Banking Hubs: Rural and Post-Industrial Communities
(1 day, 6 hours ago)
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Sir Desmond Swayne (in the Chair)
I will call Ann Davies to move the motion and I will then call the Minister to respond. I remind other Members that they may make a speech only with prior permission from the mover of the motion and the Minister. As no other Member has approached the Minister, nobody else will be speaking, unless it is through an intervention. There will not be an opportunity for the Member in charge to wind up.
Ann Davies (Caerfyrddin) (PC)
I beg to move,
That this House has considered banking hubs in rural and post-industrial communities.
It is a pleasure to serve under your chairmanship, Sir Desmond. It is unfortunate really that this is a 30-minute debate. So many people have been in touch to make interventions or speeches, including the right hon. Member for South Holland and The Deepings (Sir John Hayes) and my right hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts), but as you mentioned, Sir Desmond, it is impossible to fit everybody in.
I am pleased to lead the debate on this important topic. Access to cash and banking services is a pressing issue in rural and post-industrial communities. I hope to outline why we desperately need to increase the availability of services through banking hubs in those areas.
Jim Shannon
I will just say that so many people are here because the hon. Lady has brought up a subject matter that is worth more than 30 minutes of debate. Does she agree that the only goals that banks seem to have are bigger dividends and more profit? When they close branches there is a dramatic effect on rural life in her constituency and in mine. Is it not time for banks to look not at profit, but at the people and customers that they should be supporting?
Ann Davies
I totally agree, and I will come on to that later. In 2006, cash accounted for 62% of all payments in the UK. It now accounts for around 14%, with some forecasts taking it down to 6% in 2031. However, if we look beyond those percentages, we can see that cash still plays a vital role in people’s lives. For many, cash is indeed king.
New figures from Link, which accounts for 77% of the UK’s entire ATM network transactions, show that cash continues to be central to how millions of people manage their money. In 2025, £76 billion was withdrawn from Link ATMs, in 1.27 billion transactions recorded across the year. Link notes:
“While ATM use naturally evolves as more people choose digital payments…cash remains a trusted and widely used option.”
Link data shows that the most popular places in which to use cash remain convenience stores, supermarkets and payments between friends and families.
Dr Savage
In my rural constituency, mobile banking hubs, including mobile vans and post offices, are absolutely vital, especially for older constituents who still prefer to use cash, and for rural businesses that need to pay in cash. Recently, services in Hullavington and Minety were suspended, which was a real problem. Does the hon. Lady agree that in rural communities, mobile banking vans are not a luxury, but an essential service, not just for the people using cash but for the businesses and pubs where cash payments are made?
Ann Davies
Absolutely. Unfortunately, as of December last year, those post office vans no longer accept cheques. Some people of a certain generation still use cheques, but those cannot now be paid in by using a post office van, as we have in our village. Someone must physically go to a bank to pay in a cheque, which makes it very difficult for the elderly, especially given that in my area we do not have public transport either.
Removing local banking services risks deepening financial exclusion and placing additional strain on already vulnerable adults. Despite cash and in-person banking still being integral to many communities across the UK, they are becoming harder and harder to access. That is demonstrated by the number of bank closures across Wales. As the Welsh Affairs Committee has noted, the number of bank and building society branches fell from 695 in 2012 to 435 in 2022.
Ann Davies
I promised the hon. Member for Waveney Valley that he could intervene on me, and that will be my final intervention. I am so sorry.
Adrian Ramsay
I was waiting for the appropriate point to pre-empt the fact that the hon. Lady is clearly talking about banking hubs in rural areas. In my constituency of Waveney Valley, the market town of Bungay has been told that it cannot have a banking hub because there is already one seven miles away in Harleston, but of course in rural areas, proximity does not necessarily mean accessibility when it comes to travel times or public transport access. Does the hon. Lady agree that, in determining the criteria for banking hubs, real accessibility in rural areas needs to be accounted for, and there needs to be flexibility in the system to achieve that?
