High Street Bank Closures

Ian Lavery Excerpts

Wednesday 26th February 2025 Westminster Hall

[Ian Lavery (Blyth and Ashington) (Lab)]

I beg to move,

That this House has considered high street bank closures and banking hubs.

It is always a pleasure to serve under your chairmanship, Mr Stringer. I want to bring to the Chamber a really important issue: high street banking, which in my view, has been in absolute crisis with the precipitous decline in branches operating in communities up and down this country for the past four decades. Data from the British Banking Association shows that the number of branches in 1986 was more than 21,000; at the beginning of 2025, there were fewer than 5,000. Many smaller communities no longer have a high street bank.

Banking habits have clearly changed, with many people now using internet banking, but the loss of high street banks is a bitter blow to many people, particularly vulnerable groups in our communities, such as the aged, the frail and people with disabilities, all of whom are at serious risk of financial exclusion. For example, according to the Royal National Institute of Blind People, in my Blyth and Ashington constituency there are 3,420 people living with sight loss. That is extraordinary. For blind and partially sighted people who struggle with online access, bank closures are—at the least—devastating, and that is just one prime example of the groups of people affected by the disappearance of banks from the high street.

[Jim Shannon (Strangford) (DUP)]

This is a very important subject for the hon. Gentleman and for me as well. We have lost 11 banks in my constituency. They put forward the idea of banking hubs; well, we have got one, and there is a second one on the way, but the fact is, it takes ages for them to arrive. Does he agree that what we need is urgency on the substitutions, whether they are banking hubs or alternatives, such as in post offices? If we do not have that for rural communities, then we do not have anything at all.

[Ian Lavery]

I agree. I have already mentioned the number of closures; I am not sure whether a post office can act as a back-up, because we have seen closure after closure of post offices, until eventually a number of the constituencies up and down the country have no facilities whatever.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The towns of Stoke, Longton and Fenton in my constituency will soon have no banking facilities at all. Link’s assessment of a banking hub is that it considers an hour’s bus journey, and a return cost of almost £5, to be acceptable parameters to say that my constituents can access banks in Hanley. Does my hon. Friend agree that, further to what the hon. Member for Strangford (Jim Shannon) said, we need not only to roll out banking hubs more quickly, but have the criteria change so that every town in every community can access a banking hub or high street banking facility?

[Ian Lavery]

That was the whole idea of bringing the debate to this Chamber. The issue is the inflexibility of Link and of the Financial Conduct Authority regulations, which means that even the smallest, most minute detail can mean that people are not going to have a banking hub. That really needs changing, for the sake of our communities. It impacts local businesses, which are also at risk of adverse effects as a result of bank closures, with reduced ability to manage their cash flows and, of course, reduced productivity due to time spent away while accessing banking services.

In my constituency, the coastal village of Newbiggin-by-the-Sea was left without a bank in 1999, meaning that for more than 25 years, local people have been forced to travel in order to access banking facilities. That is the point I make to the hon. Member for Strangford (Jim Shannon). I want to use Bedlington as an example in my contribution, too. It is Northumberland’s fourth-largest town, and in May this year, it will be left without a bank, following TSB’s decision to close its branch on Front Street West. In recent years, bank branches in Blyth and Ashington, the two largest towns in my constituency, have also closed. While they are both currently served by banking providers, I can only wonder how long that will last.

The case of Bedlington is particularly worrying. It is a proud community with a rich and in many ways unique history. During the flight northwards from William the Conqueror’s army, the body of St Cuthbert is said to have been rested at what is now St Cuthbert’s church. The town and its surrounding areas were once an exclave of County Durham, then it developed into an industrial centre, with its ironworks and multiple coal mines. The loss of heavy industry has left a huge legacy, similar to that in many other post-industrial communities. When passing through that lovely place, Bedlington, people might not understand that unique history, with its traditions and cultures, because it has got a picturesque high street. The town contains pockets of significant deprivation, and the erosion of services in Bedlington makes the lives of those who are struggling ever more difficult.

