Finance Bill

Ben Lake Excerpts

Report stage & Report: 2nd sitting & Report: 2nd sitting: House of Commons
Thursday 2nd July 2020 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

Diolch, Madam Deputy Speaker, for calling me to contribute to this important debate, the importance of which is perhaps not reflected in the attendance in the Chamber today, but as the shadow Minister, the hon. Member for Houghton and Sunderland South (Bridget Phillipson) rightly said in her opening remarks, reviews of tax reliefs tend to be important not just for improving the transparency of their effectiveness but, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) said in relation to the enterprise investment scheme and the future fund, for their transformative impacts on policy. I agree with him that one of the key things that we need to consider as we move ahead is how we can encourage greater investment, especially equity investment, in regions other than London. I hope to dwell a little on that point later in my remarks.

It is a pleasure to follow my hon. Friend the Member for Aberdeen South (Stephen Flynn), who not only laid out effectively the inefficiencies of the tax reliefs system but raised the important question, which I would like to address, of whether reliefs achieve their economic objectives in the current climate and context, as we try to rebuild or at least begin to consider how we can rebuild after covid-19. Tax reliefs will have an important part to play, and it will be vital that they are channelled to those who will rebuild the economy.

I wish to speak at greater length to amendment 1 and new clause 17, both of which are tabled in my name. Both are probing amendments. I seek to probe the Government’s commitment to levelling up every nation and region of the UK by requiring them to report on the differential territorial impacts of the changes that the Bill introduces to certain reliefs and tax incentives.

Most hon. Members will welcome the Conservatives’ efforts to see balanced economic growth throughout the UK and in particular to move away from what I consider to be a hub-and-spoke approach to economic development. Over the past decade, the Government have mainly concentrated on improving connectivity between rural areas and smaller towns and the supposed economic engines of the larger cities, as opposed to incentivising and supporting economic growth in those areas themselves.

Such a centralised model has inevitably concentrated economic activity in London and the south-east. As a consequence, Wales’ potential and that of other regions and nations of the UK has been overlooked. That is perhaps most apparent when we consider the way in which public funding for certain development has been allocated. Between 2001 and 2017, London R&D funding per head totalled almost twice the UK average— £3,900 per head compared with a national average of £2,300. What is more, the trend worsened in that time. The share of the core research budget spend across the three cities of Oxford, Cambridge and London—also known as the golden triangle—rose from 42.1% in 2002-03 to 46% in 2017-18.

Perhaps just as relevant to this debate is how public spending on transport infrastructure is allocated. I note that per-head spending in London in the past decade has averaged nearly three times that spent in the rest of the UK. During the same period, the city has received five times the average per-head spend on culture. It is perhaps unsurprising, therefore, given that disparity, that the golden triangle of London, the south-east of England and the east of England also attracts the lion’s share of venture capital. Indeed, the region received 73% of all venture capital between 2016 and 2018, according to the British Private Equity and Venture Capital Association. When we reflect on this concentration of venture capital in one region of the UK, as with R&D, not only are the failings of past economic development policy laid bare, but it is difficult to deny a popular saying in Ceredigion, “I’r pant y rhed y dŵr”—or in English, “To the hollow the water runs”.

It is clear that as the world moves increasingly to a knowledge-driven economy, expenditure on R&D will be vital not only as a source of innovation that can be commercialised to form the basis of the next generation of business, but as a means of equipping people with the requisite skills for the new economy and, as my hon. Friend the Member for Aberdeen South said, the post-covid economy. It follows, therefore, that the economy of any nation or region that does not receive the right level of support will be hindered in its attempt to adjust to the challenges of tomorrow. Government support for R&D is essential for Wales in particular, to address problems that range from a low-wage economy to a looming demographic time bomb, while also building an economic platform to take advantage of trends, including automation, that could otherwise cause quite a serious long-term social risk.

New clause 17 would require the Chancellor to report on the geographical impact of changes to several tax rules, including R&D expenditure credit. It would ensure that the UK Government consider how different geographic areas benefit from taxpayer-funded reliefs so that the financial incentives can be better tailored to overcome the UK’s chronic regional inequalities. I have previously drawn attention to the concentration of R&D funding in the golden triangle, but assessments might also provoke a debate within Government about how public spending on other priorities is allocated.

