Banks and Communities

Brendan O'Hara Excerpts

Thursday 11th January 2018 Westminster Hall

[Brendan O'Hara (Argyll and Bute) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing the debate.

The Royal Bank of Scotland’s decision to close 62 of its branches in Scotland—a decision that will leave 13 towns in rural Scotland without a single bank—is an absolute disgrace and will inflict further long-lasting reputational damage on RBS. That it announced that decision so callously, without even having the courtesy to hold consultations with the communities involved, is absolutely unforgivable. One would have thought that RBS, having been bailed out by the public purse to the tune of £45 billion, would display a degree of humility. Its decision to turn its back on so many communities, particularly those where the RBS branch is the last in town, is a scandalous abdication of its social responsibility to rural Scotland and to the people who were forced to keep it afloat when it risked sinking without trace during the financial crisis.

RBS plans to close three branches in my constituency: those in Campbeltown, Rothesay and Inveraray. Those ruthless closures will not only hurt local businesses and individuals; they will be hugely damaging to Argyll and Bute. We have worked hard to tell people that we are open for business. We have actively promoted Argyll and Bute as a great place to live, work, raise a family and do business. These closures undermine all that hard work.

It does not have to be this way. We, the people, pumped £45 billion into RBS a decade ago. We own it. The Government therefore can, should they wish, intervene to stop these closures in their tracks. My constituents know, as we all do, that the taxpayer owns 73% of the Royal Bank of Scotland and that the Government can—and, when they choose to, do—get involved. I am sure the Minister does not need me to remind him that when it was announced that Stephen Hester, the previous chief executive of RBS, was leaving, the then Chancellor, George Osborne, told the “Today” programme that

“as the person who represents the taxpayer interest…of course my consent and approval was sought.”

There is undeniable precedent for the Government to get involved in the state-owned Royal Bank of Scotland.

Just before Christmas, the Prime Minister told Parliament that she had chosen not to involve herself in the RBS branch closure programme. My constituents and I hope that the Government had time to reflect on that decision over Christmas and had a change of heart, and that the Minister will confirm today that they will summon RBS chief executive Ross McEwan to Downing Street and let him know that, in the interests of our rural communities, the branch closure programme has to stop. If that is not the case, will the Minister explain to my constituents exactly why the Government have chosen not to involve themselves in the closure programme? Will he explain that to the people of Inveraray, a tourist hotspot with retail outlets, cafés, bars, hotels and a huge, flourishing tourist industry, who will be left without a single bank and will need to make an 80-mile round trip to their nearest Royal Bank of Scotland branch?

In the coming weeks I intend to present three petitions from Campbeltown, Rothesay and Inveraray, so that the people of Argyll and Bute have their voice heard in this place. Until then, I will take every opportunity to press the UK Government to accept their responsibility, because we paid a very heavy price to own RBS and the least we expect is for them to protect our rural communities from the excesses of the Royal Bank’s hatchet men.

--- Later in debate ---

[The Economic Secretary to the Treasury (John Glen)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I thank the hon. Member for East Lothian (Martin Whitfield) and my hon. Friend the Member for Stirling (Stephen Kerr) for securing this debate. I recognise the 10 passionate speeches we have had from the Back Benches and acknowledge the Backbench Business Committee for allowing the debate. I am glad that we can discuss such an important topic as I represent the Government for the first time as Economic Secretary to the Treasury.

It is clear—we all agree—that banks play an important role in our communities and that their services make a valuable everyday difference to millions of individuals, consumers and businesses. I will try to respond to some of the points made and set out some of the areas where I think there are some positives, before I conclude.

Banks exist to help us achieve our goals in life: a rung on the housing ladder, starting a new business, paying in that first pay cheque or saving for that first family holiday. We have heard a lot about the closure of physical branches and I feel that frustration, which has been expressed in my own constituency mailbag this week with the closure of Lloyds bank in Wilton, just outside Salisbury.

I acknowledge the frustration that so many hon. Members have expressed and that their constituents have passed on to them. It is frustrating and disappointing. The closures represent inconvenience and interruption in the pattern of local daily life. It also feels like a greater challenge in a community’s identity—a point made by a number of colleagues this afternoon—particularly in areas where local amenities are limited. That can sometimes be part of a wider changing profile for the high streets and there are a number of challenges that need to be overcome.

I understand hon. Members’ concerns about the announcement that RBS and other banks have made in recent months, and it is right and natural for those who represent the community to ask why those closures must take place. However, I need to be clear at the outset, before I can look at some of the mitigating measures, that these are, despite what we might hope, commercial decisions for each bank to take without Government intervention.

[Brendan O'Hara]

Will the Minister confirm that the Government can intervene if they wish to but have chosen not to do so?

[John Glen]

I will come in a moment to express where the intervention can take place and where that responsibility lies, but first I want to refer to some of the cases made in the debate.

The hon. Member for East Lothian referred to a bank branch closure where the nearest branch is 12 miles away, but there is a Lloyds bank within walking distance. I also want to refer to the point—[Interruption.] It is important that I try to respond to some of the points made, so let me progress. He and another hon. Member made the point about cash deposits at post offices. All post offices can take cash deposits up to £2,000, which covers 95% of transactions, but arrangements can be made by a bank with a post office should customers wish regularly to deposit more.

My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) intervened and talked about the branch in Alloa. There is a Yorkshire Building Society bank within walking distance. In Kinross, there is a TSB within walking distance. I would encourage constituents to vote with their feet. I may be destroying shareholder value in RBS and therefore the Government, but we should make clear where there are alternatives, because they do exist. The hon. Member for Argyll and Bute (Brendan O'Hara) referred to closures in his constituency—I think it was Campbeltown. There is a Halifax branch within walking distance. In Rothesay, there is a TSB within walking distance—[Interruption.] I can concede—I am not going to give way, I have very limited time.