Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps she plans to take to help support small businesses with cash banking, in the context of trends in the number of closures of physical banks.

Banking has changed significantly in recent years with many customers benefiting from the ease and convenience of remote banking. While branch closures are commercial decisions for banks, the Financial Conduct Authority (FCA) guidance expects firms to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs and put in place alternatives where reasonable. This seeks to ensure that branch closures are implemented in a way that treats customers fairly.

The Government understands the importance of face-to-face banking to communities and businesses, including in areas such as Slough and Berkshire, and is committed to championing sufficient access for all as a priority. This is why the Government is working closely with industry to roll out 350 banking hubs across the UK. The UK banking sector has committed to deliver these hubs by the end of this Parliament. Over 200 hubs have been announced so far, and over 100 are already open.

Alternative options to access everyday banking services can be via telephone banking, through digital means such as mobile or online banking and via the Post Office. The Post Office Banking Framework allows personal and business customers to withdraw and deposit cash, check their balance, pay bills and cash cheques at 11,500 Post Office branches across the UK.

While the ongoing trend in payments in the UK has been away from cash and towards card and digital payment methods, the Government recognises that cash continues to be used by millions of people across the UK, including those who may be in vulnerable groups. Furthermore, businesses need access to cash deposit services in order to keep accepting cash and, therefore, support people’s ability to continue to transact using cash.

The Financial Services and Markets Act 2023 granted the FCA the responsibility and powers to seek to ensure the reasonable provision of cash withdrawal and deposit facilities. In September 2024, The FCA introduced regulatory rules for access to cash. Its rules require the reasonable provision of free cash withdrawal and deposit facilities for personal current accounts. Data from LINK (the operator of the UK’s largest ATM network) identifies 106 ATMs in Slough, including 70 free-to-use ATMs.

Where a branch closure is announced or a community has submitted a cash access assessment request, LINK assesses a community’s access to cash withdrawal and deposit needs, and can recommend a new service if necessary.

Where a resident, community organisation or other interested party feels access to cash in their community is insufficient, they can submit a request for a cash access assessment. Further information about submitting a cash access request can be found on LINK’s website.