Bank Closures: Rural Areas

Debate between Helen Morgan and Simon Hoare

Monday 24th February 2025 Commons Chamber

[Simon Hoare]

I agree absolutely. A more sensitive and refined definition of the hub-and-spoke model is also needed. If we look at the resident catchment of a market town, we can construct a compelling argument that a proposal for a hub does not stack up, but we must add in the thousands of people who live in the villages that look to it and are magnetised to it, and who will spend more money in those businesses, and the businesses themselves—not just individuals—who use those businesses.

[Helen Morgan (North Shropshire) (LD)]

Will the hon. Gentleman give way?

[Simon Hoare]

Let me give way to my hon. Friend from Surrey and then I will give way to the hon. Lady.

--- Later in debate ---

[Simon Hoare]

Let me give way to the hon. Member for North Shropshire (Helen Morgan), then I will give way to my hon. Friend.

[Helen Morgan]

The hon. Gentleman is making an excellent speech outlining the issues. In North Shropshire, four of my five market towns have lost all their banks and only two of them will get a banking hub. Does he agree that we need to look at a much wider area to make those banking hubs work, because people who work in small hamlets and villages without access to public transport simply cannot access one that is maybe 20 miles away?

[Simon Hoare]

The hon. Lady is absolutely right. Again, I hope that any of the banks or regulators who may listen in or read the report will understand that this is not an issue that divides by party; it affects constituents across the country irrespective of which party represents them in this place. The key point is to have a proper assessment of rurality and the differential of living in a rural area compared with an urban area.

I commend the Government for their support for hubs, but they need to be more physical and robust in driving them forward. It is almost as if the banks are marking their own homework as to whether the argument in favour of a hub stacks up. As Sarah Coles of Hargreaves Lansdown commented a year or so ago:

“The closure of bank branches is a vicious circle. The more that close, the more people move online”.

Of course, by definition, the more people move online, the more that almost hollows out the argument to justify creating a hub.

I understand that initially the banks were slightly reticent, just as the mobile phone operators were about shared masts—that somehow clients would be pinched and all the rest of it—but the hubs are a shared facility jointly financed by the banks. Those banks need to remember that they are still in business principally due to the good will of the British taxpayer and the Exchequer during the financial crash of 2008, who keep our banking sector afloat. They owe a little bit of payback, as a number of my constituents have been keen to point out.

The hubs seem to work and fill that gap; but as I say, marking one’s own homework and setting the rubric to decide whether a hub will work is not right. The Treasury could take a more engaged and proactive leadership role on the matter.

Oral Answers to Questions

Debate between Helen Morgan and Simon Hoare

Monday 22nd April 2024 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

8. What assessment he has made of the adequacy of the level of Government funding allocated to local authorities.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)]

In answer to the hon. Lady’s question, we make continuous assessment with regard to the adequacy of funding. In this financial year we have made £64.7 billion available to local government in England, an above-inflation increase for local authorities as their real-terms increase in core spending power is now up to £4.5 billion or 7.5% in cash terms. That includes the additional measures for local authorities, worth £600 million, that we announced on 25 January, having listened to the views of local government, to her views when she engaged in the consultation and to the views of hon. and right hon. Friends across Shropshire.

[Helen Morgan]

I thank the Minister for his answer, but we have seen Shropshire Council make £50 million of cuts this year, and we are told that there will be £60 million of cuts next year to avoid a section 144 notice. Local residents are particularly concerned about the potential closure of recycling centres and a likely increase in fly-tipping across our beautiful countryside. Does the Minister agree that rural councils are in danger of delivering nothing more than statutory services if things continue? Will he consider adjusting the way that funding is allocated so that rural councils are given an amount that reflects the cost of delivering services in their area?

[Simon Hoare]

The hon. Lady is right to point to the need to review the formula, which is a commitment for the next Parliament. She will probably be aware—I hope she is—of the £8.9 million extra that Shropshire Council received this year through the rural services delivery grant in order to deliver those sorts of services. Do I think rural councils have to reduce to statutory services alone? No. All my engagement with the sector points to a vibrancy and a commitment to innovation, shaping places and improving the lives of people up and down the country, including in Shropshire.