Financial Inclusion: Rural Areas
Debate between Anna Sabine and David Chadwick(1 week ago)
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Anna Sabine (Frome and East Somerset) (LD)
I beg to move,
That this House has considered financial inclusion in rural areas.
It is a pleasure to serve under your chairship, Mr Pritchard. I am grateful to the Chairman of Ways and Means for granting this debate.
Financial inclusion is the ability of people to access, understand and use financial services to manage their money and reduce poverty. I hope the Minister will agree that we need better financial inclusion across the UK. I have been heartened to hear the new Government talk about financial inclusion, but more rural areas face a whole host of issues that make the challenges around financial inclusion even greater, and that is what I will focus on today.
My constituency of Frome and East Somerset is a predominantly rural area, with a number of market towns such as Frome, Midsomer Norton and Radstock, and 150 villages and hamlets. Frome has recently been allocated a banking hub, after our last bank branch announced that it would close. Thankfully, Midsomer Norton still has two bank branches open, but they serve surrounding areas as far as the city of Bath, meaning that residents in the surrounding villages still have to travel miles to reach their nearest bank.
Access to cash and face-to-face banking is vital for about 5 million customers across the UK who may be vulnerable because of low income or age, and in rural areas many people are dependent on cash for their livelihoods. When bank branches close, which is already more likely in rural areas, residents are increasingly vulnerable because the alternatives are more physically spread out, and after losing free-to-use cashpoints, rural residents have to travel three times as far to get cash as those in urban areas.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
I thank my hon. Friend for securing this debate. Large banks are leaving our high streets at an alarming rate. Ystradgynlais, the biggest town in Brecon, Radnor and Cwm Tawe, has been denied a request for a banking hub, despite the billions of pounds of profit that Lloyds bank made in 2023. Does my hon. Friend agree with me that communities such as Ystradgynlais, which has some of the most deprived areas in Wales, should be at the forefront of moves to expand banking hubs across the UK, and that the big banks should treat their customers well and deliver a fair share of services for local residents?
Anna Sabine
It will not surprise my hon. Friend to hear that I do agree. I will come on to talk about the criteria that Link uses in allocating banking hubs.
In Frome and East Somerset, an average of £630,000 is withdrawn in cash each month, showing how vital access is for people in these areas. The two main groups most affected by lack of access to cash are the deprived and the elderly. For people on low incomes, cash can act as an effective method to budget efficiently. Many elderly people feel excluded by the increasing reliance on digital services. With BT set to swap from analogue to digital landlines for millions of customers across the UK, there are concerns that that will lead to more isolation for elderly people who rely on landlines for their access to the outside world, and in many rural areas they may not have good broadband or mobile signal either.