High Street Bank Closures and Banking Hubs

Stephanie Peacock Excerpts

Thursday 11th May 2023 Westminster Hall

[Stephanie Peacock (Barnsley East) (Lab)]

It is a pleasure to serve under your chairship, Mr Davies. I thank the right hon. Member for Aldridge-Brownhills (Wendy Morton) for securing this important debate. Between 2012 and 2022, Yorkshire and the Humber saw a 43% decrease in the number of bank and building society branches. Earlier this month, the Barclays branch in Hoyland announced its closure, which is of great concern to many local people. It follows a string of other branch closures in Barnsley, such as Yorkshire Bank in Wombwell, and will leave my constituency of Barnsley East with no bank branches at all, four having closed in recent years.

Physical branch closures are often justified by the rise in online banking, which has undoubtedly been a great convenience for many. However, closures risk financially excluding communities, and it is regrettable that people are no longer able to choose whether to bank online or in person. More than 3 million people aged 55 and above have still never been online, with those aged 75 and over most likely to be excluded. Furthermore, Age UK found that four in 10 over-65s with bank accounts—amounting to more than 4 million people—do not manage their money online.

While there has been a shift towards online banking, connectivity should not be assumed across the country. Rural areas are less likely to have reliable digital infrastructure, which therefore impacts their ability to access online banking. Although Labour is calling for mandatory, well-advertised broadband social tariffs for those who need them, they have not yet come about. As the cost of living continues to rise, many people find using cash easier for budgeting purposes, but it is not just access to physical money that people are seeking. It has been found that more people report wanting to speak to a real person as they become increasingly worried about their stretched finances.

There is some provision in place to establish shared banking hubs, which will offer people access to cash services. These hubs have the potential to help many suffering with bank closures, but there are still some issues to be resolved with this system. A routine trip to the bank often turns into footfall for local businesses, helping them to keep their doors open and our struggling high streets to stay alive. I hope that banks will take local needs into consideration—particularly those in rural areas where public transport is not as frequent or reliable—before continuing with further closures, and recognise the impact that removing branches can have on different groups in the community.