Bank Closures and Banking Hubs

John Hayes Excerpts

Thursday 5th June 2025 Commons Chamber

[Lewis Cocking (Broxbourne) (Con)]

I commend the hon. Member for Blyth and Ashington (Ian Lavery) for securing this important debate.

Like so many places across the country, bank branches have closed at an alarming rate in my constituency. Not so long ago, residents could pop down to a branch of every major high street bank in the towns of Waltham Cross, Cheshunt and Hoddesdon. Just last week, Halifax became the latest bank branch to shut its doors in Waltham Cross, while in Hoddesdon the former site of the Barclays remains empty, a scar on an otherwise vibrant town centre. In my town of Cheshunt, a town of 40,000 people, not a single bank branch remains. That simply cannot be right.

The lack of in-person banking facilities is depriving people of access to vital services. For so many older and vulnerable people, it is causing huge difficulty and frustration, as they are forced to rely on digital services such as apps and smartphones.

[Sir John Hayes (South Holland and The Deepings) (Con)]

My hon. Friend makes a powerful point, and I particularly wish to draw his attention to the plight of blind people. Royal National Institute of Blind People research in 2023 found that 28% of blind and partially sighted people never used the internet, they struggle with ATMs, and they struggle too with travel to banks.

[Lewis Cocking]

I completely agree with my right hon. Friend. It is really important that we expand the rules to get banking hubs in more locations across the country. Not least of all, my nan does not do online banking. Every time I go and see her, she badgers me about it. She will specifically bank with someone where she can have face-to-face services, because she will not do online banking. It is a real struggle, because some banks say, “Well, you’ve got to telephone.” But even then, one has to have a smartphone to get a code on the app for security, so it is very difficult for our older and disabled constituents to access those vital services.

When Barclays went from the high street in Hoddesdon, it did a “Barclays local”. Through the good work of my Conservative-run Broxbourne council, we managed to get it into the Spotlight, our local theatre, but it is cashless. That is nonsense! Its bread and butter business as a high street bank is to deal with cash and get people access to its cash and banking services, but it wants to run a service that is now cashless. We tried in Cheshunt—as I said, a town of 40,000 people with no banking services—to get the NatWest banking van at the car park of our Laura Trott sports centre, but again it would only offer a cashless service. This is bread and butter to the high street banks. They should accept cash and we should bring forward legislation to ensure that our constituents across the country have access to banking services. We need to look at the rules, because waiting until the last bank is in our high street does not promote consumer choice or solve people’s banking and access to cash needs.

On buses, my constituents are lucky if the bus even turns up—we get one bus once an hour—so including public transport in analysis of banking hub locations is unreliable. We need to widen the criteria to enable more banking hubs to be opened up across the country.

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[Dave Robertson (Lichfield) (Lab)]

I do not intend to labour too long on rehashing points that have already been made. I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing the debate and the Backbench Business Committee for scheduling it.

It is very clear that access to a physical bank is important for many people in our communities. My constituency, like those of colleagues present, has not been spared the loss of banks. In Lichfield, we have recently lost our Barclays branch, but up the road in Burntwood we have a much more difficult situation: every single bank branch has been closed for a number of years. The community has stepped up, as it so often does in Burntwood, and the post office has filled the breach. There is some access to banking services, but that is not the same as a physical branch.

As I sit and listen to the debate today, I realise that there is one word that sums up the importance of this matter—regeneration. Burntwood has a high street that is almost ready to go. Some businesses are thriving and the footfall is massive, but there is not the investment to make it kick on and become a town centre of which the whole town can be proud.

In Lichfield, where the banks are more present, there is a thriving cafe culture. Although everything is not all sunshine and rainbows in Lichfield and it never will be, we can really see the difference in the two town centres. What we are seeing here is almost an unvirtuous circle, where high streets start to struggle, footfall drops off, banks start to struggle and withdraw, footfall drops further, shops struggle more, and so on. It is a spiral to the bottom.

[Sir John Hayes]

The hon. Gentleman is becoming an hon. Friend. What happens is that the banks encourage their customers to do things online. You cannot open an account in a branch—where branches still exist—and then say that online banking is replacing face-to-face contact.

[Dave Robertson]

It is important to say that internet banking is not going away. These two ideas—face-to-face banking and internet banking—should be two sides of the same coin. All our high street banks should recognise that they have a responsibility to both ways of working. I prefer to bank online because I am busy and spend half my life on trains, but there are people who do not have that luxury, as they are technologically reluctant to engage. I hear many people ask the Government, “What can we do to get more banking hubs? What can we do to encourage more physical banks?” That is something that I would support, particularly for towns such as Burntwood, where bringing those banks back could be that spark of regeneration—the thing that starts to reverse that unvirtuous circle, so that it becomes a virtuous circle, where those banks are present and they drive footfall: it is easier to get cash, easier for businesses to bank there and easier for the high street to come back.

