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.