In a similar vein, my amendment 1 would require the Government to consider the unsustainable concentration of private investment in one region of the UK at the expense of the devolved nations and other regions of England. As the UK Government narrow the applicability of the enterprise investment scheme, they need to consider how that will affect firms in different areas of the UK. The EIS benefits us in a great many ways—the hon. Member for Thirsk and Malton outlined them effectively in his remarks. The ways in which the UK Government can encourage the establishment in the devolved nations of venture capital funds, and therefore private investment, is so important. The geographic disparities to which I have already referred are reflected in the EIS. To pick just one example, between 2015 and 2018, only 210 Welsh firms benefited from EIS, receiving just 1.3% of the total investment. By contrast, to pick on the golden triangle again, that area received 67% of all investment. The average UK business angel investment per firm has been some 40% greater than that in Wales.

Modern advanced economies such as Germany, the Netherlands and even the USA have ensured a better geographic spread of economic prosperity, so the Government’s intention to address this policy failure is to be welcomed. However, we must make sure that the rhetoric is backed up by the reality and that the measures designed to realise such lofty ambitions are fit for purpose. My amendment and new clause would require the Government to report on the effectiveness of some tax relief schemes in this regard, and I hope that the Minister can give them some serious consideration.

[The Financial Secretary to the Treasury (Jesse Norman)]

I am grateful to everyone who has contributed to this short but interesting debate. As colleagues have noted, when we think about tax transparency, we are in what might these days be referred to as a niche area of taxation—technical, but no less important. In some respects, it is more important that we do not get lost in the detail but can come back and talk about the issues more widely. If I may, I will address the different clauses and then come to the specific points raised in the debate.

New clause 27 would require the Government to review all

“tax reliefs contained in this Act”.

It states that the review must contain

“the number of tax reliefs…the effect on taxation revenue of each of the tax reliefs…and…an assessment of the efficacy of systems for designing, monitoring and evaluating the effect of the tax reliefs.”

It asks the Government to publish the number of tax reliefs in the Bill and their effect on taxation revenue.

As the House may be aware, the Government already publish tax changes and estimates of the Exchequer impacts of policy changes in the Budget documents at each fiscal event. Moreover, Her Majesty’s Revenue and Customs monitors the effect on taxation revenue of tax reliefs after they are introduced and issues an annual tax relief statistics publication—I am sure that is closely scrutinised by all Members—which includes estimates of the costs of tax reliefs. Building on this, HMRC is also undertaking a project to expand its published costs information. I remind the House that in May HMRC published cost estimates for a further 47 previously uncosted reliefs.

New clause 27 also asks for an assessment of the efficacy of systems for designing, monitoring and evaluating the effect of a relief. As the House will know, the Government consult on new tax reliefs and proposed changes to tax reliefs, bringing in external expertise as part of the policy making cycle wherever possible. Officials are constantly working on ways to improve the policy on development, administration and continuing management of reliefs. As colleagues will know, the Government, and particularly the Treasury, keep all reliefs under review.

The Government also do evaluations of different forms. This work has included evaluations of a number of significant reliefs—some 15 since 2015. These include our R&D tax credits and entrepreneurs relief, on both of which I will say a few words later. In 2015, HMRC published an evaluation of R&D tax credits. In 2017, it commissioned an evaluation of entrepreneurs relief that led to a series of reforms, most recently the significant reduction of its lifetime at spring Budget 2020, which is legislated for in this Bill. The hon. Member for Aberdeen South (Stephen Flynn) picked up on the point about entrepreneurs relief, which he somehow regards as “the tail wagging the dog”. What he calls “the tail wagging the dog” other people would call consultation across Parliament and discussion with stakeholders. Since the measure resulted in a 90% reduction in the scope of the relief, I do not think he can claim that there is any lack of ambition in it.

HMRC will continue to monitor and evaluate reliefs and will bring forward a pipeline of further evaluations in due course. It will also consider a proposal to which I have already said I am quite sympathetic—I thank the hon. Member for Houghton and Sunderland South (Bridget Phillipson); we have discussed this before: a more systematic evaluation programme for reliefs. In the light of all this, the Government do not believe that the new clause is necessary.

