Face-to-Face Banking: Rural Areas
The hon. Member is absolutely right. We have two banking hubs in my constituency, opened before the rules were tightened. People have said to me that even those banking hubs do not provide all the services they need. In a 21st-century banking offer for rural Britain, banking hubs are the obvious solution—rather than a branch of every bank—but they must be competent and capable of offering all the services that people need. Five years ago, the rules for receiving a banking hub were much broader, and Dartmouth got one just in time. The current criteria for banking hubs are far too narrow. In September 2024, the Financial Conduct Authority substantially tightened the rules, placing the focus solely on access to cash. The current criteria completely discount all other reasons why someone might need to use a bank. They also do not take account of poor public transport and an older than average population. They ignore the fact that banks do so much more than just give out cash. I urge the Government to expand the rules for granting a banking hub. I have met with the Economic Secretary to the Treasury, who shares my view that the current criteria are far too narrow. I heard the former Prime Minister tell the Chamber that a banking hub can be rolled out wherever a community needs one, but the policy that Link adheres to does not reflect that, so it must be changed. If necessary, we need legislation to make the banks listen. There simply must be a better minimum service coverage of banking hubs across the UK. So many MPs are campaigning for them that it is clearly a country-wide problem. We know that the banks can afford it, so for once, this is not a question of finding the money or funding. They can afford it. The Financial Services and Markets Act 2023, passed by the Conservative Government, gave the Financial Conduct Authority powers to protect cash access but, astonishingly, did not extend those powers to protecting wider banking services but limited them to cash. Back then, Labour tabled amendments to the Bill to extend the power to protect banking services, but they were not taken up by the Conservative Government. Now in government, Labour has been very slow to do what it pushed for in opposition. I urge the Government to rediscover their passion for protecting banking services by amending the Financial Services and Markets Bill that is currently making its way through the other place. We must ensure that face-to-face banking services receive the same protections as access to cash, whether that be via banking hubs, as should be the case in Totnes, or via other means, such as increasing the provision in post offices. As the Post Office is in trouble these days, with many branches closing, surely there must be an all-encompassing solution to make these places viable. Liberal Democrat peers in the House of Lords have tabled an amendment to the Financial Services and Markets Bill, and I wholeheartedly support it. It would require the Treasury to consider whether assessments following bank closures should extend beyond access to cash to evaluate local community needs for essential in-person banking services when making regulations. The answer is, “Yes. Absolutely, it should,” because banking is about more than just getting cash out of a hole in the wall. I hope that the Government will adopt the amendment. I look forward to hearing the outcome of the Government’s access to banking services review, which is due to be published shortly. I am sure that it will lay bare the evidence of the real-world impact of bank branch closures and demonstrate that the Government must go further in ensuring that people can access banking services. Having a bank account and being able to access a range of banking services are a necessity in modern society, not a luxury. The Government must rebalance things in favour of our high streets and communities and put an end to the favourable treatment for big banks, which repeatedly cut their services with no regard for the impact on the lives of their customers. Enough now—it is time that the Government took action to protect and restore face-to-face banking services across rural areas.