Following the announcement that the final high street bank would close, my office triggered a review with Link into access to cash. Immediately after that, Link contacted my office to apologise about the fact that a review had not been automatically triggered, as would be the normal process. We were told that the review had been fast-tracked through the initial stages and a visit was arranged by one of the Link community assessment managers.

I met with the community assessment manager in Bedlington prior to the general election, following his assessment, and I could not have felt more positive about his reflections. He was an excellent ambassador for Link and, indeed, a good, intelligent man. He had been up Bedlington’s main street and spoken to the people there long before I arrived. He was gushing in his praise for Bedlington high street, describing it as a handsome high street that was well frequented, with a mixture of local businesses. He was unable, at that stage, to confirm that a banking hub would 100% be recommended, but it was heavily suggested that that would be the preferred solution.

I was absolutely delighted at that because, as I think everybody will agree, there is a great place for banking hubs. They are a good, progressive move forward. It is inflexibility that is the huge problem.

[Esther McVey (Tatton) (Con)]

The hon. Gentleman is making a powerful speech. We all understand that when a business is struggling, it has to cut costs, but these banks are closing branches despite making billions of pounds of profit. By pulling out of towns and the high street, those banks no longer provide a service for their customers—for the elderly, the disabled and local businesses. Knowing that banks need a licence to operate, does he agree that, to solve this growing problem, there needs to be a condition that, to get that licence, banks need to serve all of their customers and actually remain on the high streets?

[Ian Lavery]

That is absolutely reasonable, is it not?

The decision by Link or the Financial Conduct Authority is basically transactional. It does not really look at the community factors—it looks at a lot of different factors, but those do not count as points toward the overall result or announcement that there will be the go-ahead for additional services. That must change. It must embrace everything that is happening; it cannot be because the banks are leaving, which they have been on pace because of the profit margins. We have to start looking after communities and vulnerable people—the frail, the elderly and the disabled—in places like that and we need to change the regulations.

[Jas Athwal (Ilford South) (Lab)]

I commend my hon. Friend on securing such an important debate and for his powerful points. On the point that the right hon. Member for Tatton (Esther McVey) just made, in recent years my constituency has become a banking desert—literally deprived of banks on high streets. For my neighbours living in Chadwell Heath, the nearest branch is some 40 minutes away and that is probably how long it takes to go from one end of my constituency to the other. Banks are not just profit-making organisations; they also offer a valuable service, and that has to be recognised. Does my hon. Friend agree that local banks as well as post offices and bank hubs have to be left on our high streets because of the service they provide, particularly to deprived communities?

[Ian Lavery]

Absolutely. It is essential and that is the whole reason behind this debate. I will get back to that.

I was more or less guaranteed, unofficially, that we had qualified in Bedlington. I was dumbfounded to see, when Link’s assessment was published some months later, that it suggested no additional services—no action to support the elderly woman from Bedlington station who banked in person on a weekly basis on Front Street, used the opportunity to speak with trusted members of staff without worrying about falling prey to scammers, met her friend for a coffee on Bedlington Front Street and took the opportunity to visit some local shops and spend a few pounds in the process.

There was no assessment of the impact on that woman, on other residents or on local businesses of allowing high street banking to be lost with no banking hub provided; no assessment of the impact on people like her who are now travelling to a neighbouring town and spending their money there instead. On inspection, it appeared that we had been turned down because there was a bank in Cramlington located 0.1 km closer to Bedlington Front Street, as the crow flies, than the regulations suggested were appropriate. That is why we were declined—because of 0.1 km—and it is time that that sort of thing was addressed.

We need to look at issues in the community such as deprivation, elderly people and those who, as the hon. Member for Strangford mentioned, are in desperate need of facilities on the high street. I immediately applied to Link and, as advised by its parliamentary liaison officer, I submitted an appeal, which was summarily dismissed without much discussion. I emphasised that Bedlington, as the fourth-largest town in Northumberland, should not need to use facilities in other towns.

