Banking Services

08 Apr

Question

Banking Services

The Question session focused on the accessibility and protection of in-person banking services in rural and under-served communities, particularly through the establishment of banking hubs. With increasing bank branch closures, MPs expressed concern over the inadequacy of current solutions to maintain face-to-face banking, especially in rural areas. Agriculture, local businesses, and individuals rely heavily on these services.

Emma Reynolds highlighted the government's efforts to open 350 banking hubs, with 135 already operational. However, the session revealed challenges in the criteria set by Link, the independent organization managing these hubs, and scrutinized the rigidity of these criteria that potentially prevent the establishment of more hubs where needed.

350

banking hubs to be rolled out across the UK

Key themes addressed:

The effectiveness of current policies in mitigating bank closures.
MPs' requests for government intervention in relaxing Link's criteria.
The need for continued dialogue and specific meetings between MPs and the Minister.

135

banking hubs currently operational

The exchange reflected MPs' frustrations but also the limitations faced by the government due to the independent nature of Link.

Outcome

The main outcome of the session was a strong message directed at the government to reconsider the criteria adopted by Link for setting up banking hubs, though no immediate policy changes were indicated. Emma Reynolds committed to meeting individual MPs to discuss specific concerns, indicating potential incremental progress on a case-by-case basis.

Key Contributions

Sir Julian SmithMember of Parliament

Conservative

Called attention to the struggles of rural communities, like Settle in North Yorkshire, lacking face-to-face banking. Urged the government to encourage more flexibility in Link's criteria for these hubs.

Lewis CockingMember of Parliament

Conservative

Sought clarity and simplification in establishing banking hubs in areas devoid of banks, such as Cheshunt in Broxbourne. Requested a personal meeting with the Minister due to previous disruptions in scheduling.

Emma ReynoldsMinister

Unknown

Highlighted government collaboration with the industry to promote banking hubs, with over 350 planned. Emphasized constraints due to Link's autonomy under the Financial Services and Markets Act 2023. Reiterated willingness to meet MPs individually for specific discussions.

Clive EffordMember of Parliament

Labour

Criticized the restrictive Link criteria allowing banks to abandon communities. Noted Eltham's gradual bank withdrawal problem, complicated by an existing building society. Urged the Minister for a criteria review to accommodate customer banking needs better.

Original Transcript

Sir Julian Smith

Skipton and Ripon

Con

Question

UIN: 903672

15. What steps she is taking to ensure rural communities have access to banking hubs.

Lewis Cocking

Broxbourne

Con

Question

UIN: 903673

16. What steps she is taking to help protect in-person banking.

The Economic Secretary to the Treasury

Emma Reynolds

12:28

The Government understand the importance of in-person banking to communities and are working closely with the industry to roll out 350 banking hubs across the UK. More than 220 hubs have already been announced, of which more than 135 are already open.

Sir Julian Smith

12:28

Rural communities such as Settle in North Yorkshire are really struggling with the loss of face-to-face banking services. Link hubs are one route for them to replace the banks that are closing.

I urge Ministers to do what they can with Link—I accept that it is an independent organisation—to help it to relax the criteria for rural communities, allowing them more face-to-face banking services.

Emma Reynolds

I would be very happy to meet the right hon. Gentleman if he wanted to discuss a specific banking hub that is being considered. We work very closely with Link.

As he will know, his Government passed the Financial Services and Markets Act 2023, under which the Financial Conduct Authority, Link and the financial services sector ultimately have power over the criteria, which is not something we are planning to change.

Lewis Cocking

How does the Minister plan to make it easier to establish banking hubs in communities that have lost all of their banks? I did have a meeting set up with the previous Minister, but she left Government before that meeting could take place.

Will this Minister agree to meet me so that I can discuss the establishment of a banking hub in the town of Cheshunt in my Broxbourne constituency?

Emma Reynolds

I am always happy to meet colleagues and will be happy to meet the hon. Gentleman.

Clive Efford

Eltham and Chislehurst

Lab

The criteria applied by Link are too strict, and banks are being able to walk away from their customers. In Eltham, we have had a salami-slicing process of banks gradually leaving the high street, but, because we have a building society, we cannot ask for a hub.

Will the Minister undertake to review Link’s approach, because it is making it difficult for customers to carry out their banking business?

Emma Reynolds

As I said in my previous answer, we do not have any plans to change the Link criteria; those are a matter for Link.

However, there are some flexibilities in the way that it applies the criteria, depending on the local population, travel times to nearby bank branches and, indeed, the number of small businesses in an area. I would be happy to meet my hon. Friend if that is of concern to him.

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