Financial Inclusion: Rural Areas

Matt Rodda Excerpts

Wednesday 11th December 2024 Westminster Hall

[Anna Sabine]

I totally agree. I had not considered that for my speech, but I will take away unregulated moneylending as a point to note.

Since the Financial Conduct Authority changed its regulations, Link has been able to do some valuable work to provide cash access to local areas. However, I urge the Government to look at how to make the regulations for Link more flexible to allow it to work on a case-by-case basis, as the current criteria do not take into account certain geographical and other barriers that affect rural areas. We know that 93% of people live within 1 mile of an ATM, which on paper sounds good, but it does not take into account issues that might come up in rural areas. For example, if someone lives in a village or hamlet, that 1-mile walk might have no safe walking routes and no bus connection. That is why we want to see the legislation expanded to include specific geographical, physical and societal barriers, so that they are taken into consideration.

[Matt Rodda (Reading Central) (Lab)]

The hon. Lady is making an excellent speech about both the accessibility of banks and other financial services and the challenges faced by residents in rural areas. In my Reading Central constituency, we face similar challenges with the large village of Caversham, which is now part of Reading. Many Caversham residents struggle because they have to go into Reading town centre. Although it is pedestrianised, it can be quite an intimidating journey for someone who is disabled, and perhaps involves a bus journey for someone with limited mobility. Does the hon. Lady agree that there is a valid point about the location of banking services in terms of how close they are to parking and residents homes, and that short journeys are much better for disabled and vulnerable residents?

[Anna Sabine]

I totally agree with the hon. Member; that is exactly the point that we are trying to make. I believe Link wants the flexibility to make more subtle judgments, rather than working on a flat assessment structure.

With the closure of bank branches, banking hubs are becoming a lifeline for many towns, reinvigorating high streets and increasing football—footfall, even. They probably increase football as well. Frome residents are excited to have their banking hub open soon.

--- Later in debate ---

[Emma Hardy]

Absolutely. Link is covered by the Financial Conduct Authority, which has a duty to promote growth. The criteria on which it bases its decision include whether there is a bank branch remaining, the population size, the number of shops on the high street, the distance to the nearest bank branch, the public transport links and the vulnerability of the population. I urge Members to appeal if they find themselves unsuccessful the first time around.

Alongside access to cash, I know that constituents are concerned about challenges in accessing in-person banking. As has been highlighted in this debate, that is particularly an issue for individuals living in rural areas, where in-person services are less easily accessed than in urban areas.

[Matt Rodda]

Does the Minister agree that an important point is that disabled and vulnerable people want to speak to another person? Getting advice and guidance from a qualified person who represents the bank and can help them with their banking is something that particularly concerns my constituents. It can also apply to small businesses, many of which want the ability to engage with bank staff to discuss their own financial matters.

[Emma Hardy]

I absolutely agree that that is important. On the issue of vulnerability, sometimes in-person services are a way in which financial coercion can be identified, which is always a huge concern. That is why the banking hubs are so important and the Government are committed to rolling them out. It is completely in character for my hon. Friend to highlight the need to support vulnerable people in his constituency.

My hon. Friend the Economic Secretary to the Treasury is working closely with the industry to roll out 350 banking hubs across the UK, which will provide individuals who need face-to-face support with critical banking services. As I say, I am personally hugely supportive of the banking hubs.

We are taking further steps to ensure that individuals can access the financial services and products that they need. Last week—I was very excited about this—the Government announced a financial inclusion strategy to further tackle the problems of financial inclusion. The strategy will be supported by a committee that the Economic Secretary convened for the first time last week. The committee brings together consumer groups and the financial sector to consider a range of barriers to inclusion for excluded groups, focusing on key policy areas such as access to banking, insurance and affordable credit, another huge problem for vulnerable people.

It is clear that there are significant challenges that need addressing. A quarter of adults have less than £100 in savings. Over a million adults are unbanked. There is a reported £2 billion of unmet need for credit, and over 8 million people are struggling with financial debt. Under the financial inclusion strategy, the committee will be working with consumer groups and industry to develop a strategy, considering a range of barriers.

To tackle the long-term issues effectively, we need to listen to the voice of experts. That is why we have convened this group, which will be tasked with drawing on relevant expertise across the sector and on lived experience. We will also be listening to people on the ground, because this will require a joined-up approach across Government, the financial services sector and frontline organisations. We will be engaging widely on this agenda to ensure that the strategy considers a wide range of frontline perspectives.

The strategy will be published next year, following extensive work by the Financial Inclusion Committee to consider the barriers to access and solutions to address them. It is important that we take the time to get this right and seek input from those who are most affected by the issue of financial exclusion. That is why the Government have made clear our commitment to going further in tackling it. While that work is in its early stages, I know that the Economic Secretary recognises its importance to our constituents and will keep the House updated as it progresses.

I thank the hon. Member for Frome and East Somerset again. It has been a pleasure to participate in her first Westminster Hall debate, and I thank all hon. Members for participating. There is a lot of support in this room for banking services, and a recognition of the importance of face-to-face services and access to cash. It is crucial for everybody in our society to have access to the financial services they need, regardless of where they live.

Question put and agreed to.