[Joe Morris (Hexham) (Lab)]

My hon. Friend is making a powerful speech about a corner of the county that we share, and I am interested to hear his reflections on the communities that lose out on access to banking services. Does he agree that, with the shameful decision to close three branches in my constituency, there is a real risk that businesses in the Tyne valley, as well as elderly and vulnerable people, will lose access to those face-to-face services? Does he also agree that we need to consider the rural hinterland that is served by these larger towns when making these decisions so that rural businesses are not crippled by bank closures.

[Ian Lavery]

I fully agree with my hon. Friend from the neighbouring constituency to mine. Urban and rural areas face the same issues; we are being abandoned on the high street by these large banks. That is why we need to get the criteria changed to make sure that we allow Link—

[Ellie Chowns (North Herefordshire) (Green)]

Will the hon. Gentleman give way?

[Ian Lavery]

It will have to be very brief.

[Ellie Chowns]

On the specific point of the criteria, I could not agree with him more. It is really problematic. In my constituency of North Herefordshire, we have a banking hub opening in Leominster, now that Lloyds bank has left. However, in Kington, which does not have a bus service to Leominster, there is a fantastic post office that could be a banking hub, but it has been told that it does not fit the criteria. I do not understand why. Does the hon. Member agree that we need to ask the Government to make sure that these criteria are reassessed, because banking, especially in remote areas, is such an important function for businesses and individuals. We cannot continue with the system as is.

[Ian Lavery]

I agree totally about the transport hubs. We cannot say to an elderly, frail or disabled person, “Get that bus to the next town. It’s only three mile.” As my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned, is it reasonable to say to somebody, “If you can get there within an hour, that means you don’t need a facility.”? The criteria need to be changed.

I will ask the Minister a number of questions that I hope he will consider. I am fully aware that 100 Link hubs have been set up already, 200 are in the system, and it is hoped that there will be 350. That is really positive, but it would still leave behind and abandon lots of communities such as mine in Bedlington. The dealings I have had with Link and the FCA have been perfectly cordial, but wholly and utterly transactional. It is, basically, “Computer says no”. The legislation cannot simply focus on access to cash and ignore the loss of banking services.

I hope the Minister will agree that the current rules leave Northumberland’s fourth-largest town with no bank and no banking hub, and that they are too inflexible. It is within the power of the Government to change the regulations. Will the Minister consider asking Link to look at other community factors when assessing the suitability of a banking hub? Does he agree that all areas are unique, and should not be shoehorned into a rigid process that does not fit them? Does he agree that measuring the distance as the crow flies from the doors of the last bank to close is not reasonable, and takes no account of the distance vulnerable people already have to travel?

[Alison Hume (Scarborough and Whitby) (Lab)]

My hon. Friend is making a powerful speech. On the subject of vulnerable people, I want to say that the last two branches in Whitby have announced that they will close, and an adult gaming centre is already looking at the Halifax site. We are getting a temporary banking hub, but does my hon. Friend agree that vulnerable residents rely on having a branch, and that, somewhere along the line, the words “providing a service”, seems to have been lost to banks?

[Ian Lavery]

Unfortunately, my understanding is that high street banks want to centralise in much bigger places and make much higher profits, and do not consider the communities that the two of us serve. Does the Minister agree that the demographics of an area should be of paramount importance when assessing the need for a banking hub, and will he take steps to include that in the criteria? Does he agree that banks should commit to a local service before putting profits before communities? Does he agree that the Government should have the means to intervene in decisions such as the one I described in Bedlington and other Members described in their constituencies? If Northumberland’s fourth-largest town is being failed, something is sadly wrong. The current criteria are simply not fit for purpose. They abandon many of our most vulnerable constituents. A wholesale, root-and-branch review is required, to make life easier, not more difficult, for those we proudly represent.

