The petition of residents of East Kilbride, Strathaven and Lesmahagow,
Declares that closure of the RBS branches in Lesmahagow and Strathaven, and indeed many other rural branches across Scotland, unfairly affects rural communities that will have to travel further to withdraw their own money or seek monetary advice from their own bank; further that RBS is 72%-owned by taxpayer and rural taxpayers have been unfairly targeted in the closures; further that it could be of serious detriment to our local rural economies; and further that the closure of these local branches will have the biggest negative impact on the most vulnerable people in our community such as the elderly and the disabled.
The petitioners therefore request that the House of Commons urges the Government, as a major shareholder in RBS, to undertake a full review into the decision by the bank to close a third of its branches in Scotland; further that the government acknowledges the targeted impact this will have on rural communities; and further that the Government will urge RBS to rethink its list of proposed branch closures.
And the petitioners remain, etc.—[Presented by Dr Lisa Cameron, Official Report, 20 December 2017; Vol. 633, c. 1242.]
[P002093]
Observations from the Economic Secretary to the Treasury (John Glen):
The Government thank Lisa Cameron MP for her petition on the closure of the RBS branches in Lesmahagow and Strathaven.
The Government are sorry to hear about the disappointment of the residents of East Kilbride, Strathaven and Lesmahagow at the closure of the RBS branches.
As with other banking service providers, RBS Group will need to balance customer interests, market competition, and other commercial factors when considering its strategy. Decisions on opening and closing branches and agencies are taken by the management team of each bank on a commercial basis. The Government’s stake in RBS is managed at arm’s length by UK Financial Investments (UKFI). UKFI is wholly owned by the Government and is responsible for managing the Government’s stake in the assets acquired during the financial crisis. UKFI is not responsible, however, for managing the assets themselves. RBS retains its own board, which is responsible for strategic and management decisions and decisions relating to branch closures are solely within the remit of the bank.
However, the Government do believe that banks should act in the best interests of their customers and are committed to increasing competition to deliver better financial products and services for all bank customers. The Government continue to engage actively with the banking industry and consumer groups on these issues on an ongoing basis.
In May 2017, the major high street banks signed up to the Access to Banking Standard, committing to work with customers and communities to minimise the impact of branch closures and put in place alternative banking services. The Standard commits banks to ensure customers are well informed about branch closures, the bank’s reasons for closure and options for continued access to banking services. These options should include specialist assistance for customers who need more help. The operation of the Standard is monitored and enforced by the independent Lending Standards Board, ensuring that banks are held accountable for the way they treat their customers when a branch closes.
In addition, in January 2017, the Post Office announced that it had reached an agreement with the banks that will allow more banking customers to access a wider range of services at the Post Office than ever before. The new arrangement allows individual and small business customers to withdraw money, deposit cash and cheques and check balances at more than 11,600 Post Office branches in the UK. While the range of services offered by the Post Office may be more limited than that offered in a traditional bank branch, the services provided through the Post Office’s extensive network ensures that essential banking facilities remain available in as many communities as possible. The Post Office estimates that 99% of personal and 95% of business customers will be able to carry out their day-to-day banking at a Post Office as a result of the new agreement.
Both initiatives have the Government’s full support, and banks are aware that the Government expect their involvement to be genuine and unqualified.
Should the residents of East Kilbride, Strathaven and Lesmahagow decide to switch banks, the Government have made it easier than ever before using the Current Account Switch Service (CASS). The switch service is free to use, comes with a guarantee to protect customers from financial loss if something goes wrong, and redirects any payments mistakenly sent to the old account, providing further assurance for customers. This means that customers are more able than ever to hold their banks to account by voting with their feet, and that banks are incentivised to work hard to retain their existing customers and attract new ones. More information about CASS is available at: www.currentaccountswitch.co.uk
The Government cannot reverse the changes in the market and in customer behaviour; nor can it determine firms’ commercial strategies in response to those changes.
However, the Government will continue to take positive action to maintain access to vital banking services and ensure that banks support communities across the UK when their local branches close.