High street banks are being urged by MPs to defend their decision-making when it comes to branch closures in rural areas as part of a new review.
Politicians from all major parties have called on the Government to reassess the way banking hubs are evaluated and established, expressing concern that rural communities face increasing disadvantage as bank branches continue to shut down nationwide.
These issues were brought forward during an Adjournment Debate held in the House of Commons on May 290.
Graham Leadbitter MP initiated the discussion, drawing attention to the extensive closure of banking facilities in rural regions and questioning whether current criteria for determining hub locations remain appropriate.
Bank branch closures have become an issue in recent years
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Members representing rural, coastal and urban areas throughout England, Scotland, Wales and Northern Ireland participated in the debate.
Mr Leadbitter revealed that banking provision in his constituency had collapsed dramatically, with branch numbers dropping from 22 in 2015 to merely six at present.
This represents a reduction of 77 per cent across a region serving nearly 100,000 people. The MP acknowledged that digital banking has transformed how many customers manage their finances.
However, he maintained that in-person banking services remain essential for certain groups within the population.
SNP Graham Leadbitter and SNP leader John Swinney
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Lloyds Banking Group consists of Lloyds Bank, Halifax, and Bank of Scotland | GETTY Vulnerable individuals, elderly residents and numerous businesses operating in rural areas continue to depend on face-to-face access to banking facilities, he argued.
Numerous MPs raised practical obstacles facing constituents, including lengthy journeys to reach banking services, inadequate public transport connections, and challenges for local enterprises dependent on cash handling.
Several MPs directed criticism at LINK, the body tasked with recommending banking hub locations, arguing its assessment framework fails to account for the genuine difficulties of rural existence.
Smaller towns that technically meet distance requirements often remain practically inaccessible due to geographical barriers, adverse weather conditions, and sparse transport options, Mr Leadbitter noted.
Bank branch closures are continuing at an 'alarming rate', according to Which? | GETTY He said: "There is also the vital question of community sustainability. The loss of banking services in rural communities makes it harder to attract people to live and work there."
Economic Secretary to the Treasury Rachel Blake responded by recognising the significance of banking access for communities throughout the country.
She referenced the Government's recently announced independent review examining banking service provision, with findings anticipated in October 2026.
The Minister stated it would be "premature to conclude that all people and communities are receiving support with their banking needs," despite ongoing progress with hub deployment.
Ms Blake confirmed that financial institutions are expected to establish suitable alternatives when closing branches, adding that the Financial Conduct Authority possesses authority to delay closures where concerns emerge.
The banking sector has pledged to deliver 350 hubs by the end of this Parliament, though MPs contended substantially more would be required.