High Street Bank Closures

Debate between Matt Rodda and Alex Davies-Jones

Tuesday 28th February 2023 Commons Chamber

[Alex Davies-Jones]

I completely agree with my hon. Friend and constituency neighbour. He will know the impact of the latest announcement of a bank closure in Talbot Green, which is used by our constituents. That is having an impact on local charities and local charity shops on our high street, because they deal in small petty cash. They do not deal in card transactions. I will come on to talk about that issue.

As I said, I secured the debate when I learnt of the latest closure in my constituency. Talbot Green, home to just under 3,000 people, will lose yet another high street bank branch, with Barclays set to close in May. Having already lost HSBC in 2021, as well as Lloyds previously, Talbot Green’s residents will be left with no dedicated high street bank whatever. Across my communities and the many communities neighbouring my constituency, the story is the same: residents are abandoned by their banks and are now forced to travel unacceptable distances to their next nearest branch. In Tonyrefail, Barclays closed in 2015 and Lloyds closed in 2016. In Church Village, Lloyds closed its doors in 2021, leaving the entire village with no dedicated bank at all. Even in Pontypridd town centre, where thankfully several high street branches remain open, the loss of the HSBC branch in 2021 is still part of a worrying trend.

Too many of my constituents are now left with no high street banking presence in their communities. Consider this example: a constituent in Tonyrefail, who does not drive and who is a member of a bank whose nearest branch is now in Pontypridd town, would now be forced to travel for over an hour each way on public transport, catching four buses in total for a return trip.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent speech that picks up on issues around the whole country. Does she agree that there is a particular problem for people who are disabled and immobile? Even when they are able to get public transport, they may find themselves in a large town centre, some distance from a bank branch and facing considerable difficulties getting to the door of that bank.

[Alex Davies-Jones]

I completely agree. For someone who is disabled, elderly, otherwise vulnerable or just does not have a car, the closure of bank branches can be truly devastating. Across the country, it is a similar picture. In some parts of the UK, customers are facing an astonishing 40-mile round trip just to access their bank. That is not good enough.

We all know that face-to-face access to high street banks is a vital service for the most vulnerable in our society. For many constituents who do not use the internet regularly or, in modern-day Britain, do not have reliable enough broadband, online banking is not an option. I fully appreciate that the way consumers spend money has changed and that digital payments now dominate transactions—in part, accelerated by the pandemic. That in itself is no bad thing. Making commerce easier and more convenient for customers and businesses alike should be good for our economy and our high streets. As Labour’s shadow Digital Minister, I have seen at first hand what a digitised economy that works everyone could look like.

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[Matt Rodda]

My hon. Friend is again making an excellent point about the importance of cash purchasing. Does she agree that this is a huge issue for certain small businesses that still trade in cash? Even though, as she rightly says, the digital economy is progressing, we all know that in certain sectors of the economy cash is the only means of transaction.

[Alex Davies-Jones]

I completely agree. I come from the proud market town of Pontypridd. As I will go on to talk about, for many traders it is not profitable to operate with purely card payments. They operate in very small monetary values and cash is a main aspect of their business model, so it is absolutely vital that we have that presence on our high street.

--- Later in debate ---

[Alex Davies-Jones]

I agree that credit unions can plug some of the gap. The Welsh Government are exploring opportunities with Banc Cambria, which would be a national bank for Wales with a presence on the high street, but until it is established and until our banks have a statutory duty to provide a service to our communities, services will be sadly lacking. Businesses, communities and constituents will suffer as a result.

[Matt Rodda]

I am grateful that my hon. Friend is being so generous in giving way. Is she aware that another issue for customers of some banks or building societies is that the software does not always work with post office software? If a member of the public wants to cash a cheque or take money out, it is not always possible with every single bank or building society.

[Alex Davies-Jones]

I agree. If the infrastructure does not line up, that can cause problems. It can make simple transactions arbitrary and time-consuming, especially when people are having to deal with numerous other transactions during their day. Besides, there are functions that building societies and credit unions are unable to fulfil, such as those connected with mortgage issues or people’s concerns about fraud involving their accounts. People need that presence on the high street and in the community. They need these trusted individuals who can support vulnerable customers and, indeed, the ordinary customer who just has a query and wants a chat about their account.

The Minister will no doubt be aware that the Social Market Foundation and the Treasury Committee have expressed concern about the over-reliance on post offices as a stop-gap. As I have said, such stop-gaps are unsustainable, and put far too much pressure on already overworked postal staff who, despite the vital service they provide, are not trained banking specialists. We need that trusted expertise on our high streets. The Committee also found that post offices were not an adequate environment for many requirements of face-to-face banking, especially for more vulnerable customers, not least because a post office does not provide the privacy and dignity that many bank customers deserve and rightly expect.

While post offices must be commended for the role they play in providing basic banking services, shifting face-to-face banking in rural communities to post offices is clearly not the right answer for everyone. We need to focus on protecting dedicated high street bank branches instead, and in that connection I cautiously welcome the provision in the Financial Services and Markets Bill—now in the other place—for banks to potentially share face-to-face branch services, although the exact mechanism for that is yet to be determined. Independent organisations such as Link are already involved in creating those “shared services” in some parts of the UK, and I pay tribute to the work that they do to ensure that high streets can continue to thrive. However, the Bill represents a clear opportunity to enshrine this community-driven model in law, and an excellent opportunity for the Government to address the issues that I have raised tonight.

I urge the Minister to provide the House with any clarification he is able to offer on how these shared services might work in practice, as well as the criteria by which communities that are eligible for them are now selected. None the less, research by Which? suggests that since the Government introduced the Bill, a shocking 390 bank branches have closed in the UK. It is clear that immediate action is needed, and I therefore urge the Minister to set out a timetable for the shared services to be brought online.

High street banks are the lifeblood of local economies and, indeed, whole communities in constituencies such as mine. They must not be allowed to disappear completely, and they must play a central role in the regeneration and levelling up of former industrial communities such as mine. The unprecedented rate at which they are vanishing from the high street is not only holding local economies back, but making life challenging for the most vulnerable people in society who depend on easily accessible face-to-face banking.

I look forward to the Minister’s comments on the issues I have raised, especially the commissioning of shared banking services, as I am sure that thousands of my constituents will be very interested in what he has to say. The impact of bank closures on our high streets will be—indeed, already is—truly devastating. I sincerely hope that the Minister has listened to my concerns and will finally decide to take action.