Banks: Closures and Shared Banking Hubs

Lord Holmes of Richmond Excerpts

Thursday 27th April 2023 Lords Chamber

Asked by

[Lord Holmes of Richmond]

To ask His Majesty’s Government how many (1) bank branches have closed, and (2) shared banking hubs have opened, in the last 12 months; and what steps they are taking to minimise the former and speed up the latter.

[Lord Holmes of Richmond (Con)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my financial services interests as set out in the register.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, the Government do not make assessments of bank branch networks or intervene in commercial decisions to close branches. Banks should follow FCA guidance, including considering alternative access where appropriate. One example of this is shared banking hubs. More than 50 hubs have been announced, with four now open, and the pace of delivery is expected to accelerate over the coming months. People can also access everyday banking via their local post office.

[Lord Holmes of Richmond (Con)]

My Lords, in the past 12 months, 847 bank branches have closed or are set to close. Four shared banking hubs have opened. Does my noble friend the Minister agree that the Government need to act to ensure local banking provision, including deposit taking as well as withdrawals and advice? They must also act to ensure acceptance of, as well as access to, cash; otherwise, what currency is cash if there is no place to spend it? Finally, will the Government consider carefully commissioning a review into access to digital financial services to ensure that everyone can benefit from all the financial innovations in that space?

[Baroness Penn (Con)]

My Lords, as my noble friend will know, in the Financial Services and Markets Bill, we are legislating to protect access to cash. That covers withdrawal as well as deposit services. The Government do not plan to mandate the acceptance of cash. That would be an unprecedented intervention. However, the increased access particularly to deposit services for businesses should allow those who wish to continue to accept cash to be able to do so on a more sustainable footing. My noble friend makes an interesting suggestion. The Government are working hard to ensure financial inclusion, including digital financial inclusion. I will think about his suggestion very carefully.