New clause 2 would require the Chancellor of the Exchequer to review the impacts of the reduction in the lifetime of entrepreneurs relief that is being legislated for in this Bill within six months of Royal Assent, and specifically to review the impacts on business investment, employment and productivity in the constituent nations and English regions of the United Kingdom. I would first highlight to hon. Members that the Government have already conducted an internal review of this relief that built on the 2017 independent research commissioned by HMRC. That review considered the distributional effects and benefits of the relief against its cost in order to better understand the targeting of the relief. This, in turn, has been used to inform the reform that is being legislated for in this Bill. It ensures that the majority of entrepreneurs are unaffected. A lot of the concern about entrepreneurs relief historically has been that it is not well targeted, and this measure greatly improves the targeting. Unfortunately, the effects of the changes to the relief will not be visible in six months’ time, and for that reason I urge the House to reject new clause 2.

New clause 4 concerns the structures and buildings allowance. It would require the Chancellor to review the impacts of clause 30, which makes miscellaneous amendments to the SBA, within six months of the passing of the Finance Act. Specifically, it would require the Chancellor to review the impacts on business investment, employment, productivity and energy efficiency. Again, I reassure Members that both HMRC and the Treasury already monitor tax reliefs according to the level of risk that they are deemed to pose. It is in the nature of a structures and buildings allowance that it is configured to reflect the fact that it can take many years to erect new buildings. Claims under the SBA are ordinarily settled when businesses bring buildings into use and submit tax returns at year end. For that reason, it would be neither possible nor appropriate to try to draw conclusions on the productivity or energy efficiency impacts of these changes within such a short period.

New clause 17 would require the Government, within 12 months, to assess and report on the geographical effects of changes to business reliefs across a variety of areas. There is a concern, which I recognise, that there are geographical disparities that reflect the historical evolution of our economy in different areas. It is by no means a uniform picture, even outside London.

HMRC does not routinely require businesses to provide geographical information about where expenditure is incurred as part of claims for the R&D expenditure credit, structures and buildings allowance or intangible fixed assets. To do that, changes would be required that would create additional burdens on businesses. Those claiming the reliefs, of course, could only provide information after the year end. For that reason, it would not be possible for HMRC to have information within the 12 months stated in the amendment, even if the amendment were passed. It is not capable of being fulfilled.

Public Health England Review: Covid-19 Disparities

Ben Lake Excerpts

Thursday 4th June 2020 Commons Chamber

[Kemi Badenoch]

That is absolutely correct; I agree with my right hon. Friend. At the risk of sounding clichéd, this is a Government that we want to work for everyone, but it is not yet fully clear what drives the differences in outcomes between males and females. Some could be driven by risks of acquiring infection due to behavioural and occupational factors—again, that is something that the PHE review was not able to look at—or by differences in how women and men develop symptoms and biological and immune differences. However, my right hon. Friend is absolutely right; this is something that does need to be looked into further, and we are actively working on that.

[Ben Lake (Ceredigion) (PC)]

Twenty per cent. of all reported cases of covid-19 in prisons across England and Wales have been recorded in Welsh prisons, despite the fact that Welsh prisons hold just 6% of the total prison population. We know that a disproportionate number of those in the Welsh prison system are from black, Asian and minority ethnic communities. What plans do the Government have to work with the Welsh Government to address that racial disparity and the health implications arising from it for BME communities?

[Kemi Badenoch]

I thank the hon. Gentleman for his question. As he will know, the review was by Public Health England. I have not seen the Welsh figures that he talks about, but if he writes to me separately, I think I might be able to provide some more information after speaking to officials.

Covid-19

Ben Lake Excerpts

Monday 11th May 2020 Commons Chamber

[Ben Lake (Ceredigion) (PC) [V]]

Diolch, Mr Deputy Speaker. Let me begin by reflecting for a moment on those who have sadly lost their lives to covid-19. I extend my sincere condolences to the families and friends who have lost loved ones. One of the most moving scenes of the past few weeks has been the custom of standing on doorsteps to bid farewell to loved ones as the funeral procession progresses through towns and villages. I cannot think of a more solemn reminder of the importance of protecting people’s lives in this pandemic. I believe that this must, first and foremost, be the priority of any Government.

The impact that lockdown is having on the mental well-being of so many, especially those who live alone, should not be underestimated, but I do not think that anyone will disagree that it was necessary. In Wales, people are still asked to stay at home in order to save lives. These restrictions will remain in place for at least the next three weeks, but many constituents have contacted me overnight to convey their serious concerns about the impact that an easing of lockdown restrictions in other parts of the UK might have on Ceredigion. In particular, their concerns have centred on the suggestion made by the Prime Minister that, from this Wednesday, people in England may drive to outdoor open spaces, irrespective of distance.

