Financial Inclusion: Rural Areas

Debate between Joe Morris and Anna Sabine

Wednesday 11th December 2024 Westminster Hall

[Anna Sabine]

I agree with my hon. Friend that we need to tighten up and look again at the criteria to which Link is working, to make sure that banking hubs are in the right places.

To turn away from banking hubs, I would like to raise the role of the post office, which is a vital service in many rural areas. In the village of Rode in my constituency, the post office sits within the local shop and café, doing vital work in not only posting parcels but supporting the local community. We have pop-up post offices in communities such as Freshford and Mells. For the elderly, the post office is a vital support in providing information on how to deal with bills and understand their pension credits, as well as generally giving them someone to talk to. Post office branches provide basic banking services, and in small towns where a banking hub is not viable, post offices are often the only remaining financial institution for customers and small and medium-sized enterprises.

[Joe Morris (Hexham) (Lab)]

The hon. Lady is making an eloquent speech and has been generous with her time. I have talked before about the need for a banking hub in Haltwhistle, in the west of my constituency. It has, unfortunately, lost banking services. Local businesses tell me that the Post Office van that stops there infrequently is simply not enough to regenerate the local economy.

I have been pleased to hear the hon. Lady speak about the need for banking hubs to be decided on slightly more loose criteria. Does she agree that for rural areas in particular, where central towns can be the linchpin of local economies, we should look at how we underpin their economic growth when we consider where we can bring in banking hubs?

[Anna Sabine]

I absolutely agree with the hon. Gentleman.

In my constituency, cash deposits are valued at £2.1 million each month, which shows how reliant small businesses and charities are on having access to banking facilities that allow them to withdraw and deposit money.

I would also like to talk about digital inclusion. In a world that is increasingly moving online, many elderly and vulnerable people are being left behind. Older people are not necessarily comfortable using online or even phone banking. They are being forced on to those services, which reduces their financial inclusion and puts them at greater risk of financial fraud. Rural communities can find themselves doubly excluded as more banking services move online, with a lack of access to cash facilities locally and poor digital connectivity.

Banking Services: Rural Northumberland

Debate between Joe Morris and Anna Sabine

Monday 2nd September 2024 Commons Chamber

[Joe Morris]

I very much agree with my hon. Friend. We have seen far too many rural towns and rural economies facing a precipice when a bank closes. Businesses are left to deal with uncertainty and a deprivation of banking services, which has an ongoing effect on the economy, before anything else comes in. I hope that we can consider taking any steps necessary to mitigate the impact of those closures, and I agree that a move to a “last but one” system may be a more efficient way of dealing with things. Whitehaven on the Tyne Valley line is a town that shares many of the challenges that I am talking about, and that demonstrates the incredibly important nature of this debate.

In constituencies such as mine and those of my hon. Friends, many residents and businesses already travel out of town for banking. When they are there, they do other shopping. They shop in the major towns or the cities, where they have access to other shops or services. That has a massive impact on the passing trade in Haltwhistle and other towns across the Tyne Valley. Ian Dommett, the chair of the chamber of trade, said:

“For Haltwhistle, this has meant that every shop in the town has lost this trade and everyone of the Chamber of Commerce members who are retailers say they have seen a decline in business as it is now done in towns with functioning banks.”

I would argue that Haltwhistle as a town has been and continues to be let down by the Conservatives. This is a stunning indictment of policy failure. The businesses that want to drive economic growth are being hamstrung. In some cases, shops have stepped up by offering some elements of consumer banking, such as cashback services and having ATMs in store, but they should not need to do so. Businesses should not be deprived of business banking when, ultimately, it is they who are the engines of our rural economy. We need to move away from the significant economic disruption that towns such as Haltwhistle have experienced for 12 months, since August 2023.

I was incredibly proud this summer to be asked to become a patron of the Northumberland Domestic Abuse Services. Speaking with the staff there, I mentioned that I had secured this debate and was told that access to in-person banking services can be a lifeline for victims of domestic abuse. In a rural setting in particular, this can be absolutely vital. I urge the Minister to consider introducing plans for banking hubs in Haltwhistle in my constituency to ensure that residents can access in-person banking services, and to work with organisations to explore the impact that banking deserts can have on acute domestic violence.

I was proud to stand for election on a manifesto prioritising rolling out banking hubs to banking deserts, but banking hubs should not be seen as a replacement for bank branches. They should not be seen as an opportunity for bank branches to be shut down, leaving others to pick up the pieces in our communities. When decisions are made far from the communities that they impact, those decisions are inevitably worse. One of the most meaningful ways that we can support towns to grow economies, and provide opportunities for young people and security for elderly residents, is to make sure that, at the very least, they have a banking hub in place—one that does not just serve one town, but that serves communities across the rural hinterland. I ask the Minister to ensure that the Treasury strongly considers and prioritises Haltwhistle as a location for a future banking hub, to reflect the opportunities and investment that that could bring, and to provide the opportunity for businesses to grow.

[Anna Sabine (Frome and East Somerset) (LD)]

I represent a thriving market town in Somerset called Frome, and even there it was announced in May that we would lose our last bank. Given that banks play such an important role in our communities and our businesses, does the hon. Member agree that there should be some obligation placed on banks to ensure adequate provision across communities in any given constituency? We can see from the discussion this evening that it is critical to so many aspects of our public life that we have proper banking provision.

[Joe Morris]

I agree with the hon. Lady. It is important that banks recognise the almost unique role that they play on our high streets as anchor institutions; they need to be far more responsible when conditions dictate that bank branches need to close. This is not about asking them to play a charitable role; it is about asking them to play a responsible role in our economy and our society. As an MP for many picturesque market towns, I recognise the problems that the hon. Lady is having in her constituency.

It is important that we represent the impact that the infrequent availability of post office services has had on individuals in my constituency, and in particular on elderly customers, who now have to use the post office as their primary banking facility. It would be great if the Minister could join me in encouraging the Post Office to expand its participation, particularly as I know that the Government are looking to expand the pension credit take-up campaign. Finally, will she comment on how the Government are working already, and will work in future, with our fantastic North East Mayor Kim McGuinness to improve economic prosperity across some of the most rural and remote areas of our incredibly proud region?