Face-to-Face Banking: Rural Areas

Wendy Chamberlain Excerpts

Tuesday 1st September 2026 Westminster Hall

[Wendy Chamberlain (North East Fife) (LD)]

It is a pleasure to serve under your chairship, Mr Wishart. I congratulate my hon. Friend the Member for South Devon (Caroline Voaden) on securing this debate. I am sure that many Members have had the same frustrating experiences I have had when I meet a bank that is planning to close a branch. It has all this data and statistics telling us about the number of people who use that branch, but never asks how many people would use it if they knew that they could get access to it. Link also cannot tell me why, despite the measures that are in place, the percentage of people with access to cash in my constituency continues to reduce. It is also important to remember that in many of our communities, the bank branches that do exist often have very reduced hours. Business customers in particular express real frustration to me about that.

I do not want to repeat the things that have been said today, but I want to pick up on scams and vulnerable constituents. Rural poverty is real. We all deal with it. Citizens Advice locally and food banks are seeing an increase in people’s need for support. Banks have a responsibility to improve financial literacy. In addition, rural transport is non-existent, as many people have touched on. Over the summer, I went out with a constituent who used a wheelchair. We had to take two buses to make the journey and, to add to her distress, one of the bus’s lifts was not working and the whole bus had to decant while she was left on the pavement. We need to remember that it is not always easy for people to get to banks.

I am very conscious that the party that talks about broken high streets and broken Britain is not represented in this debate, but if we think back to the past, the bank manager was someone we knew. I have a constituent who subject to a very distressing scam involving a significant amount of money. I am confident that if they had been going into their bank branch, the staff would have known them and asked the right questions to prevent the scam in the first place—it is not about the person asking for advice. The Government know what they need to do; I hope they get on and do it.

--- Later in debate ---

[Sarah Dyke (Glastonbury and Somerton) (LD)]

It is a pleasure to serve with you in the chair, Mr Wishart. I congratulate my hon. Friend the Member for South Devon (Caroline Voaden) on securing this particularly important debate. The decline in face-to-face banking services is evident across the country—just visit any high street—but it is felt most acutely in rural areas. While the Government have taken steps to protect access to cash, protecting cash is not the same as protecting access to banking services. The number of bank and building society branches has declined dramatically, from 21,600 in 1986 to fewer than 6,900 in 2025, with more closures scheduled for 2026 and 2027. In rural areas, only 33% of people live within three miles of a bank branch, compared with 93% in urban areas. When bank branches are closed in rural market towns, it does not just inconvenience people, but can be the difference between a small business thriving and a small business failing.

[Wendy Chamberlain]

One of the problems we have experienced with the Link criteria is that the town is classed as urban by the Office for National Statistics, but is actually servicing a rural community. That mismatch means that some hubs are being missed out.

[Sarah Dyke]

I thank my hon. Friend for her intervention. She makes a very good point, which I wholeheartedly agree with.

Small businesses also suffer from bank closures because they are not able to deposit their takings, transfer money between accounts, manage fraud or get simple advice on opening a business account. This has a large impact on small businesses in rural areas. For local charities, closures can mean the difference between banking the proceeds of a coffee morning and not banking them at all.

This also demonstrates the impact of the rural premium that people in rural communities face when living their everyday lives. My constituency of Glastonbury and Somerton has felt the full consequences of the decline. Many market towns have lost all banking facilities already, and the Lloyds branch in Street is due to close next March. I have collected many signatures from concerned constituents who will be impacted by this change, and I have urged Lloyds—and will continue to do so—to reconsider the decision. I recognise that a community banking hub is expected to begin visiting Street from early 2027, and I welcome that effort to maintain some local presence of banking services, but let us be clear: a fortnightly visit from a community banker is not a substitute for a staffed bank branch. Of course, banking hubs and community bankers do have an important role to play, but they must be integrated as part of the conversation around banking services, rather than being the Government’s answer to it.

In addition, the Coventry Building Society branch in Wincanton will close in nine days’ time, leaving the town without any face-to-face banking services. Coventry Building Society has informed its members that they will be able to deposit their cash at their nearest branch in Frome, but that is a 40-mile round trip, so the closure will undoubtedly affect both rural local residents and local businesses, who will now need to make alternative arrangements.