Bank closures in Paisley and Renfrewshire North
The petition of residents of the constituency of Paisley and Renfrewshire North,
Declares that the closure of two Bank of Scotland branches in Paisley and Renfrewshire North constituency will have a detrimental impact on the local community; notes that the decision will leave 70,000 constituents with access to just two bank branches; further notes that the removal of high street branches exacerbates the inequality of certain groups, such as those in lower incomes, people with disabilities, rural communities, senior citizens and small business owners; and further declares that all banking groups have a duty to communities to provide in person services thus alleviating barriers to access.
The petitioners therefore request that the House of Commons urge the Government to consider the concerns of the petitioners and take immediate action to ensure that residents in Renfrew and Bridge of Weir have access to a local banking provision.
And the petitioners remain, etc.—[Presented by Gavin Newlands, Official Report, 25 March 2024; Vol. 747, c. 1362.]
[P002944]
Observations from the Economic Secretary to the Treasury (Bim Afolami):
I thank the hon. Member for Paisley and Renfrewshire North (Gavin Newlands MP) for submitting the petition on behalf of his constituents regarding the closure of two Bank of Scotland branches in his constituency.
I am sorry to hear of his constituents’ disappointment at the planned closure of these branches. The Government believe that all customers, wherever they live, should have appropriate access to banking and cash services, and I would like to assure you that I am monitoring this issue closely. Banks and building societies occupy a privileged position in society and are essential to enabling people to manage their money on a day-to-day basis.
The Government legislated through the Financial Services and Markets Act 2023 to introduce a new legislative framework to protect access to cash for individuals and businesses. This establishes the Financial Conduct Authority as the lead regulator for access to cash and provides it with the responsibility and powers to seek to ensure
reasonable provision of cash withdrawal and deposit facilities. As part of this responsibility, the FCA must seek to ensure that there is reasonable provision of free withdrawal and deposit facilities in relation to personal current accounts. The FCA recently consulted on its proposed regulatory regime. The FCA consultation on access to cash can be found at
https://www.fca.org.uk/publications/consultation-papers/cp23-29-access-cash
For access to banking services more broadly, the Government acknowledge that decisions to open or close a branch are commercial decisions for banks. However, it is imperative that banks and building societies recognise the needs of all their customers, including those who still need to use in-person services. The impact of branch closures must be mitigated where possible so that all customers, wherever they live, continue to have appropriate access to banking services.
Guidance from the FCA sets out its expectation of firms when they are deciding to reduce their physical branches or the number of free-to-use ATMs. The FCA’s guidance is clear that firms are expected to carefully consider the impact of planned branch closures on their customers’ everyday banking and cash access needs, and put in place alternatives, where this is reasonable. This seeks to ensure that the implementation of closure decisions is done in a way that treats customers fairly. Where firms fall short of expectations, the FCA may ask for closures to be paused or other options to be put in place. The FCA’s handbook requires firms to identify particularly vulnerable customers, and to consider the needs of these customers appropriately. This includes older and disabled people.
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 or banking hubs. The Post Office allows personal and business customers to carry out everyday banking services at 11,500 post office branches across the UK. Meanwhile, banking hubs are a shared initiative which enable customers of participating banks to access cash and banking services in shared facilities. Over 100 banking hubs have been announced so far, and UK Finance recently confirmed that it estimates a total of 225 banking hub locations will be announced by the end of 2024. Over 40 hubs have already opened, and the Government hope to see all of these hubs open as soon as possible.
The Government also welcome the participating high street banks’ recent voluntary commitments to a range of improvements to the banking services provided in hubs. This includes all firms agreeing to provide a consistent range of banking services in hubs, and that customers will not need to bring their own smart device to carry out a service. Firms will also trial customer liaison services and Saturday openings, and have committed to keep services in banking hubs under review, ensuring that hubs continue to be fit for purpose for all customers.