Although the change applies to England alone, it is understandable that people are worried that this distinction will not be widely understood. After all, such concerns are well founded. During the UK-wide lockdown, we sadly witnessed a significant number of individuals attempting to travel to Ceredigion and other parts of west Wales, contrary to official advice. As such, the UK Government have a responsibility to emphasise, in all their public announcements and interviews to the press over the coming days, that travel restrictions remain in place in Wales for at least the next few weeks.

I would like to associate myself with the arguments made by other hon. Members that the Government should ensure that economic support measures are extended to cover the period of covid-19 restrictions and are adapted to be more flexible, particularly for sectors such as tourism and agriculture, which depend on such seasonal demand.

Others, including the hon. Member for Burnley (Antony Higginbotham), have made valuable contributions this evening about the importance of establishing an intensive testing, tracking and contact tracing regime, in the mould of that implemented in South Korea, so that we can detect, track, isolate and treat new cases quickly and effectively. I would like to end by associating myself with those arguments and paying tribute to the work conducted by Ceredigion County Council, in collaboration with Hywel Dda university health board and Aberystwyth University, on community testing and contact tracing. This work offers a solution by which lockdown restrictions can be lifted safely and in a way that gives our communities confidence. Until such a strategy is in place, however, we must act with caution, to protect lives as much as possible.

Finance Bill

Ben Lake Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Ben Lake (Ceredigion) (PC) [V]]

As others have already highlighted, the economic backdrop to this debate is unrecognisable to that envisioned only a few months ago, and it is likely that the coming months will bring further significant social and economic challenges. Before discussing the challenges facing the economy of Ceredigion, I wish to speak briefly to some of the amendments. Amendment 1, which is tabled in my name, relates to the Government’s proposal to increase research and development expenditure credit from 12% to 13%. Under the proposal, tax relief would rise by a mere 0.81%, to only 10.5%. If the Government wish to increase productivity in a meaningful way, they should consider going further and increasing that credit to 15%. I would also be interested to learn what plans the Government have to redistribute funding beyond the golden triangle of south-east England.

I support the campaign by the Women Against State Pension Inequality, and in particular the calls for the introduction of emergency measures to support women born in the 1950s who are not only waiting for receipt of their state pension but who, due to the destruction caused by covid-19, are now in even greater financial difficulty. I support the amendments that would provide employees who are participating in employee share schemes with legal protection against abuse by trustees, as occurred in the Roadchef case, and I put on record my appreciation of the work done by the hon. Member for Airdrie and Shotts (Neil Gray) on that issue. Although the amendments will not be pushed to a vote this evening, I hope the Government will consider these issues seriously and look to incorporate them in future measures.

The past few weeks have demonstrated the strength of society and its ability to respond to a crisis, but we have also seen that the impact of covid-19 will differ from person to person, between sectors of the economy, and between different countries and regions of the UK. I urge the Government to consider those differences as they formulate economic support measures.

The Institute for Fiscal Studies has identified some sectors as being particularly vulnerable to job losses in the light of the response to covid-19. According to a business register and employment survey by the Office for National Statistics, in 2018, 24% of employees in Ceredigion worked in one of those vulnerable sectors. That compares with 18% of employees in the rest of the UK. That might seem surprising to those who have not had the fortune of visiting Ceredigion, but according to a 2018 report by Universities Wales, the higher education sector generates up to 2,900 full-time equivalent jobs in the county, representing around 7.5% of total local employment. The sector has already proposed a package of measures that will ensure its survival, and I hope that the Government will consider that seriously.

Agriculture, and particularly the dairy sector, has experienced incredible volatility in recent weeks, and the restrictions necessary to contain the spread of the virus have effectively closed the hospitality sector overnight. Existing processing and supply chains have unsurprisingly struggled to absorb such a significant and sudden shift in demand. The beef and lamb sector is not immune to those challenges either. There is widespread concern that unless the Government intervene to support processors and to stabilise the incomes of the worst-hit farmers, the next few weeks could inflict serious long-term damage to such a key sector in Ceredigion and Wales by dealing a heavy blow to its processing capacity, suffering just as much as the tourism and hospitality sector, which, understandably, was asked to close in order to help to contain the covid-19 outbreak.

