😟 Bank Closures: Rural Areas

• Debate on Rural Bank Closures: Simon Hoare, MP for North Dorset, initiated an Adjournment debate focusing on the impact of bank closures in rural areas, emphasizing the disproportionate effects on these communities.

• Rural Impact: Hoare argued that rural areas feel the impact of bank closures more severely due to their reliance on market towns as economic and social hubs, which are crucial for community cohesion and addressing rural isolation.

• Statistics on Closures: North Dorset has experienced a 74% fall in bank branches since 2015, with only five banks remaining across 440 square miles. The wider area of Dorset has seen a 68% decline overall.

• Challenges for Elderly and Vulnerable: The debate highlighted the difficulties faced by elderly and vulnerable groups, many of whom rely on in-person banking. Examples included constituents who lack access to digital services or mobility required to travel to distant branches.

• Role of Post Offices: Post offices have stepped in to offer some banking services in areas lacking banks, but they cannot fully replace the in-person banking services provided by banks.

• Banking Hubs: The concept of banking hubs was discussed as a potential solution to the closures. These hubs can offer a range of services from multiple banks. However, the criteria for establishing them, overseen by Link, were criticized for not adequately considering rural needs.

• Government and FCA Involvement: The Exchequer Secretary to the Treasury, James Murray, explained the Financial Conduct Authority’s role in assessing the need for banking hubs following branch closures. He assured commitment to opening 350 banking hubs by the end of the Parliament.

• Digital and Transport Infrastructure: The government highlighted investments in digital infrastructure (Project Gigabit) and public transport (Bus Services Bill) to improve access to banking services, both online and in-person, in rural areas.

• Call for Legislation: There was a suggestion that the Financial Services and Markets Act 2023 could be amended to allow the FCA to assess wider banking services, not just access to cash.

• Continued Advocacy: MPs from various constituencies expressed their concerns and intentions to keep pushing for banking solutions in their rural areas, underscoring the issue’s national relevance and the need for continued government action.

The parliamentary session on ‘Bank Closures: Rural Areas’ exhibits a moderate level of disagreement, warranting a rating of 2 out of 5. The session is characterized by a constructive dialogue with a shared concern across party lines, but there are underlying tensions and differing views on the solutions and responsibilities of various parties involved, particularly the banks and the government. Below is a detailed analysis of the session’s dynamics, including examples of disagreements:

1. Concern vs. Proposed Solutions:
   • There was a unanimous sense of concern regarding the impact of bank closures in rural areas. Members from various parties, including Conservative, DUP, Labour, and Liberal Democrats, expressed the need for better banking access. However, the solutions proposed or the urgency with which they were demanded varied. For example, Jim Shannon from DUP pressed for a legal obligation on banks, while Simon Hoare, though agreeing, focused on the government’s role in considering legislative amendments.
2. Evaluation of Banking Hubs:
   • While the idea of banking hubs was generally supported, there was disagreement on their effectiveness and sufficiency. Simon Hoare mentioned the urgency to ‘turbocharge’ the delivery of hubs, suggesting a dissatisfaction with the current pace (see example on banking hubs below). Conversely, the Minister commended the progress on hubs and outlined the government’s commitment to increasing their number. This reflects differing perspectives on the adequacy of current measures.
3. Role of the Government and Regulators:
   • There was a subtle disagreement on the government’s role and the effectiveness of regulatory frameworks. Simon Hoare pointed out gaps in the Financial Services and Markets Act 2023 and the need for broader FCA powers, implying a critique of current government actions. The Minister’s response highlighted ongoing government initiatives and investments, which contrasts with the criticisms.
4. Assessment of Criteria for Banking Hubs:
   • Several members, including Helen Morgan and Harriet Cross, expressed strong dissatisfaction with the criteria used for establishing banking hubs, arguing that it did not consider rural-specific challenges. This shows a disagreement with the approach of Link and implicitly the government’s oversight of these criteria.

Examples of Disagreements:

• Banking Hubs: Simon Hoare’s statement, “I think the Government could do even more to turbocharge it” about banking hubs, juxtaposed with the Minister’s emphasis on the progress, “My right hon. Friend the Chancellor marked the opening of the 100th banking hub in December, and more than 200 hubs have been announced,” illustrates a mismatch in expectations and perceived urgency.

• Criteria for Hub Establishment: Helen Morgan’s comment, “Will the Minister consider reassessing the criteria, so that banking hubs are placed where banks were previously located so that people can still access them?” directly challenges existing criteria, reflecting a disagreement on their appropriateness.

• Government Intervention vs. Industry Responsibility: The contention between members like Jim Shannon, who called for more direct government intervention through legislation, and the Minister’s focus on collaborative efforts with banks, as seen in the response to Jim Shannon’s question about criteria for hubs, suggests a disagreement on the locus of responsibility.

In summary, while there is a high degree of consensus on the issue itself and a shared commitment to addressing it, the session shows moderate disagreement on the specifics of solutions, the urgency of implementation, and the roles of various stakeholders, leading to a rating of 2 for disagreement.