Ann Davies
Absolutely. The data is there for all.
The closures disproportionately impact less populated areas, as the distance to travel to bank branches is greater. For instance, data from 2008 to 2018 show that the greatest increases in travel distance to the nearest bank branch were in Montgomeryshire, Clwyd South, Arfon, Dwyfor Meirionnydd, and Brecon and Radnorshire. Those rural and less populated areas also tend to have older populations and less reliable internet, and experience the unique nature of rural poverty.
Ann Davies
I am so sorry, but I am going to finish.
Restricting access to cash also affects many of those living in rural and post-industrial areas. As the Financial Conduct Authority has noted, digitally excluded older people, people in poor health, those with lower financial resilience and those with lower financial capability depend more on cash. We have seen that play out in my constituency, where we have recently experienced the closure of the last bank in the town of Ammanford—a Lloyds Bank on Quay Street. The closure will leave Ammanford—a town with an area population of 23,709—without a full-service bank branch. It will impact not only the town itself but the surrounding communities of Brynamman, Glanamman, Tycroes, Llandybie, Betws and the wider Amman valley.
The decision demonstrates a worrying lack of understanding of the needs of rural and post-industrial communities. For many, online banking is not an option. For example, broadband coverage in Carmarthen is significantly below national standards. Gigabit in Carmarthenshire is 41% compared with 78% in the UK. Superfast broadband is 85% compared with 96% in the UK. Those figures demonstrate that large parts of the county, including Ammanford and its surrounding villages, lack access to the high-speed internet that is required for secure and consistent digital banking. In practice, that means that online banking is unreliable or inaccessible for many households. Mobile banking apps do not function properly, especially in areas with poor signal and slow connections.
Digital alternatives cannot replace in-person services, especially for vulnerable groups such as older adults, those with disabilities and people managing complex financial needs. A significant proportion of residents are elderly, vulnerable or without access to transport, and the prospect of travelling long distances to the nearest branch is unrealistic and unjust.
I have had many constituents contact me to express their deep concern about the closure of the Lloyds branch. One constituent told me:
“We really desperately need this facility now. I don’t think any consideration has been given to the disabled, elderly, or even younger people who cannot travel to other towns. Although I understand the Post Office will absorb some customers, it does not provide all banking needs.”
He continued:
“I understand why the banks have to close some branches, but Lloyds’ support in the past has been invaluable to this area. With a brain-injured partner, it is nearly impossible to travel to Gorseinon. This would be a major trip causing unnecessary distress and anxiety for him; disabled parking in Gorseinon doesn’t meet his needs either.”
Cash has a social value, too. Another constituent said:
“I’m old school and still like to have cash—giving my grandchild pocket money, giving tips if I go out, taxis—the list could go on.”
It is clear that cash does not just facilitate economic exchange; it creates bonds and ties within communities, an aspect that is important to smaller and rural areas.
Where do we go from here? The Federation of Small Businesses Wales has said:
“While it is unrealistic to expect a return to high street banks on every street, it is important that new models are further developed—such as banking hubs—to ensure that these services are available locally.”
Banking hubs are a key alternative to communities that have lost access to bank and building society branches. They offer easy access to face-to-face cash and banking in the communities that have lost their bank branches.
I welcome that the Government have pledged to establish at least 350 banking hubs across the UK. In Wales, there are 12 shared banking hubs, with more in the process of being set up in Gorseinon and Caergybi—Holyhead. However, I note that none are in my constituency of Caerfyrddin—not one.
The Financial Services and Markets Act 2023 gave the Financial Conduct Authority responsibility for maintaining cash deposit and withdrawal access, although not wider banking services. The FCA’s rules came into force in September 2024. Those rules require banks not to close their services in communities until they have carried out an assessment showing that the closure would not impact withdrawal and deposit services in that area. Those assessments are conducted by Link.