A survey conducted by Visit Wales, of over 400 tourism businesses, identified a number of concerns that need to be looked at closely. Businesses conveyed concerns about fixed costs, from bills and interest on loans already taken out, to the issue of refunding deposits and balances to customers. As with agriculture, the tourism and hospitality sector can be typified as seasonal. In that regard, the lockdown could not have come at a worse time.

To conclude, these businesses face the terrible prospect of a three-winter scenario, whereby they are closed for the summer months when they typically make their year’s earnings, before being plunged into yet another winter. I hope the Government can offer this sector, along with Welsh agriculture and higher education, some reassurances that bespoke support measures will be forthcoming to enable them to weather the storm.

Self-employed Persons: Financial Support

Ben Lake Excerpts

Tuesday 24th March 2020 Commons Chamber

[Steve Barclay]

The Treasury is looking at those issues in the design of the scheme. We recognise that the vast majority of self-employed people face very considerable challenges, and we are mindful of the urgency that goes with that.

[Ben Lake (Ceredigion) (PC)]

More than 400 self-employed sole traders and freelancers have contacted me over the past 24 hours, and many of them have already lost their work because of this crisis. As well as echoing others’ calls to introduce support for them as soon as possible, can I ask the Minister to ensure that such measures are backdated, as in the job retention scheme, to help to address the disruption that has already been caused by the covid-19 epidemic?

[Steve Barclay]

I hear what the hon. Gentleman says about backdating. The Treasury has brought forward a range of measures, and one of the challenges to date has been that it is not always understood what has been announced and what is already available. I draw attention to the fact that we are deferring income tax self-assessments, which will not need to be paid until January; we are supporting people through the welfare system with the measures that I announced earlier, including on contributory ESA; we are increasing universal credit and working tax credit by £1,000; we are suspending the minimum income floor for 12 months; we are increasing a three-month mortgage holiday for those in difficulty; the self-employed will be eligible to receive support with their tax affairs through time to pay; the business interruption loan scheme will be available for some self-employed individuals, up to the £5 million limit; and we have delayed IR35. Members of the House can assist our small business community, and particularly the self-employed, by drawing attention to the measures that have been announced. We in Government also stand ready to do that through a comms campaign.

Coronavirus: Employment Support

Ben Lake Excerpts

Thursday 19th March 2020 Commons Chamber

[John Glen]

I acknowledge the point on the minimum income guarantee, which I have responded to previously. On co-ordination with the Bank of England, we have worked with the Financial Conduct Authority to introduce better forbearance measures for the banks so that they can act effectively and use their flexibilities. Obviously the bridging facility that the Bank of England has brought forward for bigger businesses is also important.

[Ben Lake (Ceredigion) (PC)]

Will the Minister assure us that the package of measures that the Government intend to bring forward will offer support to the self-employed, sole traders and freelancers who may not themselves be ill but who may have already lost work due to the economic disruption of covid-19?

[John Glen]

I confirm to the hon. Gentleman that we are looking at the most comprehensive package that we can bring forward that deals with all sectors and all categories. We want it to be effective to deal with the reality of the challenges that our country faces.

Oral Answers to Questions

Ben Lake Excerpts

Tuesday 1st October 2019 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

On the subject of growth deals, may I ask the Minister, in addition to discussions on the Moray growth deal, what discussions has he had with Cabinet colleagues on the progress of the Mid Wales growth deal?

[Mr Clarke]

We are committed to bringing forward growth deals across the UK. Obviously, in the devolved Administration areas, we want to bring forward money from our side, but with effect from the Welsh and Scottish Governments as well. We want to see progress across the UK; it is not restricted to Scotland.

Spring Statement

Ben Lake Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Speaker]

Who’s up for a single sentence?

[Ben Lake (Ceredigion) (PC)]

Will the Chancellor clarify the extent to which reduced business investment and fewer tax reliefs have contributed to higher corporation tax receipts?

[Mr Speaker]

Splendid.

Making Tax Digital

Ben Lake Excerpts

Tuesday 19th February 2019 Commons Chamber

[Mel Stride]

I thank my hon. Friend for making that important point. We are encouraging businesses to engage with the software community, which has been part of our engagement more generally with stakeholders over a number of months. New software products are coming to the market all the time, and, as I have said, no fewer than 160 different products are already available.