Banking Services: Rural Northumberland

Ian Lavery Excerpts

Monday 2nd September 2024 Commons Chamber

[Joe Morris]

I very much agree that before a bank branch closes, we need to mitigate the consequences. We need to make sure that the rural economy has space to grow, so that people like my constituents do not face such long journeys, which are particularly hard to navigate on public transport.

[Ian Lavery (Blyth and Ashington) (Lab)]

I congratulate my hon. Friend on securing this important debate. Northumberland is a wonderful county, but does he agree that it is not just rural Northumberland that is suffering? We have banking deserts in Bedlington, Blyth, Ashington, Newbiggin and other areas. Vulnerable people are suffering greatly where the banks have just up and left without any accountability. Does he agree that we must take immediate action to look after these vulnerable people?

[Joe Morris]

My hon. Friend is absolutely right. I know how hard he fights for his constituents across Blyth and Ashington, and I know how much bank closures have impacted his part of the world, and more urban parts of Northumberland. I completely agree that we need to fight for these services in all our constituencies. I am reminded of a 74-year-old constituent who was forced to travel from Wark to Morpeth on three separate occasions in order to have a face-to-face conversation.

--- Later in debate ---

[Tulip Siddiq]

I thank my hon. Friend for her intervention. I know that she is a doughty champion for her constituents. I hear what she says about her rural constituency. Mine is not a rural constituency, but I speak to people across the country who are really struggling with digital connectivity, as she outlines. It is something that the Government are taking very seriously, and we are aware of the obstacles in the way of people trying to access services online.

I am pleased that this is my first parliamentary debate as the Economic Secretary to the Treasury, because this is an issue that is close to my heart, and one that I am determined to try to address. It is a privilege to be able to use this office to tackle some of the country’s most important issues, as my hon. Friend just said. Ensuring access to banking and supporting financial inclusion featured very highly in our manifesto, which all Labour Members were elected on. We want to ensure that our constituents manage to access the services that they deserve.

Before I get on to the meat of the topic, I will briefly provide the context. Although many people have benefited from changes to the UK’s banking landscape, such as the ease and convenience for some people of remote banking, it is clear to me that others have found it a lot more challenging. According to the consumer organisation Which? over 600 branches in the UK have closed since 2015. Bank branch closures have significantly impacted those in communities who need access to in-person banking services. I am really sorry to hear about some of the specific cases that have been raised. My hon. Friend the Member for Hexham talked about his 74-year-old constituent who has to travel so far. That example particularly stood out to me, because that should not be the case.

I assure my hon. Friend that the Government understand the importance of face-to-face banking, and banking access, to our communities. Not only is it is key to the health and vibrancy of those communities, but as he pointed out, it helps them to drive forward and benefit from our country’s economic growth, and the rural economy. To anyone listening to the debate, please be in no doubt that the Government share the objective of enhancing access to banking services, and we will be prioritising the delivery of that accordingly.

Work has already started. Obviously, we have not been in Government for very long, but even before the election we committed to working closely with banks to roll out at least 350 banking hubs, which will provide individuals and businesses up and down the country with critical cash and banking services.

[Ian Lavery]

Banking hubs are in many ways very helpful. However, will the Minister consider reviewing the criteria? I have an issue in my constituency where the distance of the nearest bank is one tenth of a mile too short to get a banking hub. Because of that, they are considering not putting a banking hub in place. Is there potential to review the criteria, to support the most vulnerable people in our communities?

[Tulip Siddiq]

I absolutely hear what my hon. Friend says about protecting vulnerable people in our constituencies. That is why a lot of us stood for the Labour party: because we want to protect the most vulnerable. I will come on to LINK, which provides the banking hubs, but if he does not mind writing to me and laying out exactly what the issue is, I can write to him about the topic and about the criteria, because it sounds as if there is a very small matter that needs looking at and I am happy to do so. I will talk later about LINK, but I ask him to make representations as well.

