Local Bank Branch Closures

Debate between Darren Henry and Amy Callaghan

Tuesday 5th September 2023 Commons Chamber

[Amy Callaghan]

It is as if my hon. Friend had read my mind. That is exactly what I was about to mention. People on low incomes often use cash to budget, and more and more of our constituents will be doing so as the cost of living crisis worsens. Evidence from Which? indicates that there are 130 of those cash deserts in Scotland—places where there is no access to either a branch or an ATM within a reasonable distance.

[Darren Henry (Broxtowe) (Con)]

I thank the hon. Lady for allowing me to intervene, and for initiating this important debate. It is clear that online banking is not for everyone, and that we must have physical banking services in towns. I am delighted that Stapleford, in my constituency, is to have a new banking hub, which is on track for delivery in January 2024, but there is concern about towns in Broxtowe such as Beeston losing these vital services. Does the hon. Lady agree that we must continue to ensure that communities have access to physical cash and banking services?

[Amy Callaghan]

I agree that it is vital for communities to have access to cash and localised banking services. It is hardly surprising that a Tory MP has a banking hub coming to his constituency, but I thank the hon. Gentleman for flagging that up, because it is part of the problem that we are experiencing in Scotland.

Depriving people, many of whom may already be near the end of their financial tether, of access to cash heaps one more thoroughly unwelcome stress on their lives. It is entirely unreasonable to expect the entire population to bank online. There is also an argument to be made about fundraising charities and organisations, which often rely heavily on cash donations and payments. The lack of a local bank for cash deposits places an additional security risk on volunteers, causing extra pressure for both charities and individuals.

Given the finding of Citizens Advice that 90% of the population use a bank branch at some point and 40% use a local bank branch at least once a month, keeping banks on high streets should not be in question. With each closure come the expected platitudes and reassurances from the bank concerned. We, as constituency Members, engage in good faith and fight for our constituents to have access to local banking facilities, but the fact is that there is no incentive for banks to maintain a high street presence, and without that incentive, banks are gradually shifting to a far less localised business model.

I return to my earlier point that in the absence of a Government incentive, the number of local bank branches will continue to erode. Given that banks, and local bank branches in particular, provide an invaluable service for our communities, it is incumbent on the Government to act and ensure that banks do not entirely withdraw from our high streets. I have even heard from constituents across East Dunbartonshire who have switched banks so they can continue to have a local bank branch, only to find that their new bank has closed its doors months later.

The point that I and others make with each of these bank branch closures is that the banks’ suggestion of post offices and banking hubs replacing local bank branches does not stand up to scrutiny, as my hon. Friend the Member for Argyll and Bute (Brendan O’Hara) said in his intervention. Local post offices are under considerable pressure and are also exiting high streets and town centres at an increased pace, including the closure of our local post office in Milngavie precinct. Post offices are not banks; nor are they a suitable alternative to a bank. It is time the Government recognised that. Our constituents are going to great lengths to access local banking facilities, so why are the Government not helping them? Another issue relating to the closure of local banks is the notable decline in the provision of free-to-use ATMs. There are more than 14,000 fewer than there were five years ago—a steep decline of 27%—which again particularly impacts those who are vulnerable.

We all know the arguments that banks make for the closures. They say that cash use is down by 65% since 2015 and that that decline makes their cash access networks, including local branches and ATMs, less profitable. But I think we all understand that banks are not charities; they are extremely profitable corporations whose profits have increased by 87%, or £17.4 billion, since 2015. With that massive windfall they can easily afford to maintain a basic cash access network—a service that our vulnerable constituents cannot afford to lose—but that is exactly what we are seeing and the Government are doing nothing to stop it.

This is yet another in a long list of examples of how this Union is failing Scotland. We on these Benches look forward to Scotland regaining her independence—[Hon. Members: “Hear, hear!”] I thank Members for their support. Independence, when we will no longer have an unkind, uncaring Westminster Government, who we have not voted for, eroding our living standards and our high streets. Scotland’s streets and Scotland’s banks are safe in Scotland’s hands. The time has come for Scotland’s people to take back our self-government and build a brighter future.