[Ben Lake (Ceredigion) (PC)]

It is good to see that the Government recognise that accessing adequate broadband remains a challenge to many businesses, especially those in more rural areas. Will the Minister elaborate further on the exemption that will be introduced to reflect that fact, and tell us how it might apply to areas such as Ceredigion, where 9% of lines receive speeds lower than 2 megabits per second?

[Mel Stride]

The standard speed of 2 megabits per second is perfectly adequate to run the kind of software that we are looking at here. I have touched on the issue of digital exclusion, and we will ensure that businesses that really cannot find appropriate broadband speeds, that are extremely isolated or that are among the 5,000 businesses and individuals already exempt from submitting digital VAT returns are still excluded. We will look at every single case carefully and on its merits.

Santander Closures and Local Communities

Ben Lake Excerpts

Thursday 14th February 2019 Westminster Hall

[David Linden]

That is spot on, because there is a question of sustainability for postmasters. We know that a huge number of previous Crown post offices have been transitioned to franchise partners, and we are seeing evidence that those partners may no longer find the offering attractive. Interestingly, Martin Kearsley, the banking director of Post Office Ltd, gave evidence to the Treasury Committee. When questioned on whether the Post Office makes a profit by offering basic banking services on behalf of providers, he answered:

“It does not currently. We are in discussions with the banks to change that position…What we do is charge the banks for the provision of the network and the transactions their customers do with us. We then share that model with our postmasters.”

We know that profitability is an issue for postmasters, but it is not the only one. When questioned about the fairness of postmasters having to offer banking services, Mr Kearsley said:

“we have seen a huge increase in the amount of cash coming into our branches. That is challenging, we recognise that and we are working hard to address it. That means postmasters spend a lot of time counting cash. We have provided new equipment to try to help. We have modernised and streamlined the processes, so that that can be done more effectively and rapidly, but we recognise that that is a challenge for them right now and we continue to innovate to fix those problems.”

The question is how on earth we can reasonably expect the post office network to pick up the slack from banks that have abandoned their customers, when the current model is demonstrably not sustainable.

That leads on to the question of the level of service provided. Although many everyday banking transactions can be completed at post offices, there are restrictions on what can and cannot be done. There are limits on deposits and withdrawals, for example. Currently, only 5% of consumers withdraw cash, and 2% deposit cash, primarily at a post office, and there is anecdotal evidence from Citizens Advice to suggest that level of service may be a major factor in that.

The lack of regulation is also concerning. While banks are regulated by the Financial Conduct Authority, the Post Office is not. Banking customers are not necessarily Post Office customers, so the same duty of care simply does not exist. Let us face it: franchise holders are in this to make a living, and banking is not profitable for them. When staffing and training costs are factored in, banking can be loss-making for post offices. All things considered, while I am sure that some postmasters will go above and beyond, they are certainly not compelled or incentivised to do so.

When all is considered, it is little surprise, then, that post offices suddenly close. There are 35 fewer permanent post offices in Scotland today than there were in 2011. On top of that, communities continue to be plagued by temporary closures. In my own constituency, Tollcross post office closed in December 2017. Although the Post Office calls it a temporary closure, in reality it has still not found someone willing to take the service on, 14 months later. That is just one community suddenly left without service.

In the neighbouring constituency of Rutherglen and Hamilton West, I gather that the post office in Rutherglen closed suddenly without explanation last June, leaving thousands of people without service in what is a highly populated area with a busy high street. In the Glasgow North West constituency, the Dumbarton Road post office closed suddenly in November last year, with local residents left in the lurch ever since. When these offices shut, there is no replacement service. The Post Office does not offer a mobile service in the interim. There is no universal service obligation in place to ensure that an alternative service is offered on a temporary basis while the problem is fixed. In reality, communities are simply left without.

[Ben Lake (Ceredigion) (PC)]

I congratulate the hon. Gentleman on securing this important debate. He makes the good point that when branches close, there are often no alternative sources for people to access cash and banking services. My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) fully supports the hon. Gentleman’s endeavours, but unfortunately he is engaged in the debate in the main Chamber. My hon. Friend has seen, just as I have in Ceredigion, that when branches close, the post office network is often simply not there, and communities are left in the lurch.

