Closure of High Street Services: Rural Areas

David Chadwick Excerpts

Wednesday 5th February 2025 Westminster Hall

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

It is a pleasure to serve under your chairship, Ms Furniss. I thank my hon. and gallant Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for securing this timely debate.

We heard last week that the banks will be closing their doors to more customers. Lloyds Banks has decided to close an extra 136 bank branches, despite making £7.5 billion in pre-tax profit in 2023, an increase of 57 %. That followed years of tax cuts given to it by the previous Conservative Government. Lloyds has decided to reward its customers by closing its doors to them. Shame on Lloyds Bank. Banks have been permanent fixtures on our high streets for centuries. The Lloyds branch in Brecon was founded in 1778 and is part of our town’s history.

Bank closures will reduce footfall in our town centres, hurting the local economy. Pontardawe’s Lloyds bank will also close in November. More than 300 local residents have already told me about the challenges that will cause them. The elderly and vulnerable people in Pontardawe deserve to have somewhere safe and easy to go to access their own cash. The same is true of local businesses. Pontardawe is a gorgeous town with some very successful high street businesses. The bank’s closing will make life harder for those local traders.

The banks are abusing their market dominance to pile pressure and costs on to local businesses that can ill afford it. Local traders are being told to make further journeys just to access cash. That is piling the costs on to them, and our local economies will suffer as a result. Imagine being a wheelchair user in Presteigne. After the bank branch on its high street closes on 3 March, the nearest banking hub—when it opens—will be in Leominster, 14 miles away. The bus journey to get there is two and half hours. Why are we letting our banks do that to people?

While those bank branches are open the Government must ensure that they remain so. They should remind Lloyds and all other banks that the Government are in charge, setting the conditions for our banks, and not the other way round.

--- Later in debate ---

[Gareth Thomas]

We certainly want the banking industry to do more to work with us as a Government to ensure that there is much better access to financial services, in particular for small businesses. Too often, one of the big pressures facing small businesses is accessing the finance they need to expand and thrive. We know that good access to finance for small businesses is not universal; that is a challenge not only in rural areas, but more generally. We will continue to press the financial services industry generally, and banks specifically, in that space.

The Government have said that accessing physical banking services is important, which is why we are working closely with banks to roll out 350 banking hubs to provide people with critical cash and banking services on their doorstep. The hubs offer basic counter services, provided by post office staff, that allow people and businesses to withdraw and deposit cash, deposit cheques, pay bills and make balance inquiries. Many hubs also have dedicated rooms where customers can see community bankers from their own banks to discuss things such as staying safe from fraud, adding a lasting power of attorney, making payments or registering for online banking.

[David Chadwick]

Ystradgynlais is the biggest town in my constituency, and it has a catchment area of 24,000 people. People there tell me that they experience long waits when they go to use the post office, and that post office staff have lost cheques and made other errors that have created problems for local businesses. Does the Minister agree that a post office is no substitute for a functioning bank branch run by trained staff?

[Gareth Thomas]

Having some Welsh blood, I am instinctively sympathetic to the hon. Gentleman’s constituents. I would not put it in quite the way that he did, but if he and his constituents have concerns about the service that the post office provides in his constituency, I am happy to take those up. Perhaps outwith this debate, he might drop me a line or have a word; I am certainly willing to press the post office. I will come back to the question of post office banking services.

Just before Christmas, the Chancellor opened the 100th banking hub in Darwen in Lancashire. Out of the 100-plus that have now opened, 12 are located in Scotland, seven in Wales and five in Northern Ireland. This is just the start. I am pleased that Cash Access UK and LINK have announced that over 200 banking hub locations have been recommended, including a further four in Wales, one in Northern Ireland and 17 in Scotland. Among those will be a new banking hub in Wick, as the hon. Member for Caithness, Sutherland and Easter Ross mentioned. I acknowledge his work and campaigning for the banking hub in Wick, which I hope goes some way to addressing the concerns in his constituency that he mentioned.

On the question of banking hubs, I should say that where they are located is determined independently by LINK, the operator of the largest ATM network in the UK. An access to cash review can be requested via its website, which also sets out the criteria it uses for considering locations for banking hubs. These include population size, whether other banks remain nearby, the number of small and medium-sized enterprises on the high street and public transport links, as well as the level of vulnerability in the community.

When it comes to big high street banks pressing ahead with closures, we expect all banking firms to follow closely the Financial Conduct Authority’s branch closure guidance in supporting their customers.