We all know that the high street is the physical representation of how people feel the economy is going. One reason people are so worried about the economy is that our high streets have been failing for decades. Governments have not supported high streets for far too long, and I am proud that this Government are saying that they will now do so. Getting banks back on to the high street, where they belong, can be that first step for towns such as Burntwood and the others that we have heard about in today’s debate.

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[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Blyth and Ashington (Ian Lavery) on setting the scene and on his introduction of the issue. As an MP for an area that has been hard hit by the removal of 11 banks, first in rural villages and now increasingly in even the main towns of Strangford, the issue is incredibly important. We need the regulation of access to banking services in legislation and to stop the drain towards online and city-centre banking only.

Millions of people in the UK still rely on cash day to day; in fact, some 1.1 million people in the UK remain unbanked and rely entirely on cash, while more than 8 million adults report that they would struggle to cope in a cashless society. A YouGov survey found that nearly 28% of small businesses use cash at least weekly. The British Retail Consortium has shown a rise in the use of cash for the second year in a row to 20% of transactions in 2023, as more and more people use cash to manage their budgets in a difficult economic environment.

While closing branches, banks have managed to increase their profits by some £2.5 billion. It is clear where their focus is. However, once the banks are closed and the profits are allocated to shareholders, how will they continue to up the profits? What services will be removed next? The percentage of branch closures is lower in larger and medium-sized towns and highest in villages and smaller communities, at 50% and 70% respectively.

[Sir John Hayes]

That is why the Link criteria need to change, is it not? The trouble is that rural areas are disproportionately damaged by the fact that the population size is not big enough. People cannot get access to banking in The Deepings, Long Sutton, Donington and elsewhere in my constituency. I am sure it is the same in the hon. Gentleman’s.

[Jim Shannon]

The right hon. Gentleman is absolutely right; that is replicated not just in his constituency and mine, but probably in those of everyone here today. Those in rural areas are twice as likely as those in urban areas to depend on their local post office branch for cash and banking services. With 11 banks closing and two banking hubs opening, we depend more than ever on the post office. We have credit unions but what we can do with them is very limited, despite being very welcome.

While bank networks decline, the Post Office continues to provide free and convenient access to cash through its branch network. However, the branch in Newtownards in Strangford is set to close—there is potential for that to happen, anyway—and that is absolutely devastating because the range of services that are not available in the local garage, which has a sub-post office, will only grow. Even the Post Office must therefore rethink its obligations.

Through the banking framework that the Post Office has with 30 UK banks and building societies, postmasters support over £3 billion in withdrawals and deposits each month, providing a trusted, convenient face-to-face service at the heart of communities. However, large branches such as the one in Newtownards must be left open if we are truly to have a full service.

According to Age UK, 27% of over-65s and 58% of over-85s rely on face-to-face banking. Nearly a third—31%—of people over the age of 65 said they were “uncomfortable” with the idea of banking online. The age sector must be protected, and the way to do that is to require legislatively a better minimum service from banks and post offices that are trying to fill the gap but are pulling back.

So what do I want? I want banks to be required through legislation that they deliver for their customers. I want to ensure that the post offices, including the main post office, are in place in my constituency and to see opportunities through credit unions. I look to the Minister to outline how the Labour Government will protect access to cash, face-to-face banking and a full-service post office in each area.

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[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.

[Sir John Hayes]

The clue is in the phrase “banking service”. It is about providing a service to people. As the hon. Member for Lichfield (Dave Robertson) said, banks dignify communities too. This is about personal interactions, trust and building relationships. That is what we do when we go into a bank, and we could never do that in the same way online.

[Mark Garnier]

My right hon. Friend makes a good point. This is about face-to-face relationships, not something done through an app.

Behind the statistics I cited are real people and real communities. The digitally excluded, older people, those in poor health and people with lower financial resilience mostly rely on cash. Small businesses and rural communities are hard hit. The question for Members who want to compel banks to keep branches open is how much digital-first customers should be charged to retain loss-making branches—notwithstanding, of course, that profit question.

Of course, the answer cannot simply be to do nothing and to walk away from our responsibilities to those who are left behind. The previous Government recognised the importance of maintaining essential banking services as a foundation for public confidence in this sector. Through the post office network, we provided a system of free and convenient access to banking services, and the banking framework partnership between the Post Office and over 30 of the UK’s banks and building societies means consumers and businesses can access basic banking services through the post office network. The Post Office now has more branches than all the banks and building societies combined, and according to the Financial Conduct Authority, post office branches make up more than 66% of all branch-based cash access points in the UK. The last Government also introduced banking hubs, which we have heard a great deal about.

I am conscious of time, and I do not want to incur your wrath, Madam Deputy Speaker, so although I have a lot more to say, I think it would be prudent for me to step aside and allow the Minister to face up to the passion about this issue from Members representing their communities.