While such a safeguard is welcome, the process itself seems to overlook rural and post-industrial areas. It does not allow for discretion to be applied to consider the needs of those communities. For instance, in the case of Ammanford, Link assessed that there was no need for additional services like a banking hub, given that Ammanford did not meet the population threshold of 10,000 people living near the high street. It said that Ammanford had 7,444 adults living nearby, which is still a significant number, but 23,709 people live in that surround. As we know, in post-industrial areas, the town merges into the villages—or the villages merge into the town.
Residents have made it clear that they are finding it incredibly challenging losing their only banking facility. A petition is being circulated in response to the decision, and it has already gathered hundreds of signatures—I urge all in the Chamber to share my online petition. I urge Link to engage with local stakeholders, including businesses, councillors and residents, to ensure that the assessment reflects actual community needs, including by establishing a banking hub in the town of Ammanford.
Can the Minister set out how the Government can accelerate the establishment of banking hubs in rural and post-industrial communities as part of their plans? What recent assessments have been made of the adequacy of the cash access review process to account for the unique needs of those communities? Banking hubs are a lifeline for communities that are already under strain. We need prudent policymaking in this area from the Government, so that constituents like mine are not overlooked for such important services. Diolch yn fawr, Cadeirydd.
The Economic Secretary to the Treasury (Lucy Rigby)
It is a pleasure to serve under your chairmanship, Sir Desmond.
In my very best Welsh, I thank the hon. Member for Caerfyrddin (Ann Davies)—she is smiling, which makes me think that I may have got that pronunciation ever so slightly wrong—for securing the debate. It is clearly an important topic to her, given the passionate way that she spoke, and to Members, given the number of interventions. I know from my experience, not least in Treasury orals, the correspondence that I get, and the banking hub surgeries that I run in Parliament, how important this issue is to Members right across the House, so I thank her again for securing this very important debate. I also thank those who have made interventions thus far, including the hon. Members for South Cotswolds (Dr Savage) and for Strangford (Jim Shannon).
Richard Foord (Honiton and Sidmouth) (LD)
The Conservative Government passed the Financial Services and Markets Act in 2023, which gave the FCA powers to set up banking hubs and give access to cash. Does the Minister think that that was a missed opportunity at the time to prevent banks from closing high street branches in the thousands, as they have since continued to do?
Lucy Rigby
If the hon. Member would let me progress just a little further, I will cover the issues he refers to.
As I said, the strength of feeling expressed today, and more broadly in parliamentary interactions, shows just how important this issue is to Members, and to people right across the country, particularly in the types of communities that the hon. Member for Caerfyrddin represents. I recognise the particular concerns about rural and post-industrial areas, where longer travel distances, which were referred to, more limited transport and, in particular, uneven digital connectivity make the loss of a bank branch especially acute.
It is right to acknowledge that banking has changed very dramatically in recent years. Many customers have benefited from digital innovations that allow them to more easily manage their finances. For those who have benefited, those types of innovations have increased accessibility and convenience.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Minister mentions the need to recognise innovations. At the same time, we have to recognise that organisations such as banks, and also the Post Office, are very much inclined to be self-interested. In my own constituency a year ago, we lost 21 out of 25 locations for vans. The Government surely need to intervene to make sure that remote and left-behind communities are not left even further behind because these large financial organisations are looking after their own interests.
Lucy Rigby
I was going through some of the changes in the landscape of banking, and will come to a slightly more negative aspect of that, if the right hon. Member will allow me to do so. I hope that will cover the substance of her question.
The most recent data from the Financial Conduct Authority shows that over nine in 10 adults banked online or used a mobile app in 2024. We also know, alongside the statistics on digital innovations that I just referred to, that around a quarter of adults carried out banking face-to-face in a branch over the same period. I put that alongside the statistics that the hon. Member for Caerfyrddin referred to about cash usage, which I will not repeat. I make no judgment about why I am a little old school on occasion with my attachment to cash, as she put it, but we know that many of those who still rely on in-person services are older customers and more vulnerable individuals. We also know that many businesses right across this country continue to depend on cash.
