many people do not have a physical post office, but a temporary post office delivered out of the back of a van, which is not capable of providing a banking hub service.

--- Later in debate ---

[Mark Garnier (Wyre Forest) (Con)]

I also congratulate the hon. Member for Blyth and Ashington (Ian Lavery) and my right hon. Friend the Member for Tatton (Esther McVey) on securing this debate.

A great strength of feeling about banks has been evident in this debate, and it is important to remember the importance of banks not just to our communities but to the wider economy. Banks provide services for businesses and individuals, but they also provide two other fundamental services. First, banks and building societies take money from where it has accumulated and distribute it to where it is needed for investment in infrastructure, businesses and jobs. Secondly, banks take overnight deposits and turn them into 25-year mortgages—so that our constituents can create a home and build a family—which is quite difficult for banks to do.

The hon. Member for Blyth and Ashington made a couple of important points that I would like to address. The first was about the profits that banks make, and the second was about the policing of banks and the fact that banks apparently police themselves.

Following the 2008 financial crisis, there was obviously a huge number of problems in the banking system. The Financial Services Act 2012 created two regulators, the Financial Conduct Authority and the Prudential Regulation Authority, both of which—and particularly the PRA—are responsible for making sure that our banking system is sound. Banks need to have strong balance sheets, and to do that they need to make profits to a certain extent. I agree that some of those profits look obscene, and perhaps some banks could put some of that money back into our communities. None the less, if banks spend their money unwisely, we potentially run the risk of another banking crisis.

Along with the right hon. Member for Wolverhampton South East (Pat McFadden), I am one of only two Members left in this House who sat on the Parliamentary Commission on Banking Standards from 2013 to 2015. Our work on that commission underlines the importance of banks in modern life, about which we have heard so much today. The commission found that holding and operating a bank account is now essential to participate in society and the economy, whether it is receiving wages, paying bills or accessing benefits. But we also found that people’s views on banks are shaped by their direct experiences. The more a person knows their bank, the more likely they are to have confidence in it. That means that if banks want to retain their customers, they must provide good, wide-ranging services. An inability to access banking services risks eroding that trust and confidence, as we have heard today, especially among the most vulnerable.

[David Mundell]

Does my hon. Friend understand that people are very angry about bank closures, and about the fact they feel that the banks just do not listen to them when they go through some consultation exercise? That is why in Moffat, at 2 pm tomorrow, there will be a protest outside the closing Bank of Scotland.

[Mark Garnier]

I agree 100%. My right hon. Friend is absolutely right.

Let us be clear that the decline of our high streets and the decline of bank branches have run concurrently as behaviour has changed over the last couple of decades and retail activity has increasingly moved online. Banks are, of course, commercial entities, and their decisions to close branches are often driven by commercial imperatives, which is not necessarily what we want to hear in this debate. Falling footfall, the rise of digital banking and the need to be cost-effective are just some of those reasons.

As we have heard so often, there are now just 3,000 bank branches remaining in the UK, and that number is expected to drop even further in coming years. ATM numbers, especially free-to-use machines, have also declined. Only 14% of payments in the UK were made with cash in 2022, and withdrawals from the Link network are down 50% on pre-covid levels.

Inheritance Tax Relief: Farms

David Mundell Excerpts

Monday 10th February 2025 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a great pleasure to serve under your chairmanship, Sir Edward. Having participated in the previous debate on the subject in the main Chamber, I welcome the different tone from Government Back Benchers. They will get much further with their constituents by reflecting their concerns than by reading out Whips’ points in these debates.

One issue that I want to highlight, because it goes against some suggestions that have been made in relation to so-called land banking, is that when agricultural land is currently sold in my constituency, it is acquired by private equity firms that want to go down the route of industrial tree planting or solar farm production. If we require farms to be sold to meet inheritance tax demands, they will not be sold to new family farmers or new entrants; they will be sold to private equity firms that want not to produce food on our land, but to maximise tax benefits such as carbon offset and other environmental tax benefits. In addition, they do not employ anyone within the constituency—there is no ongoing employment.

Farming does not just produce food and create generational and environmental benefits; it is at the heart of the economy. I have seen that directly: to counter the 2001 foot and mouth outbreak in my constituency, virtually every hoofed animal was destroyed. When farming closed down, the economy closed down. Everybody in the constituency lost out. People were not in the shops, were not buying cars and were not using other businesses. Farming is not just about all the things we have heard about today; it is right at the heart of the economy.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

Changes to inheritance tax can be made that will prevent people from gaming the system and buying up land to avoid tax. That can be done without an impact on existing farming businesses. Does the right hon. Gentleman agree that for the Government not to have even considered such changes in their previous responses is not only unacceptable, but a dereliction when it comes to food security and national security?

