Britain's largest banks have come under fire from MPs over the 'decimation' of rural banking services, which is leaving communities in areas such as Devon without adequate provision. The criticism follows a Westminster Hall debate led by South Devon Liberal Democrat MP Caroline Voaden, who accused banking giants of 'turning their backs' on customers while posting record profits.
Bank profits under scrutiny
During the debate, Ms Voaden highlighted that Lloyds posted £6.7bn in profit last year, a sum she described as 'incredible' given the bank's ample resources to sustain rural services. "Nobody needs to be making £6.7bn of profit a year," she said, adding that "while big banks make billions in profits they close branches with impunity. They are turning their backs on customers and leaving small businesses struggling."
Ms Voaden also noted that 64 per cent of all bank and building society branches open in January 2015 have since closed. Across the 450 square miles of the South Devon constituency, just a single bank branch remains. "It is simply outrageous that banks have been able to get away with this," she said.
Impact on rural communities
Statistics reveal that 86 per cent of people in rural areas have seen their nearest bank branch close, with no alternative bank to switch to. Travelling to a bank via public transport can take up to half a day, according to Ms Voaden, who described the situation as "a perfect storm of decimated public transport, appalling digital connectivity and closure of banking services. Those three make a toxic combination."
Exmouth and Exeter East Conservative MP David Reed contributed to the debate, noting that every major bank had departed Budleigh Salterton, leaving the town and its summer visitors with no means of accessing cash beyond a machine at Tesco.
MPs call for government action
Ms Voaden called for the criteria for opening town banking 'hubs' to be broadened, stating: "Having a bank account and being able to access a range of banking services are a necessity in modern society, not a luxury. The government must rebalance things in favour of our high streets and communities and put an end to the favourable treatment for big banks. Enough now – it is time that the government took action to protect and restore face-to-face banking services across rural areas."
Tiverton and Minehead's Liberal Democrat MP Rachel Gilmour said her constituency spans 1,250 square miles and has a predominantly elderly population. Should a constituent need to visit a bank in Taunton, the round trip by bus takes five hours.
Richard Foord, the Liberal Democrat MP for Honiton and Sidmouth, described the loss of local branches as 'an appalling bank heist', adding: "It is not a vault being raided, and it is not cash being snatched. It is the very banking services that support our most vulnerable being taken away." Lloyds closed 218 branches across the country last year, including in Seaton, and will close 95 more in the next year, including in Honiton, while reporting £6.7bn of pre-tax profits. "That is an outrage, and the government needs to do more to ensure that the most vulnerable in our society get the services they need in rural regions," Mr Foord said.
