Chamber and committees

I pay tribute to Craig Hoy for securing this debate on high street banks in Scotland, the rate of closures and some of the issues that arise. Clearly, the concerns that he outlined are very familiar to many members around the country—particularly to those of us in more rural constituencies, such as myself, as the representative of Moray.

I remember a report from a few years ago that said that Moray was the hardest-hit constituency when it came to bank closures. Although we now have a banking hub in Forres and a cash hub in Lossiemouth, we have only one high street bank left outside of Elgin, which is in Keith. I therefore associate myself with Craig Hoy’s tribute to Virgin Money, whose bank branch that is.

Within the past couple of weeks, I have met Alison Moffat, Adam Featch and their great team there. I learned about Virgin Money’s banking promise, which has been outlined, to keep the branch open until early 2028, and about all the various services that are delivered there, including supporting customers with dementia, issuing SIM cards to people who are unable to have connectivity, helping people who have experience of domestic abuse, and providing other services such as working with local schools on entrepreneurial, banking and financial skills. The work that is being carrying out is tremendous. As others have said, it is a good example for other high street banks to follow.

I certainly share the concerns that have been expressed by many members. Jamie Hepburn outlined some of the stark statistics about the rate of bank closures in Scotland in recent years. Although the regulation of financial services is a reserved matter, the Scottish Government has been proactive in our engagements with the sector and with the regulator to advocate for Scotland’s interests. The issue has been debated and raised in the chamber many times.

The Government welcomes the FCA’s new regulatory powers on access to cash, which came into force in 2024. Ahead of the implementation of those rules, the Scottish Government provided feedback during the consultation process, which helped to lead the FCA to amend its definitions of “urban” and “rural” in the Scottish context, in recognition of our unique geography and the challenges that are faced in particular by rural and island communities, as members have mentioned.

We have also taken some practical steps. At this time last year, I convened a cross-party round table on access to cash and banking services, which brought together the FCA, Link, Cash Access UK, the Post Office and members from across the parties and which helped us all to get a shared understanding of the new rules that were coming in at that time. Under the new FCA rules, anyone who is concerned about access to cash in their area can make a cash access request to Link. There is also a right to appeal following an assessment decision. Of course, there are important safeguards, and I encourage individuals and community representatives to exercise their rights. It is great to hear about examples from around the country of people using that process. I will come back to concerns over the rejections of some requests.

The expansion of banking hubs across Scotland has been positively received by the communities that have benefited. We have a total of 16 hubs already, and another 13 are in progress. They bring together multiple banks under one roof and provide communities with access to essential banking facilities, allowing customers to carry out everyday transactions and speak to representatives from their own banks on dedicated days.

I remember a statistic from back in 2022 that only 14 per cent of transactions nowadays involve cash. The world is changing. However, as members have said, we need safeguards. Many members have eloquently outlined the concerns of vulnerable communities—in particular, elderly people—as well as certain parts of the economy such as small businesses in more rural communities in particular. High street banking still has a role to play, and some of the safeguards that we have talked about are crucial.

A range of concerns were expressed by the Scottish Government at that meeting, such as the methodology used by Link to assess a community and decisions about the banking hubs. The frequency, duration and distance of public transport was indeed raised, as was the availability of transport in communities. The member should rest assured that that was raised at that meeting.

The FCA is now having a post-implementation review of a lot of the issues that we are discussing. [Interruption.] For clarity, that is not me on the screen.

I assure the Parliament that, in that post-implementation review and following the forum, the Scottish Government will continue to make the strongest representations to the authorities to ensure that our concerns are taken into account.

Many measures on digital inclusion are under way. We launched two new funds to support digital inclusion work just this month, to the tune of more than £1.4 million, which is now available. The connecting Scotland digital inclusion fund and a CivTech challenge have combined UK Government and Scottish Government funding to support digital inclusion projects. The whole issue of digital inclusion is not divorced from the issue of the loss of high street banks. It is important that we take measures to ensure that people are not left behind and can access banking services through digital means if they are unable to access them through a high street bank.

I assure the Parliament that I recognise this very topical issue, and I urge all members to pay attention to the post-implementation review that is being carried out by the FCA, so that we can ensure that Scotland’s voice is heard.

