Community Bank Closures

Lord Mackinlay of Richborough Excerpts

Thursday 8th February 2018 Commons Chamber

[Craig Mackinlay (South Thanet) (Con)]

We have had a debate of extreme unity, between parties, between regions and between countries. It is fair to say that every MP in the House is concerned about the rapid closure of the banking network. I particularly wish to salute the hon. Member for Stoke-on-Trent North (Ruth Smeeth).

It feels like we are seeing a rapid change in high street banking, at a rate that I have never seen before. The reason for that is probably to do with us—the consumer. We have gone down the route that the banks have encouraged: taking the contactless route and using mobile and internet banking. We no longer use cheques for our transactions, because, first, we cannot find our cheque book, and secondly, we have to find an envelope and a stamp.

We have all fallen, probably rightly, for the seduction of the ease and speed of online banking. As my hon. Friend the Member for Chichester (Gillian Keegan) said very clearly, the volume of cash transactions in society is now below 50%. Even though we have the advance of the cashless society—I am sure that is warmly welcomed by the Treasury, because it means that most transactions can be appropriately taxed—it will be a very long while, probably a number of decades yet, before cash is completely out of the system.

There are a number of cash businesses; every constituency has them. My fear is that, when banking facilities move further and further away from those businesses, the amount of cash that is held in their premises and the homes of their owners, and perhaps in their safes, will become bigger and bigger, and with that will come security risks. There are security risks for the staff who are responsible for taking that cash to a bank that is increasing in size and further away.

[Ruth Smeeth]

One issue that has been raised with me by my constituents is to do with community groups that fundraise and hold big one-day festivals. They generate cash on that day, but, unlike businesses, which may be able to mitigate some of the problems, they may have volunteers who never have done anything like it before. That is a huge issue. Unfortunately, the post office will take cash deposits of only £2,000, which makes it even harder for them.

[Craig Mackinlay]

The hon. Lady makes the perfect point. My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) said very clearly that, when charities hold grand county fairs, there may be temporary traders who do not have contactless facilities and will not at any time that I can foresee, which makes it a very cash-based business. There are also clubs and societies that rely on cash and cheques for the small transactions among themselves.

I recall, not that long ago—I do not want to single out NatWest for any particular criticism—an advert that said, “We are open all the time. We are keeping our branches.” It was criticising its competitors, saying, “Ah, look, our competitor banks have made your bank into a new trendy wine bar.” I am afraid that we are seeing far too many of those across the country. I recall very clearly that my first bank account was at Lloyds 33 years ago. That branch, which had been there for 50 years or more, is now a quite nice Cypriot restaurant. That highlights the point that the network is disappearing in my constituency in particular. Broadstairs has lost NatWest and Lloyds in this last year alone.

The hon. Member for Clwyd South (Susan Elan Jones) mentioned her petitions. I also generated a petition, and the regional director for NatWest very kindly came to my offices and I delivered it to him. I received the warm words, “We’re consulting.” But of course, the outcome was probably determined some time before the petition was even thought about. Sandwich, one of the best preserved medieval towns in the country, has lost HSBC, Lloyds and NatWest in the last 18 months alone. Broadstairs and Sandwich are both now left only with Nationwide, which I salute for staying true to its roots in service to the community and maintaining its branch network.

We have seen the banks retreat from the smaller communities into the major conurbations and shopping centres. I do not know the experience of other hon. Members, but whenever I pay in a cheque—my heart sinks when I receive a cheque in the post, because it means I have to wander somewhere to do something with it—the queues seem as long as they ever were.

Much has been said about the post office network, which is fantastic, but it is not always available and the queues are horrendous. The post office has closed in the small village of Ash in South Thanet—I say village, but it is getting towards town size, with a population of 3,500. We hope that the post office will be resurrected in a new branch or shop, but there is currently absolutely nothing available for the people of Ash, who are five miles from Sandwich, 16 miles from Canterbury and eight miles from Ramsgate.

Why do we not all use mobile apps and the internet? Well, that is all very well, but I do not want the elderly to be forced into accepting that type of banking, and people who have difficulties but are managing independent living need help with those kinds of facilities. My father is in his 80s, and is fit and well, but I do not want him to use mobile banking under any circumstances, because it is not uncommon for him to say to me, “Oh, I’ve had an email from Santander and I don’t even bank with Santander.” That is exactly the point. Many of us here, particularly those who are younger than me, are very internet-savvy and would recognise a scam banking email, but many of the elderly would not recognise it and might respond, giving up their internet banking details.

There are clarion calls across the House, mainly—dare I say?—from the Opposition, that it is up to the Government to do something. We often hear Members saying that the Government should do this or the Government should do that. In fact, we see it on the Order Paper on an almost daily basis. I do not think that this is a matter for the Government, although they can help to inform the debate. This afternoon, Members from all parties are saying loudly and clearly to the banks, “Stop what you’re doing and start thinking again about the communities you serve.”

Much has been said about the opportunity for joint banking facilities. That would be a very sensible route to take. I appreciate that a premises costs a lot of money, as it has to be heated and there are business rates, staff and security to pay. But surely three, four or five of the major banks could come together in some kind of grand banking hall, sharing facilities so that counter service is available. The call today is, “Banks, please do something.” They could also extend the availability of their mobile, caravan-type, irregular banking facilities that can go to smaller communities; I cannot see why that option should not be available.

We are all responsible for this situation. I am still a bit of a cash person. I even go into the bank and sign a cheque for cash. It was not many years ago that the cashier said, “Why don’t you use the cash point?” Of course, I do use cash points, but if I am passing the bank I often cash a cheque. I said, “Don’t put yourself out of a job. If more and more of us do that, you’re sounding the death knell of this branch.”

We see these changes here in the cafés in this House. I am always quite amazed that some of the younger people who work here will use a contactless card for their sandwich and a cup of coffee costing £1.90. I am not like that, but I can see that my own level of card use is increasing as the years go by. At the moment, I will use a card over the level of £20, but I am increasingly tempted to go for the contactless card under that £20 limit.

I recommend that Members encourage our constituents to get into the banks that still exist and use their counter facilities, because then the banks will not be able to say, “We’re closing because we’re not getting used enough.” The cross-party clarion call from this Chamber today has to be: “Banks, please stop. Let’s think again. Let’s work together. We want more joint facilities and more mobile caravan-type banking facilities going to our communities.” We can all do our bit by getting into the banks and using them.