[David Mundell]

What will be unacceptable is if the Minister stands up at the end of this debate and gives the same response that he has given in previous debates, having heard the points that his own colleagues have put forward about how damaging and ill thought through this policy proposal has been. I am looking for a change in tone not just from Government Back Benchers, but from the Minister.

[Esther McVey (Tatton) (Con)]

Does my right hon. Friend agree that the Labour leadership is in serious jeopardy of stubbornly painting itself into a corner, when what is needed is pragmatism and for the Labour leadership to listen to the farmers, the public and its own Back Benchers? For today’s debate to mean anything, for Labour Back Benchers to mean anything and for their words not to be cheap, it is time for the leadership to actually listen and find a way to graciously stop this farm food tax.

[David Mundell]

I absolutely agree. Labour MPs have listened to their constituents—that is being reflected back to us today—and now we need the Minister to listen to Labour MPs.

The other point that I want to get on the record is the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael), the Chairman of the Environment, Food and Rural Affairs Committee, about the specific issue of tenanted farming holdings in Scotland. For tenanted farmers to raise the funds required, they would have to give up their whole holding. They might not even be able to. That has clearly not been thought through as part of this exercise.

What people outside want is a debate that changes policy. They want a debate that shows that the Government are listening, have heard what they have to say and will do something about it. I hope that that will be evident in the Minister’s contribution at the end.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 21st January 2025 Commons Chamber

[Darren Jones]

I thank my hon. Friend for raising that question on an issue that I know is deeply important to him, his constituents and his family, and on which he has worked for many years. The Government are actively considering proposals from the scheme’s trustees, and we will set out the next steps in due course. My hon. Friend the Minister for Industry in the Department for Business and Trade will be working on the detail, and I will be meeting her shortly to consider the options.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I have significant former mining areas in the Douglas valley and Upper Nithsdale in my constituency. Constituents there are concerned about the British Coal scheme, because many people in that scheme actually worked underground before being promoted into other jobs. To ensure fairness in the implementation of this Government policy, will the Minister make sure that the timescale on which they are compensated is the same as that for those in the other scheme?

[Darren Jones]

I thank the right hon. Member for his question, and I think “fairness” is the right word. That is why we worked in opposition to try to persuade the last Government to act on the mineworkers’ pension scheme, but we failed because the last Government did not think this was an urgent issue for them to consider. The Labour Government have implemented this change at our first Budget, and that is fairness in action. We will continue to work with trustees of the BCSSS, and we will come back with further options in due course.

Public Finances: Borrowing Costs

David Mundell Excerpts

Thursday 9th January 2025 Commons Chamber

[Darren Jones]

It might have been legitimate for the Conservatives to say that their economic policy was to borrow for day-to-day costs—as they did. That could be a decision that they took. What is not forgivable is the fact that they reached a point at which they were making promises to the British people that they knew they did not have the money to pay for, and that is where the £22 billion black hole came from. They should be ashamed of their record on the economy, and they should apologise to the British people.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

When will the Chief Secretary take responsibility for the actions of his own Government? We had a general election, and that is when the public held the previous Government to account. They gave their verdict, and the Labour party is in power now. What the public want is accountability for this Government’s reckless decisions: the national insurance increases are an attack on jobs; there has been an attack on the farming community; and business confidence is at an all-time low.

[Darren Jones]

The right hon. Gentleman may not wish to reflect on his party’s performance in government, but I am afraid he has to. Although this is a new Government—we have been in office for six months—the reality is that we are having to clear up the mess that the last Government left us. That is why we have to talk about it, and explain to the country why the actions taken by the Conservative party not only affected family finances, but decimated the British economy and pushed public services on to their knees. We are taking responsibility for clearing up their mess, and that is why we will keep talking about it.

Farming and Inheritance Tax

David Mundell Excerpts

Wednesday 4th December 2024 Commons Chamber

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I commend my near neighbour, the hon. Member for Penrith and Solway (Markus Campbell-Savours), on his brave contribution. It is hard to come to this Chamber and tell the truth when the pressure from the Whips and the party is to defend the Government at all costs. He made it absolutely clear that this measure will have a devastating effect on farms and the farming industry in his constituency if it goes through as currently set out.

