The petition of residents of Glasgow Central,
Declares that the proposed closure of the Pollokshields Branch of Scotland in Glasgow will have a detrimental effect on local communities and the local economy; notes that this closure would negatively affect the large elderly population in the area, alongside those from ethnic minority backgrounds who prefer to transact in cash and deal with people they know; further notes that Albert Drive has been hit by two serious fires in recent years, and the Bank was an anchor holding footfall to the rest of the street.
The petitioners therefore request that the House of Commons urge the Government and the Bank of Scotland to take into account the concerns of petitioners and take whatever steps they can to halt the planned closure of this branch.
And the petitioners remain, etc.—[Presented by Alison Thewliss, Official Report, 20 June 2023; Vol. 734, c. 767.]
[P002839]
Observations from the Economic Secretary to the Treasury (Andrew Griffith):
I thank the hon. Member for Glasgow Central (Alison Thewliss) for submitting the petition on behalf of her constituents regarding the closure of the Bank of Scotland’s Pollokshields branch.
I am sorry to hear of your constituents’ disappointment at the planned closure of the branch. The facts reveal that the way consumers interact with their banking is changing. In 2021, 86% of UK consumers used a form of remote banking, such as an app, online or on the phone, up from 68% in 2017. Indeed, according to the Bank of Scotland, 83% of the customers of the Glasgow Pollokshields branch also used other Bank of Scotland branches, internet banking or telephone banking.
As with other banking service providers, Bank of Scotland will need to balance customer interests, market competition, and other commercial factors when considering its branch strategy. Although the Government understand the dissatisfaction felt by the hon. Member’s constituents, decisions on opening and closing branches are taken by the management team of each bank on a commercial basis.
I hope that you can appreciate that it would therefore be inappropriate for the Government to intervene in these decisions. The Government cannot reverse the changes in the market and in customer behaviour; nor can they determine firms’ commercial strategies in response to those changes. Having the flexibility to respond to changes in the market is what makes the UK’s financial services sector one of the most competitive and productive in the world, and the Government want to protect that.
Having a dynamic and competitive financial services sector drives innovation and incentivises banks and building societies to keep developing their banking products and services, creating better outcomes for customers.
Nonetheless, the Government firmly believe that the impact of branch closures should be understood, considered, and mitigated where possible so that all customers, wherever they live, continue to have appropriate access to banking services.
As the hon. Member may know, guidance from the Financial Conduct Authority (FCA) sets out its expectation of firms when they are deciding to reduce their physical branches or the number of free-to-use ATMs. Firms are expected to carefully consider the impact of a planned closure on their customers’ everyday banking and cash access needs and consider possible alternative access arrangements. This is to ensure that the implementation of closure decisions is done in a way that treats customers fairly. The guidance has recently been strengthened to enhance protections for consumers that rely on branch services. The FCA is closely monitoring banks and building societies in this regard and if a firm falls short in its provision of reasonable alternatives, the FCA can and will ask for closures to be paused or for other options to be put in place.
In the customer information pack that Bank of Scotland has published for the Pollokshields’ branch closure, customers are pointed to the free-to-use ATMs at the nearby Day Today, 0.1 miles away; Friends Convenience Store, 0.38 miles away; and Sainsbury’s, 0.42 miles away. They are also pointed to alternative Bank of Scotland branches on Victoria Road, 0.83 miles away, and Shawlands, 1.3 miles away. These branches are both accessible from the closing bank branch via public transport.
Alternative options to access everyday banking services can be via telephone banking, through digital means such as mobile or online banking and via the Post Office. The Post Office Banking Framework allows 99% of personal banking and 95% of business customers to deposit cheques, check their balance and withdraw and deposit cash at 11,500 Post Office branches across the UK. The nearest Post Office branch to the Glasgow Pollokshields Bank of Scotland branch is in Crosshill, 1 mile away.
In recognition that cash continues to be used by millions of people across the UK, the Government have legislated through the Financial Services and Markets Act 2023 to establish a new legislative framework to protect access to cash. The Act establishes the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provides it with responsibility and powers to seek to ensure reasonable provision of cash withdrawal and deposit facilities. As part of this responsibility, the FCA must also seek to ensure that there is reasonable provision of free withdrawal and deposit facilities in relation to personal current accounts from relevant providers.
In the context of the Government’s legislation, the financial services sector is working together to develop and provide shared cash access services. This includes a process for LINK—which operates the UK’s largest ATM network—to assess a community’s access to cash needs. These assessments take place in the event of the closure of a core cash service or a request to LINK directly from a local community. As part of the assessment process, LINK takes into account relevant information such as the size of the population, number of shops, demographic data and the nearest alternative services. In circumstances where LINK considers that a community requires additional cash services, participating firms
within the financial services sector will provide a suitable shared solution, such as an ATM, deposit service, or shared banking hub, for cash users in that community. While the Government understand that LINK has not recommended an alternative cash service as a result of Bank of Scotland’s plans to close its Pollokshields branch, petitioners may wish to contact LINK for
further information. Contact details can be found on LINK’S website:
www.link.co.uk/consumers/request-access-to-cash/
I hope that the hon. Member finds this response useful and that she will pass on my thanks to her constituents for bringing this to my attention.