We could have a separate debate about the future of high streets in Scotland. The small business bonus scheme, which has been in place for a number of years now, has been incredibly valuable to small businesses on our high streets. On many of our more rural high streets and those in smaller villages and communities, there are virtually no local businesses that pay rates. That is a very valuable instrument, it has been in place for many years now, and it plays a big role.

There have been a number of other activities in relation to the on-going concerns over the criteria for securing a banking hub. Many members have mentioned cases where that has been refused in the past. This month, representatives of the Scottish Government attended an FCA-convened forum on access to cash, at which we were able to raise Scotland-specific concerns about how our communities are being directly impacted. Those concerns were raised at the forum with the FCA, Link and Cash Access UK. We articulated a number of issues and gave some case studies based on insights that had been gained from lots of sources, including Citizens Advice Scotland, which highlighted Scotland’s particular rural geography, topography and demographics as compared with the rest of the UK. It has always been our objective to have specific Scottish concerns taken into account.

The short answer to that is, of course, yes. The member referred to the fact that the Minister for Public Finance has already written to the other parties on the subject. We will keep that communication going.

In the meantime, as I said in my previous answer, anyone who is affected by the issue that the member raises should speak directly to the City of Edinburgh Council. However, the backdrop is that many discussions continue to take place between the Scottish Government, COSLA and the relevant sectors.

Mr Russell highlights an important issue for the future of Scotland's technology sector and the future of our society. In my opening remarks, I outlined a number of investments that are taking place to reverse the situation. I will also take this opportunity to commend Skyscanner. Members may have seen the recent news that a number of Skyscanner staff are undertaking teaching qualifications. For part of their week, they work for Skyscanner and for the other part of the week, they are in classrooms, inspiring the next generation of software engineers. That is a first-class, inspirational initiative that has been taken by Skyscanner, and it shows that employers have a role to play as well.

Scotland’s technology sector has more than doubled in size over a 10-year period, so it is going in the right direction. Many of the businesses in the technology sector tell me that they are in Scotland because of the talent pipeline, so they are able to find the talent. However, the member is quite right that the measures that I outlined in my initial answer are extremely important for ensuring that we have more computing science teachers in Scotland’s schools.

Tourism is one of Scotland’s key growth sectors, and the Scottish Government is committed to working with the tourism sector to create a resilient, sustainable, accessible and inclusive tourism economy for the future. It is a measure of the sector’s importance that I am in regular contact with the sector, as are many of my ministerial and Cabinet colleagues. There is a Cabinet sub-committee on investment and economic growth, and as part of our on-going bilateral engagement on policy development work, including on taxation and regulation, we look at all those issues and their impact on tourism and hospitality.

Of course, many local authorities are considering raising the levy to inject investment back into the local visitor economy and thereby bring benefits. That is why 21 out of 27 European countries have some kind of occupancy tax in their jurisdictions.

The concerns in Edinburgh should be communicated directly to the local council by those who are affected. However, we continue to engage constructively with the sector at all times. My colleague Ivan McKee is involved in leading those discussions with the Convention of Scottish Local Authorities and industry representatives. In the same way that we have done in the past, we will continue to listen to them in the future.

That investment is therefore important to ensure that the network is robust, as well as in helping us to move to net zero and ensure that we can deploy Scotland’s massive renewable energy potential—-

The member must not get away with rewriting history here.

What happened at the time was that there was a consultation on the levy. The people who responded to the consultation were listened to and the legislation was brought forward. However, now, in 2025, further flexibilities are being asked for and, once again, the Government is listening to those affected. That sounds to me like a good way forward, and it counters the member’s suggestion that we completely ignored the sectors on the issue in the past, which is not the case. It was consulted on at the time. However, it is now 2025 and we are looking for further flexibilities, as requested by the sectors.

That gets to the heart of the debate about a tourism levy. Given that we all want to have a sustainable tourism sector, we must ensure that the infrastructure and other issues that are affected by tourism are addressed. Many Governments throughout Europe have put in place some kind of tax or levy to address such issues.

As the minister who is responsible for tourism, I regularly speak to people in the sector, many of whom support the levy. Of course, they have questions about its implementation, and they want any new flexibilities to address that. I have no doubt that those debates will continue, but many people are supportive of the visitor levy, because they recognise that the fact that Scotland is a very popular tourism economy brings pressures and that we need investment to address some of those pressures.