On 5 June 2025, a debate I initiated was held in the House of Commons designed to bring to the government’s attention the continuing problems being caused to many people in the UK as a consequence of the major banks’ wholesale closure of local branch offices. This is a matter of great concern as the banks have been putting their already large profits above the needs of vulnerable sections of our communities and local businesses without effective regulation. It requires urgent government intervention.
The rate of branch closures is staggering. In 1986 there were 21,643 bank and building society branches, by 2024 there were 6800 left. In my county of Northumberland, we have lost half of our bank branches since 2015. The biggest town in the County, Blyth, has only one building society left, and Bedlington, the fourth largest has recently been left without any banks at all.
Of course many closures were inevitable through the onset of online banking which is convenient for very many doing routine banking, but the massive wave of bank branch closures throughout the UK has been allowed to occur without proper consideration for the individuals and businesses who require personal access to banks.
As is so often the case, the elderly, the disabled and the poor, who either cannot cope with computers or who cannot afford expensive broadband, are the ones who have been hit the hardest. Disadvantaged families often rely on now hard to access cash for budgeting and in a recent Which? magazine survey 52% of disabled people reported being negatively affected by the closures.
The closures have further eroded local economies with fewer visits to the high street being made and local businesses having additional costs linked to such everyday practicalities as making cash deposits. This combined with out of town shopping has left our High Streets hallowed out and in tatters. Forcing the Banks to return banking services in some form to our towns could help reverse this decline.
The major banks are creating these hardships to increase their already large profits. In 2024, the four biggest banks, HSBC, Lloyds, Barclays and NatWest made combined profits of £44.7 billion. Analysts consider the closure programme is designed to increase their profitability through a 6% decrease in overhead spending.
Since 2013, the Financial Services Authority (FCA) has been tasked with regulating banking services including overseeing branch closures. Under the Financial Services and Market Act 2023, the FCA can require banks announcing closures to consult interested parties, to consider the effects and to consider alternative provision. It is required to ask the cash machine operator Link to assess the consequences of closures and to recommend where alternatives should be created if they do not already exist. The problem is that Link’s surveys are limited by statute to the access of cash, not the wide range of banking services people and businesses need. In reality, under its current regulations, the FCA can only oversee the process of bank branch closures, in effect it is only allowed to manage the decline in banking services.
It is essential that the government amends the 2023 Act to ensure that the FCA must instruct Link to survey the need for access to all banking services, not simply access to cash. People should not have to travel very long distances to make face to face applications for loans, to discuss various often complex savings options or to deal with delicate probate matters. In opposition during consideration of the 2023 Act Labour tabled motions to this effect. It is essential that in government it now makes those amendments to the legislation.
One much-heralded solution to the banking deserts the banks are creating are Banking Hubs, facilities shared by the banks and run by the not for profit Cash Access UK, which is financed by the Banks. I am all in favour of this programme, but my recent experience in trying to establish one in Bedlington shows this is not always easily accomplished.
Another matter of concern is that the government target is only for there to be 350 Banking Hubs opened by the end of the parliament. There are 650 constituencies in the UK, so many of which obviously will have to do without. I hope that the Labour government listened carefully to the debate last week and forces the banks to create many more Banking Hubs.
I am calling on the government to take an urgent fresh look at this issue and to bring forward the necessary legislation to make the banking industry fulfil its social responsibilities to the communities from which they have extracted so much profit over the years. The same banks who we had to bail out in the 2008-2009 Financial Crisis because of their own reckless pursuit of ever-increasing profits, who made fortunes through the Bank of England’s Quantitative Easing programme initiated to save the economy after the Crash they caused, are abandoning the ordinary working class people whose taxes saved them.
The banks have taken the people of the UK for granted and it is now time for them to be made to provide access to personal banking services to everyone. They must be forced to think about more than just their own massive profits and dividends.
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