Banking Hubs

Debate between Darren Paffey and Graham Leadbitter

Wednesday 20th May 2026 Commons Chamber

[Graham Leadbitter]

Absolutely.

I turn to the inadequacies in the current framework, and I will try to make some progress. Current criteria include the number of remaining branches, the population size and the retail centre size, which is frankly ridiculous when some communities can be compact while others can have a narrow spread over a greater distance, often constrained by physical landscape and infrastructure features, such as rivers, railway lines, roads and, in some cases such as in my constituency, the foot of a mountain range. Transport distance, public transport links, population vulnerability and existing cash services are also all considered by Link. It is, however, the flexibility of those criteria that is the problem and the lack of cognisance of the wider geographic and population context, especially in areas such as the north of Scotland.

Friends in Kinross in Perthshire, while not in my constituency, noted that one criterion their community failed to meet was the retail centre requirements. They are sandwiched between a loch and a motorway, so the town can only realistically expand in two directions, resulting in smaller retail hubs rather than a bigger central area. Surely the answer is not reclaiming the loch or moving the motorway to get support for banking facilities.

Equally, the lack of progress on potential banking hubs in Grantown, Lossiemouth, Nairn and Aviemore in my constituency tells me that the current criteria are simply not good enough. Current population criteria ignore the needs of smaller hub towns in rural areas. Bus and train services to even relatively close alternatives still require significant journey planning and, indeed, cost for people who had previously been able to access facilities for free within walking distance. What may seem a relatively short distance can see a bus going off the most direct route into other communities, en route to the destination, and the return journey is not always available immediately on concluding banking transactions. In inclement weather, this process is even less appealing, and in mid-winter it is deeply concerning that elderly people may be waiting for buses in temperatures well below zero. That is very common through the winter months in the Cairngorms area where several of these communities are located.

The lack of banking facilities in Lossiemouth, for example, means that many businesses have to rely on services in Elgin, which is five to six miles away. Although that may not sound like a significant distance, travel times, paid parking and the impact of these repeat journeys to Elgin on smaller businesses’ workforces pose severe problems for Lossiemouth-based customers.

For the towns of Newtonmore, Kingussie and Aviemore, their last banks have all closed. The closest bank is in Inverness, which is up to an hour’s drive away across a distance of 30 to 45 miles. That is especially concerning as Aviemore is the UK’s principal ski resort, but locals and visitors alike do not have a bank to use. A banking hub would be a great way to boost the local economy, which is reliant on tourism and hospitality—traditionally a more cash reliant part of the economy.

For Grantown, a market town, its nearest non-Post Office banking service is now a 30-minute drive away in Forres, on a road with snow gates and snow poles that I can assure Members are necessary on numerous occasions over the winter. A banking hub would reduce journey times, costs and banking uncertainty for residents.

In Nairn, another busy town with significant tourism and a population of approaching 10,000 people, which is much higher in the summer with the tourist population added, there are no more banks in town. Alternatives are in Forres and in Inverness, but people cannot reasonably travel to and from those towns on public transport in under two hours, in addition to the time taken to transact their banking business.

Finally, I would like to point to an area not related to access to cash but to the other critical services offered by banks through banking hubs.

[Darren Paffey (Southampton Itchen) (Lab)]

The hon. Gentleman is being incredibly generous with his time. I share his frustration that from the northern parts of Scotland to Southampton, on the south coast, the criteria is completely inadequate. In fact, in its assessment for the Bitterne application, Link included bus times that simply did not exist on any timetable anywhere. Does he agree with me that when banks have been removed, an assessment of access to cash is entirely the wrong answer to the question? Does he welcome, as I do, the Government’s review, and does he share my hope that what we will actually get to is an adequate, effective tool to assess the lack of banking services?

[Graham Leadbitter]

Absolutely. I am about to talk about the critical services offered by banks through banking hubs, which addresses the hon. Gentleman’s point.

Community bankers located within banking hubs can offer much needed savings, loan and mortgage advice. Recently, a local community leader in Grantown made the strong point that basic business support, such as collecting change, depositing and withdrawing cash, transferring money between business accounts, making payments, managing cards, fraud support and money advice and even offering simple advice on how to open a business bank account, can be the difference between a business thriving and a business failing in a rural community.

Paying utility bills, depositing cheques and, for local charitable groups, even depositing the proceeds from a coffee morning or a raffle stall at a Highland Games, can make the difference between succeeding or struggling. The golden thread in all of this is that without banking hubs in the areas that need them, current policy is making it harder for people to buy their own homes, to run their own businesses and even to simply access cash in these areas.

I am pleased to acknowledge the Government’s announcement last week of an independent access to cash review, which will report in October 2026. I would have liked that work to have been done and concluded by now, but now it is in place I do not want to be churlish or grumpy about it. I know that those engaged in that review will be paying close attention to debates like this. I am sure that they will have noted the number of hon. Members from all political parties who are contributing to this debate and making their views and those of their communities known on this important issue. It is important that the regulators and the independent reviewer hear that breadth of opinion, because that will inform the response to the review.