Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will take steps to provide incentives to high street (a) banks and (b) building societies to provide bank hub services.

Banking Hubs are a voluntary initiative provided by the financial services sector. Upon the closure of a core cash access service, such as a bank branch, or a direct request from a community, LINK assesses the community’s access to cash needs. If additional cash services are needed, industry will provide a shared solution such as a Banking Hub. Hubs offer basic counter services provided by Post Office staff, allowing people and businesses to withdraw and deposit cash, deposit cheques, pay bills and make balance enquiries. They also contain dedicated rooms where customers can see community bankers from their own bank.

UK Finance have recently confirmed 225 Banking Hubs will be announced by the end of 2024, up from the 130 locations currently confirmed. Furthermore, following the Government’s recent discussions with the UK high street banks, participating firms have also committed to improving Hubs by standardising the services available between firms, ensuring that customers will not require their own digital device to bank, trialling a ‘customer liaison service’ and trialling Saturday openings.

The Government legislated as part of the Financial Services and Markets Act 2023 to establish the FCA as the lead regulator for access to cash, giving it responsibility to seek to ensure reasonable provision of cash withdrawal and deposit facilities. The FCA recently held a consultation on its proposed regulatory regime for access to cash, following the Government’s legislation: FCA consultation on access to cash. These proposals build on and strengthen the arrangement that has been established by the financial services sector by placing it on a regulatory footing. The FCA expects to publish its final rules by the end of the third quarter of this year.