The Economic Secretary to the Treasury (Andrew Griffith)
I thank the contributors on both sides of the House, including my hon. Friends the Members for Dewsbury (Mark Eastwood) and for Broxtowe (Darren Henry), and of course the hon. Member for East Dunbartonshire (Amy Callaghan) for securing this debate, which has rightly given her constituents a voice on something that they feel very strongly about. I know there is real strength of feeling across the House about this subject, but it falls to me to be clear that the nature of banking is changing.
As in so many other areas of the modern world, the long-term trend, whether we like it or not, is towards greater use of digital or telephone services. According to UK Finance, last year only a third of UK adults had carried out any banking activities face to face in a branch. The hon. Lady talked about Kirkintilloch, but 94% of those who use that branch also use the app, mobile or telephone services. The bank asserts—whether this is right or not I do not know—that fewer than 10 people were regularly using the branch. In the same period of time last year, nine out of 10 UK adults banked online or through a mobile app. More than nine in 10 of us are now using contactless payment methods, including throughout this House, and only 6% of people are now solely using cash. That is not limited to any particular demographic: 80% of adults aged between 65 and 74 use online and mobile banking as well, and less than a third of that age group regularly use a branch.
Peter Grant
Given that the Minister and most of his ministerial colleagues are so fond of online services everywhere else, can he explain why in these first two days back in Parliament Members have spent about three hours doing nothing while trooping through the Lobbies to vote when we could have on voted online in about two minutes flat? Why is doing things in person the right thing to do here but the wrong thing to do everywhere else?
Andrew Griffith
In the interest of time I will stick to the topic, but I am delighted that the hon. Member is here in person, as indeed are you, Mr Deputy Speaker.
Change is not comfortable, but it does happen. Let us consider payphones. It would not surprise me if Hansard had records of similar debates about the decline of payphones. At one point, at their peak in the 1990s, there were almost 100,000 payphones in this country. Today there is just a fraction of that number. Technology has moved on, and nearly everybody has access to either a landline or a mobile phone.
By the same token, it would make little sense to force a business to keep a physical branch open when developments in the market mean that eyeballs and footfall have moved elsewhere. Nor would our high streets be particularly well served by bank branches gathering dust and lying essentially unused. We need to find new uses for them—perhaps the aspiration of the hon. Member for East Dunbartonshire for independence will produce new uses for these bank branches—in the same way that so many of our communities and villages today have a Blacksmith’s Arms public house.
Brendan O’Hara
What responsibility, if any, does the Minister think the Government have for these closures? This idea that we can all be digital by default might work well in London, Glasgow, Edinburgh or wherever, but digital by default does not work in rural communities. There needs to be a solution for those who cannot access these systems, as he would have us all do.
Andrew Griffith
This Government take responsibility, and I was just about to explain how, for the first time, we have taken the statutory right to protect the use of cash. That has been on the statute book for a number of weeks after the House passed the Financial Services and Markets Act 2023. It is also why we support the very rigorous guidance given by the Financial Conduct Authority in cases where bank branches are closing.
Andrew Griffith
I will take an intervention. We are on the Adjournment and should be mindful of time.
Jim Shannon
Rural communities are probably the larger part of my constituency, and I have lost 12 or 13 rural banks. Every one of them was a focal point for customers, which hits on the important point made by the hon. Member for Argyll and Bute (Brendan O’Hara). At the same time, every one of those banks has made extra profit and extra fees, which just does not add up. Why not keep them open and share some of that dividend with all the customers who need the banks?
Andrew Griffith
The hon. Gentleman is working his way towards one of the potential answers. Colleagues have mentioned the banking hubs. When a bank seeks to close a branch, the FCA process normally includes consultation with the local Member of Parliament. The financial sector now has a consumer duty to think about putting customers’ needs first, which is one of their weighty duties. As we deal with this significant change, a number of alternatives are in place. One is the local post office, and I believe there are still nine post offices in East Dunbartonshire. As the banks’ business traffic coalesces, they can help to support the economics of a post office in a particular area. That is one opportunity. Some 99% of personal banking customers can transact in their local post office, and there are over 11,000 post offices across the United Kingdom.
Drew Hendry
A few moments ago, the Minister mentioned the Government’s move to protect the right to use cash. What is the point of that right if people cannot access cash in their community?
Andrew Griffith
I do not know whether the hon. Gentleman is deliberately failing to understand, but the protection of access to cash and the ability to deposit cash—that is important if we want businesses to continue to use and accept cash—has a requirement that people will have easy, convenient access to a free ATM within 3 miles in rural areas and within 1 mile in urban areas. That is the guidance we issued a matter of weeks ago.
Andrew Griffith
I will take one final intervention, but hon. Members would learn more if they allowed me to make some progress.
Chris Stephens
I thank the Minister for being most generous; as he knows, I have been trying to intervene for a while. There is an important issue about free ATMs and those that charge. Is he monitoring that? When a branch closes, there is clear behaviour whereby the ATMs around and about start charging.
Andrew Griffith
I would be interested to see evidence of that. The paid-for ATMs simply do not count in any way towards the provision of free access to cash. In the constituency of the hon. Member for East Dunbartonshire, there are 51 free-to-use ATMs. Only those, not the ones that charge for withdrawals, will count towards that condition of making sure our communities have decent and continued access to cash.
I understand that access to cash is just one thing and that an ATM does not provide the full range of banking services—the post offices do—but we have started to talk about banking hubs and more than 80 have been announced to date. I know that relatively few have been delivered but they are a relatively novel feature. If hon. Members who are to have a banking hub would like to see that delivery, they should work with their local planning authorities, as the biggest single impediment to opening these new banking hubs is getting through the planning process. I know that my right hon. Friend the Member for Pendle (Andrew Stephenson) is looking forward to a banking hub in his constituency. I made it a priority earlier this year to visit London’s first banking hub, in Acton, and I recently visited the Brixham hub. The hon. Member for Ealing Central and Acton (Dr Huq) is certainly not a Conservative, but I will be happy to work with colleagues to put in place these state-of-the-art hubs, which allow people not just to withdraw and deposit cash, but to carry out a much wider range of community banking services. That is very important.
Amy Callaghan
If the Minister wants to grow the frustration, that is fine; it feels as though that is becoming a common pattern. It feels as though the Government and the Minister are trying to place this into the hands of everyone else to deal with and that there is a lack of Government intervention to try to solve this problem.
Andrew Griffith
Nothing could be further from the truth. This Government have, for the first time in history, legislated for citizens of this country, including our good friends in Scotland, to have a legal, statutory right to access to cash. Moreover, we have brought forward the practical, sustainable alternative of banking hubs, to protect the ability of communities to access a wider range of banking services. We have conducted agreements for almost every bank in the country and in Scotland to be able to conduct their business through the post office network, thereby helping and saving the post offices in the communities too.
I think I have been clear. I understand that change is happening and people are not always comfortable with change. We are in the middle of a big technological shift. We all agree that people should have access to good-quality banking services. I contend that the Government are taking the appropriate action and taking this matter extremely seriously.
Question put and agreed to.