Community Bank Closures

Debate between Baroness Anderson of Stoke-on-Trent and Baroness Laing of Elderslie

Thursday 8th February 2018 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

You certainly do.

[Ruth Smeeth]

Thank you very much, Madam Deputy Speaker. For many young women on a Friday night, the prospect of walking all the way out of town to a petrol station’s cashpoint may leave them vulnerable and afraid.

All that is merely a snapshot of the human impact that the decline in community bank branches is having on communities like mine. I am deeply concerned about what will happen to our towns should these branches disappear. I had hoped that the banks would share, or at least understand, that concern. Instead, when I met representatives from the Co-operative bank, which is no longer associated with the Co-operative Group, my concerns were dismissed and ignored. When I pointed out that the bank’s impact assessments were riddled with obvious inaccuracies, its representatives merely shrugged and said that it would make no difference to their decision. They treated me, and by extension my constituents, with contempt. They should be utterly ashamed of themselves.

The Co-operative is a bank that once distinguished itself by its commitment to ethical finance, so tell me, what is ethical about leaving a community without a lifeline and ignoring its objections? What is responsible about providing an incompetently researched impact assessment that cites nearby alternative branches that closed down a year ago? What is caring about hearing the concerns of 80-year-old men and women who have used a local branch their whole lives, and simply saying to those people, “The world has moved on—there’s an app for that now”? Let us be clear: a bank that treats people in that way cannot claim to be a “community” anything and should be embarrassed even to try.

As the statistics demonstrate, the problem is not limited to north Staffordshire. It is a national problem, certainly, but that does not mean that the hardship is evenly distributed—far from it. University of Nottingham research found that between 1995 and 2012, the areas that suffered the largest decline in branch numbers were

“characterised by unemployment rates and levels of renting from the public sector that are far above the national average”.

The researchers concluded that

“the least affluent third of the population has borne the brunt of two thirds of net closures.”

The people making those decisions might call it the reality of market forces, but I call it abandoning the people and communities that need those services the most. Whatever we choose to call it, the facts remain the same: the poorest and most vulnerable people in our country—especially those in rural or inner-city areas—are frequently discriminated against in the banks’ decision making process.

The social cost of excluding low-income consumers from mainstream financial services can be severe, and could even risk driving people into less legitimate but more visible and convenient methods of financing, including loan sharks, legal and otherwise. The costs of these closures go beyond the individual; they have long-term repercussions for the whole community. The Campaign for Community Banking Services has argued that bank closures contribute to the commercial decline of an area, as better-off consumers change their purchasing habits and begin to shop, bank and even socialise further afield. Worse still, closures are associated with a real decline in local bank lending. Growth in lending to small and medium-sized enterprises is dampened by an average of 63% in postcodes that lose a bank branch, and that figure grows to 104% for postcodes that lose the last bank in town. The impact on our high streets, on our local businesses, and on future regeneration can be devastating.

What does all that mean for towns such as Burslem, where local people are coming together to lift their community up and push back against years of decline? There was a time when the local bank was thought of as the heart of the community—perhaps it still is—so what happens to a community when it loses its heart? What happens when the monetary circulation of a town is cut off mid-beat? What happens when the last financial lifeline disappears and leaves the elderly and vulnerable without support? The world we live in is not the same as it was 10 years ago, let alone 40 or 50 years ago. Times change, technologies change, and we must change with them. But we must also do more to ensure that as the world moves, we do not leave behind those who find it hardest to keep up. We must recognise that there remains a place for community banking, local lending and face-to-face advice. That means we need the banks to take some ownership and responsibility for their loyal customer base. They need to be imaginative and consider sector and community-wide solutions, not pass the buck and blame their customers. If they will not do it voluntarily, we will have to force them to.

The banking sector has options. Banks could launch community banks that share counter facilities, like they do in parts of Spain. They could invest in multi-functional ATMs so that customers can pay in money directly, in their local communities. They could fund more extensively community-based financial education to assist people with online banking. They could even fund access to broadband in some of the harder to reach communities, so that their customers could access online banking. Yet all we have had from the sector is silence. We need to ensure that our banks are working in everyone’s interests, not just their own.

Child Food Poverty

Debate between Baroness Anderson of Stoke-on-Trent and Baroness Laing of Elderslie

Friday 16th October 2015 Commons Chamber

[Ruth Smeeth]

Thank you very much for giving way, Minister. I am grateful for your time and your commitment to this issue, now and previously. One of my concerns is that you have not talked about what happens during the school holidays. The Kellogg’s report is obviously incredibly important, but this is about the impact of malnutrition during the school holidays on children’s attainment when they come back to school. I agree with you that, traditionally, employment would be—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I allowed the hon. Lady to get away with it three times, but on the fourth time I have to tell her that she should use the word “you” only to address the Chair. If she means the Minister, she should refer to “the Minister” or “the hon. Gentleman”.

[Ruth Smeeth]

I apologise. I am still claiming new status.

Will the Minister please give us some clarification on what action we can now take to draw a line in the sand and work together to tackle the specific issue of holiday hunger?