Matt Rodda (Reading Central) (Lab)
In my constituency, we have faced exactly the issues that the Minister highlights, and I am grateful for the work on this, in particular, on the needs of elderly people, which is being investigated by the Government, and those who are elderly and possibly frail, who find it difficult to travel on public transport. One of the issues we have faced is a lack of access to immediate parking and support for elderly people to get in and out of branches.
Douglas McAllister (West Dunbartonshire) (Lab)
Will the Minister take another intervention on that point?
Douglas McAllister
Alexandria is one of many post-industrial communities within my constituency, and the Bank of Scotland recently announced the closure of the town’s last remaining bank, but as a result the new Alexandria banking hub opened in my constituency in November 2025, which is a very welcome addition to the high street. Does the Minister agree that that ensures crucial access to cash and face-to face-banking services for businesses and residents, especially the elderly and vulnerable, in Alexandria in West Dunbartonshire, and adds to our high street work with the Pride in Place scheme?
Lucy Rigby
My hon. Friend raises very important issues, including in relation to Pride in Place. What is so important about this debate and about banking hubs is that there is an interaction between access to cash, and the ability to speak to a bank or a community banker, and the health of our high streets and how people feel about their towns and communities.
Several hon. Members rose—
Lucy Rigby
I will give way first to my hon. Friend the Member for North West Leicestershire (Amanda Hack).
Amanda Hack (North West Leicestershire) (Lab)
My constituency, including the main town of Coalville, has a strong industrial past. Coalville is not entirely rural, so it does not qualify for a banking hub. Lloyds is abandoning my community and will close a branch in Coalville in June, despite how busy and well used that branch, on a main high street, is. Does she agree that we need to ensure that gaps in bank provision are filled as soon as possible with banking hubs, and that banking hub assessment should include access to business banking, because that is what we really lose when a main high street bank goes off the high street?
Lucy Rigby
The House will forgive me for not commenting on individual cases, but it is safe to say that I am familiar with the circumstances that my hon. Friend refers to, and I know the urgent nature of some of the issues that she—
Lucy Rigby
I will give way first to the right hon. Gentleman, and then to my hon. Friend.
Sir John Hayes
The Library has made it clear that many groups beyond the elderly and the disadvantaged, including people with mental health difficulties, people with physical difficulties and people who rely on others to pay bills for them, struggle with these issues, and they struggle all the more in rural areas like Lincolnshire. That is why 98% of MPs surveyed have said that they think there should be a banking hub wherever the last branch has closed. When 98% of MPs think something, a wise Government listen carefully and act quickly.
Lucy Rigby
As ever, the right hon. Gentleman gives me good advice and, as ever, I shall pay close attention to what he says. He rightly refers to different aspects of vulnerability and I will come on to some of those slightly later in my remarks. What is clear from the interventions that we have just had is, again, how passionately Members from right across the House feel about these issues, which is why the Government have been clear that it is critical that people have access to the services they need.
Torcuil Crichton
I pay tribute to the hon. Member for Caerfyrddin (Ann Davies) for securing this important debate. To echo the point made by my hon. Friend the Member for North West Leicestershire (Amanda Hack), I have come to Westminster Hall today following discussions with Lloyds Bank, which has decided to close the Benbecula branch of the Bank of Scotland in my constituency; there have now been two bank closures in my constituency in a few short years. That closure decision appears to be as irreversible as it is regrettable, but the danger now is that we will have no banking hub, because the banking population of Uist is too small to fit within the parameters of one. Will the Minister ensure that the banks, Link and associated authorities expand and adjust their parameters, so that sparsely populated areas and island populations continue to have access to banking services?