Public Spending: Inheritance

Ian Lavery Excerpts

Monday 29th July 2024 Commons Chamber

[Ian Lavery (Blyth and Ashington) (Lab)]

During the last Parliament, the Government paid substantial amounts to the train operating companies to make good their losses during a prolonged period of industrial dispute, causing mayhem and causing chaos to the general public. At the same time, the train operating companies paid huge dividends and they also paid their executives massive increases in bonuses. Can my right hon. Friend say how much this actually cost the British taxpayer, and can she ensure that this never ever happens again?

[Rachel Reeves]

Yes, page 5 of the “Fixing the foundations” document that we have published today sets out the pressures on public spending. On rail services:

“Pressures have emerged on rail finances, primarily due to the weaker-than-expected recovery in passenger demand”,

as well as the cost of industrial action, have led

“to a pressure of £1.6 billion”

in this financial year alone.

Economy, Welfare and Public Services

Ian Lavery Excerpts

Monday 22nd July 2024 Commons Chamber

[Suella Braverman]

I detect a bit of surprise on the Government Benches. I have risen to speak on scrapping the cap. In the grand tapestry of British politics, where the warp and weft of policy and principle interlace, it is not often that a Conservative MP will find threads of agreement with friends across the aisle, but here we are, discussing a proposal backed by Labour MPs, led by the hon. Member for Liverpool Riverside (Kim Johnson) and backed by the Liberal Democrats, the Scottish National party and many Opposition parties. It is one with which I agree, because it speaks to my profound sense of justice and, dare I say, compassion. I will say why Conservatives can and should back scrapping the cap.

Let us not rewrite history, because there has been a lot of nonsense from Labour Front Benchers about the situation that we inherited in 2010. To put it simply, we inherited no less than an economic catastrophe, and we worked hard to recover from that situation. The deficit stood at 10% in 2010; we got that down to 1.9%. Public sector net borrowing was at 10%; we got that down to 3%. We were in a deep recession, and we now have the fastest growing economy in the G7.

We had to make incredibly difficult decisions back in 2010 to reduce our welfare bill, but it is clear to me that through those welfare reforms, spearheaded by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), we overhauled an overly complex, bureaucratic system, and helped millions of people get back into work. Four million more people are in work now than in 2010. The unemployment rate is down to 4.4%—almost half what it was in 2010. We can make changes to some of the decisions that we made back then.

It is clear to me from my work with vulnerable families in Fareham that the cap is not working. It is pushing more children and families into relative poverty, causing them to use more food banks. There are three good reasons for scrapping the cap.

[Ian Lavery (Blyth and Ashington) (Lab)]

Will the right hon. and learned Lady tell the House who introduced the cap, why, and which way she voted when the measure went through this House?

[Suella Braverman]

I just set out that the parlous economic situation forced us to make impossible choices, but thanks to the improved economics and the improvements brought about by universal credit, I believe that it is time to put child poverty first and scrap the cap. There are three big reasons for Conservatives to support that. First, it is affordable. For about £1.7 billion—0.14% of total Government spending—we could quickly bring around 300,000 children out of poverty. In this improved situation, that is the fair and right thing to do. Secondly, the reason why it was introduced in the first place was to disincentivise poorer families from having more children, but that has not necessarily worked. The number of children born has remained relatively stable. As the Joseph Rowntree Foundation found, heartbreakingly, 43% of children in larger families are in poverty. The children hardest hit are those under four. It predominantly affects younger children, and those in large families. I believe that the cap is aggravating child poverty, and it is time for it to go.

I know that there is the argument, “Don’t have children if you can’t afford them.” To me, that is not compassionate, fair or the right thing to say. As Conservatives, we should be proudly and loudly the party of family. We should encourage families on lower incomes to have more children. For those families on middle and higher incomes, we should change our tax regime so that they are incentivised to have children. We have better parental leave policies, better childcare provision policies and better maternity care. I am a Conservative because I believe in the strength and the sovereignty of the family unit. We should support it, not suppress it. This is not about right or left. This is about right or wrong. Let us come together, in a spirit of compassion and common sense, to scrap the cap and end child poverty for good.