The hon. Gentleman’s constituency and mine have something in common in that, in the 2001 foot and mouth outbreak, which devastated the farming industry, we saw for sure how important farming was to the whole community. Because farming was shut down, business was shut down. Shops were shut and lots of businesses including garages and all the services in rural areas could not function because farming was not functioning. That showed me the great importance that farming has.

Ironically, however, the outcome for my constituency of this measure from a Labour Government will be the further acquisition of land by private equity companies. This is because, thanks partly to the Scottish Government’s lifting of restrictions on land that can be afforested, good farming land in my constituency is under huge pressure from private equity funds buying it up to plant trees for carbon capture reliefs. It often seems that it is a great thing to plant trees and that we should all be in favour of it, but the reality is that these trees are Sitka spruce trees that are planted very close together. There is no light or environmental content within these forested areas. No creatures can survive in them. They are not environmentally friendly or sustainable, but they are financially attractive. They employ nobody. There is no employment once the forest has been planted.

When farmers come under pressure, as they will, to sell land to meet the inheritance tax, this is who the buyers will be. It will be these private equity firms, and if it is not them, it will in many instances be those who want to develop solar panels in a farming scenario, as other Members have highlighted.

[Tom Hayes]

Does the right hon. Gentleman agree that even the most ambitious estimates show we could cover only 1% of agricultural land with solar farms? Does he agree with Tom Bradshaw, the NFU’s president, who told journalists 85 days ago:

“What I do want to say is that an individual solar farm is not something which risks national food security”?

And does he agree with the CLA, which said in 2022:

“Solar is also a valuable diversification and cost reducing land use for farms—helping to shield exposure to volatile agricultural markets”?

[David Mundell]

No, I do not agree with the hon. Gentleman’s proposition. I do not think that viable prime agricultural land should be used for solar farms. I believe there is plenty of other brownfield land, or land that is not prime agricultural land, that could be used for solar farms. I am, therefore, not supportive of some of the huge developments proposed for my constituency.

I will now touch on one or two other points that have been raised but not expanded on. First, a lot of this discussion has been as if the sole structure of a family farm is mother, father, son and daughter. Brothers and sisters, or cousins, are often involved in the farming business, and it is quite wrong to suggest that some of the reliefs that can be applied would work in that situation. I have constituents who are in exactly that situation. A family farm is not just mum, dad, son and daughter. It is brothers, sisters, cousins and extended family.

The right hon. Member for Orkney and Shetland (Mr Carmichael) touched on tenant farmers. Tenant farmers in Scotland, in particular, are in a very difficult position because they cannot sell a couple of fields to pay their inheritance tax. They will have to give up the whole of their business, if they cannot find the money in other ways to pay these bills. We need to understand the issues that face tenant farmers.

I also commend the right hon. Gentleman’s suggestion that there should be a much wider debate about farming finance. The way to secure farming finance, and to secure our farmers, is not to destroy the family farm.

[Samantha Niblett (South Derbyshire) (Lab)]

I am quite astonished because, as we sat in a pub car park in the run-up to the general election, farmers in my constituency told me—I kid you not—that they know they do better under a Labour Government but they often vote Conservative. It feels like the Conservatives have taken their loyalty for granted. The right hon. Gentleman has been talking about how hard things are, and I agree with him. Farmers talk about their margins, and those margins are tight, but who caused them to be in that situation? We are now in a position of power—

[Madam Deputy Speaker (Judith Cummins)]

Order. I remind Members that interventions need to be interventions. They should be brief and ask a question that is relevant to the speech being made.

[David Mundell]

I do not know whether the hon. Member for South Derbyshire (Samantha Niblett) was here for the speech of the hon. Member for Penrith and Solway, but he set out exactly what happened to him as a Labour MP, having given farmers assurances about what Labour would do in government and the farmers finding that they had been betrayed. Now, the choice is not final, as he said, and hopefully this debate has shown the passion of both farmers and those who represent rural constituencies.

[Markus Campbell-Savours]

I am glad that the right hon. Gentleman enjoyed my speech. Did he enjoy the bit at the end where I listed the abject failures of his Government?

[David Mundell]

I liked the honesty of the hon. Gentleman’s speech in setting out how the Labour Government had let down his voters by going back on their undertakings in relation to the policy. They should listen to what has been said in today’s debate, to farmers and to the hon. Gentleman, and they should change the policy.