David Smith
The Minister has been very generous. On the specific point made by my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton), similarly in Alnwick and Berwick, in my constituency, there is an issue to do with the diminution of high street banking. Only three years ago, there were three banks in Alnwick and now there are none, and one bank is now closing in Berwick. Regarding the criteria for community banking, will the Government look at Link and other such services, and say that it is not just access to cash that should be a statutory right but access to banking?
Lucy Rigby
I can answer that very directly. We keep these issues under review, as my hon. Friend would expect. Prior to those interventions, I was talking about action that the Government have taken. Our recognition of the importance of banking services to local communities underpins what we put in our manifesto, which was a pledge to work with the industry, as the hon. Member for Caerfyrddin rightly said, to get to at least 350 banking hubs across the country.
Joe Morris (Hexham) (Lab)
I thank the Minister for being exceptionally generous with her time. I want to emphasise the point on banking hubs. I have been particularly frustrated about the town of Haltwhistle in my constituency. It is a smaller town but has a huge area that looks to it, going from Slaggyford and Gilsland up to communities nearer the Scottish border. On the current criteria, it is too small to attract a banking hub by itself, but the businesses that look to it are now forced to look to Hexham or, further afield, to Newcastle, or indeed to the west of Carlisle. That risks strangling the growth of economic enterprise in the west of Northumberland, which is already, I must say, very poorly supported by Northumberland county council.
Lucy Rigby
My hon. Friend sums up very well the links between some of the issues that we are discussing today and wider economic growth, which, as Members will know, is the Government’s principal mission.
Any hope that I might have had of reciting the names of the constituencies of Members who have contributed to the debate is fast evaporating. What I will say, on our 350 banking hubs in the course of this Parliament, is that it is important to note that that is a floor rather than a ceiling, so it is entirely possible that the 350 target will be surpassed. More than 270 hubs have already been announced, and more than 210 are now open. In Wales specifically, 17 banking hubs have been announced and 12 of them are already open.
Banking hubs do not just provide assisted cash services through post office staff and allow customers to withdraw and deposit cash. They also of course, as Members will know, provide community bankers from customers’ banks, offering customers the opportunity to speak to someone face to face about their banking needs, as they would in a traditional bank branch. I was in the banking hub in Warwick just last week and was able to meet community bankers and customers who were coming in. I saw at first hand the important benefit that having someone there whom people were able to engage with brought to those who were coming in.
Ben Lake (Ceredigion Preseli) (PC)
I am grateful to the Minister for her generosity. I agree wholeheartedly that it is important that these hubs offer that wider range of banking services, and I draw her attention to the plight of community bank account holders, who often need to have access to a service that currently is available only in a bank branch, but could be provided in a banking hub in the future.
Lucy Rigby
The hon. Member makes a strong point. I am rapidly cutting bits out of my speech, but I will cover as much as I can. Members will know that some hubs offer services that others do not. We have been exploring with the banks how services might be expanded and improved where there is a community need for that to happen. Just last month, I held a roundtable with a large number of banks, Cash Access UK and UK Finance to discuss the services currently provided in banking hubs, including access to printing facilities, which we know are really valued in some communities. Saturday opening hours are another example of the things that were discussed. Overall, that discussion with the banks was about how we improve the functionality of hubs. We also discussed what the industry might be able to do to raise awareness of the location of hubs—which we know in some areas is not as high as it might be—alongside awareness of the services that they offer their customers.
I want to spend a second addressing the important points raised about digital exclusion and particular vulnerabilities. Although many people benefit from digital services, the Government of course recognise—this is inherent in the financial inclusion strategy that we published at the end of last year—that many people face real barriers. That is exactly why digital inclusion sat alongside access to banking as a core pillar of the strategy.
The financial inclusion strategy includes an industry-led working group on inclusive design to improve accessibility right across financial products—
Motion lapsed (Standing Order No. 10(6)).