--- Later in debate ---

[Kirstene Hair]

The hon. Gentleman makes a vital point. Many people want face-to-face interaction. For some people, the person they speak to when they go to the bank might be the only person they speak to all day, so it helps with combating loneliness, which we all know is so important. The hon. Gentleman makes the very valuable point that these staff get to know people; they create a relationship with their customers and look out for them on a personal basis.

As for the Post Office offering, one in three rural post offices closed between 2000 and 2009, and that decline has continued. We have to understand that post offices cannot always and will not always be able to accommodate all those who want to use them. It just seems to me that this is such a short-term approach, because if we have no post offices, if we have poor broadband and if we do not have mobile coverage, the digitisation method and post offices do not support all customers but support only a proportion of them. It is really important that Santander tries to explain to customers who do not have those points of access how it will still be a banking provider that those customers would want to deal with.

Protecting our high streets is also incredibly important. My high streets across Angus and in constituencies across the country are struggling very much. Post offices and banks are central to our high streets. They ensure that we have continued footfall day after day. When these sites are lost, the potential for these areas is hampered. Let us take the town of Kirriemuir in my constituency as an example. Kirriemuir was nominated in the Great British High Street Awards 2018; in my eyes, it was robbed, because it did not win. The area has a fantastic variety of high-quality local businesses that support numerous initiatives, for local residents and benefit the community. I am thinking of the efforts of the Kirriemuir and Local Business Association and Kirrie Connections. That is a high street shop, but in fact it is a dementia hub, which I visited only last week. People go there to spend time with those who are going through similar experiences to them.

I had the pleasure of being there when the judges were in Kirriemuir and looking round the town, which has so much pride in its offering. But now, it has lost its last bank. It will lose its ATMs. Businesses are forced to react because, as hon. Members have said, where will customers get their cash? Will investors be put off from coming to the town? Where will local businesses deposit their takings? When I was going round as part of small business Saturday, businesses raised with me time and again the fact that there are more card transactions because less cash is available and the fee on those card transactions is absolutely hammering them at a time when things are very difficult on our high streets. In addition, what of those constituents who want to use only cash? I understand that elderly people do not want a bank card or credit card; they want to pay only with cash. Why should we suggest that they should not be able to do so, if a bank and ATM are removed?

At a time when we should be doing everything for our high streets, we should be encouraging more footfall and not increasing the pressures, difficulties and uncertainty. One suggestion has been put forward time and again by my constituents: why cannot banks operate out of one building? Why can we not have a banking hub whereby all banks are located in one building? That means we keep a set of premises going, we keep choice for constituents and they do not have to travel as far as they might have to if a bank closed down.

[Ben Lake]

The hon. Lady makes a very important point about banking hubs. Mine is just a point of information. It is ironic that some co-located branches used to exist in my constituency in the 1970s; two or three different banks would share the same location. Perhaps it could be a case of back to the future.

[Kirstene Hair]

I thank the hon. Gentleman for his intervention, which shows that banking hubs would work. They would work in many communities. They would keep that vital place on the high street. They would keep choice and keep accessibility. Those who cannot log on online or do not want to could of course come and have a face-to-face discussion with someone in the bank. That is a really important point that we should be putting across, and I would be keen to know what my hon. Friend the Minister thinks of that proposal.

My final point is about transport, which I know other hon. Members have already discussed. Those who do not want to or cannot use phones or computers to do their banking will of course need to travel to the nearest bank branch, but customers who were using the Brechin branch will now have to travel 15 miles—it is a 30-mile round trip—to Arbroath, and those in Forfar will have to make a similar journey to get to Dundee. What about those with mobility issues? What about the elderly? What about those who do not have their own car? What about those who rely heavily on public transport links, which are also in decline? Those people have to rely more heavily on family and friends. Indeed, vulnerable groups perhaps have no choice but not getting to the bank.

It is really important that we look into all the aspects that affect our constituents. An elderly lady who came into my constituency office the other day remarked that the whole situation was crazy. I agree with her: it is far from desirable. Although I have been in this place for just over 18 months, I have always felt that the most powerful debates here are those in which we have cross-party consensus. I look forward to the Minister’s reaction on the impact that these closures will have on our high streets, on post office support—because we also see post offices in decline—and on the idea of banking hubs. We all need to work together to ensure that we soften the blow of bank closures for each and every one of our communities.