Banking Services: Accessibility

Richard Fuller Excerpts

Thursday 19th March 2026 Westminster Hall

[Richard Fuller (North Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Western. I join everyone in congratulating the hon. Member for St Ives (Andrew George) on not only securing the debate but opening it so clearly. He laid out the particular issue in Penzance, but in doing so highlighted common concerns about bank closures. He raised some interesting questions in his excellent speech. I am sure the Minister will address them, but I will highlight a couple that I thought particularly interesting. The first was about the manner in which the closure was done—there was no consultation. He also talked about access to banking, not just to cash. The Minister will be aware that the Labour party had thoughts on that prior to the election; I do not want to prejudge the consultation, but I would be interested in her observations about that.

The hon. Member for St Ives has been joined by several other Members. The hon. Member for Stoke-on-Trent North (David Williams) made an important point, among many, about the communal role that banks have played historically, and the hon. Member for Tewkesbury (Cameron Thomas) mentioned the impact on town centres. Those two points highlight how central bank branches were to our country’s culture. The hon. Member for St Ives also talked about the buildings that once housed the recently closed banks. The withdrawal of bank branches not only strikes at the way financial services operate in this country, but says a lot about the type of country we are. I will come on to that point later.

In his intervention, my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) raised the issue of the criteria used in the selection of banking hubs. I would be interested to know whether the Minister is considering that. The hon. Member for Cumbernauld and Kirkintilloch (Katrina Murray) talked about face-to-face banking, which goes to the nub of the matter: future trends in banking, an issue that I will raise in my own comments. The Liberal Democrat spokesperson, the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick), made a wide-ranging speech and talked about how mobile banking must be dependable to be successful, as well as the availability of mobile networks.

I had an exceptionally brief ministerial career, part of which included introducing to the House of Commons the Financial Services and Markets Act 2023, which contained the provisions that provided for banking hubs. It might be helpful to share some of my own thinking, or the thinking of the Conservative Government at the time. Some comments have been made about the impact of closures. I share people’s concerns about that issue, but the Government of the day—the Labour Government, today—must take a view on whether they will work with trends in how financial services operate in this country. They must decide either to seek to mitigate the social consequences, which is the rightful role of Government, or to stand steadfast against such changes. Patently, the decision made by the then Conservative Government, which has been supported by this Labour Government, was to work with the grain of how financial services are moving. It is about facilitating that, as far as possible, while recognising the social disbenefits that can arise.

It is fair to say that when consultations were done at the time, which was during covid, accessibility to cash was the primary focus of concerns about the decline of branches. It is also fair to say that the provisions in the 2023 Act on the future accessibility of banking were not set in stone. It was clear that we were in a period of trend and change that would require further consultation and review on how it was working, and what further trends were occurring. The Opposition welcome the Government’s taking the opportunity to look at these issues again.

To give a sense of the pace of change—this has not been mentioned so far—in 2024, for the first time, cash accounted for less than 10% of payments in this country. We need to go back only eight years for it to be, by far, the No. 1 form of transaction in this country. For those Members who are old enough to remember them, cheques now account for only 0.2% of all payments, so there has been a significant change.

On the pace of change of bank branches, since January 2015 there have been 6,700 bank branch closures, according to Which? magazine. To put that into context, there are approximately 12,000 towns in the country, and about another 100 cities. That shows the significant withdrawal of physical premises across the country. The number of ATMs has also fallen by 40% since 2015.

On the plus side, we have largely seen an end to the long decline in post offices in this country. One of the benefits of our post office network was that post offices were present in many locations, although not all, and could provide aspects of the banking services that were important to people. The change to the trend for post offices is welcome. We want our post offices to continue to provide a broad range of services to local communities. Postmasters and postmistresses are often among the most trusted people in their community, and they can provide a range of services, but of course they do not necessarily have the same level of expertise in banking that one would find in a bank branch.

That takes me on to another point. This debate was starting to look like a bit of a hit-job on Lloyds bank. I think that it was just by chance that the first three bank closures referred to were all of Lloyds branches, so let me say that this is not just a Lloyds thing; it affects all financial institutions. On the other hand, our financial institutions and banks do a very good job for people. They are effective in making sure that people have a safe place for their money and that money can be transferred from A to B. They are good at developing new products and at trying to adapt to technological change.

[David Chadwick]

The hon. Member says that banks do a very good job. Is he not aware of the numerous outages that Lloyds has had on its banking apps over the past couple of years and indeed the past couple of weeks? Those outages create a reliance on physical infrastructure for people to access cash if they need to.

Does the hon. Member also agree that the banks can afford to pay for banking hubs? It is not the Government who should have to pay for them. Does he agree that banks have more than enough to cover the cost of these hubs?

[Richard Fuller]

I have to say to my Liberal Democrat friend that the Liberal Democrats’ position is that taxing big businesses, big banks and big tech can pay for everything. I think I have heard the moneys from that being allocated to well over 20 different applications. That may have a role—it is up to the Liberal Democrats to say—but the key point I was making is that, whether we like it or not, a vast number of the things we do are moving from analogue to digital, and banking is not isolated from that. Look at the way in which people communicate, the way in which legal services are likely to change and the way in which public services are likely to be delivered. The role of Government, back in 2022-23, was either to put up a block against that or to facilitate the change. We said that we would facilitate the change.

There are contributions made through the banks to fund the banking hubs. More broadly, on the major transition of banking into the digital age, I take the hon. Member’s points about outage concerns and about someone receiving £1 million in their bank account and wondering how it got there, but overall the transition by financial services in this country has been done very well. It is important, though, that the Government of the day recognise the importance of maintaining essential banking services as a foundation for public confidence in the sector.

The issue of footfall is crucial, as is the point about being able to talk to a person. I recently went into a bank to withdraw some cash—not a huge amount, but a fair amount. I was asked, “Why are you taking your money out?” That might seem a rather intrusive question—I was going to say, “I’m putting it all on red in Las Vegas,” although I was not, obviously—but the reason for asking the question relates to a serious point that the hon. Member for Cumbernauld and Kirkintilloch made. One issue that, back in 2022-23, I did not anticipate becoming so significant was how sinister online fraud on vulnerable people would become. With just a phone conversation, people can be intimidated or forced into thinking that they have to take money out of their account, and it ends up in criminal hands.

Online fraud is an evil crime, and it can affect anyone. It is a very sophisticated way to get to people who feel vulnerable. The best defence against it is the fact of having to go into a branch of a bank or financial institution and have someone over the counter look you in the eye, see how you feel, and ask important questions to reassure themselves that you are not the victim of a crime. I take that very seriously; when I was looking at the issue a few years ago, I was perhaps not as cognisant of it as I am now. I would be interested in the Minister’s thoughts.

Notwithstanding certain disagreements about the overall role of banks, this has been a debate in which all sides have urged the Minister and the Government to look at the update and the consultation in a serious way, think about what has been done correctly and see what, in today’s world, are the best changes to be made to the regulations.