More must be done to stop banks disappearing from our high streets, Esther McVey has warned
She said the loss of banking facilities added pressure on local businesses, making it harder for them to trade, grow and thrive.
Ms McVey said: “For many high street businesses, access to a local bank is not a luxury, but a necessity. They are paramount to their day-to-day operations – whether to deposit cash or receive direct assistance.
“I regularly hear from businesses in Tatton that simply can’t deposit cash or access the basic services needed. Some are even being pushed into going cashless – not out of preference, but because they feel they have no alternative.”
Over the past decade, nationally bank branch numbers have fallen by 64 per cent and ATMs by 65 per cent. But according to LINK, £80 billion was withdrawn from their network last year (the equivalent of £1.484 per adult), showing many people still rely on cash.
Speaking in a Parliamentary debate on the issue, Ms McVey also said not everyone wants to manage their banking online and for others, especially in rural areas, connectivity was an issue. In addition, digital banking came with concerns including technical failures, privacy and cyberattacks, as well as high card transaction fees for businesses.
Ms McVey said banking hubs are not a replacement for branches and that banks had failed customers. She wants part of the banking licence requirement to include maintaining a high street presence.
Ms McVey added: “Banks hold a captive market – and they are not living up to the standards of their agreements. Motivated by greed and profit, they are walking away from their responsibilities – and we must step in to ensure that banks are accountable, to ensure access of customers is maintained, and protect the right to an agreed service.
“We’re told the solution is banking hubs, but they offer limited services, restricted hours, and are only available in select locations – determined by being six miles or more from the next branch. And, troublingly, some hubs are now reporting they may no longer accept cheques – a basic and essential function. These hubs are an unregulated response to a long-term problem and, on their own, cannot undo the years of decline of the high street bank.”
The Federation of Small Businesses said four in ten still rely on cash as a primary payment method and six in ten needed to make regular cash deposits.
