RBS Closures (Argyll and Bute)

Brendan O'Hara Excerpts

Wednesday 24th January 2018 Westminster Hall

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

I beg to move,

That this House has considered RBS branch closures in Argyll and Bute.

It is a pleasure, as always, to serve under your chairmanship, Sir Henry. 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, in short, a disgrace, and will inflict further long-lasting reputational damage on the Royal Bank of Scotland. For it to have announced the decision to close almost one third of its branch network so callously, without even the courtesy of a consultation period with the communities involved, is quite frankly appalling. For a Royal Bank of Scotland spokesperson to respond, when asked why it did not consult before announcing the closure plan, that “we are not required to consult communities in advance” just shows the contempt in which we customers are held.

One would have thought, hoped and certainly expected that having been bailed out by the public purse to the tune of £45 billion, the Royal Bank of Scotland would have exercised a degree of humility before steaming full speed ahead with a closure plan on this scale. One would have thought, hoped and certainly expected that, being 73% owned by the public purse, the Royal Bank of Scotland would have consulted its largest shareholder before making this shameful announcement, which will cause long-lasting damage to communities across Scotland, both urban and rural.

I would be interested to learn from the Minister if Royal Bank of Scotland management ever consulted the UK Government ahead of the announcement. If it did, what advice did the UK Government give the Royal Bank of Scotland regarding its bank closure programme?

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

My constituency faces the loss of four branches, not only in Inverness but in the thriving tourist towns of Grantown, Aviemore and Nairn. Does my hon. Friend agree with me and the Federation of Small Businesses, which has said that this is bitterly disappointing news for not only people, but businesses in the highlands that will now have difficulties with cash transactions?

[Brendan O'Hara]

My hon. Friend is absolutely right. That is a point that I will come to with some vigour later. The decision of the Royal Bank of Scotland to turn its back on so many of our communities, particularly those where it is the last bank in town, despite an earlier promise not to do such a thing, is a scandalous abdication of its social responsibility to rural Scotland, and to those people who were forced to keep it afloat when it threatened to sink without trace during the financial crisis a decade ago.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

My hon. Friend is making an excellent case. In my constituency, we are losing a branch in Kilwinning, Kilbirnie and Saltcoats. Does my hon. Friend agree that the Royal Bank of Scotland appears to have totally misjudged the public mood, and does not understand the deep sense of anger about the fact that while it is publicly owned, there is no sense of social responsibility or financial inclusion in these decisions?

[Brendan O'Hara]

My hon. Friend is absolutely right. If the Royal Bank of Scotland was not aware before of the anger that this has caused across Scotland, it is very aware now.

It has been well documented that in my Argyll and Bute constituency, RBS plans to close three branches, in Campbeltown, Rothesay and Inveraray. I cannot begin to describe the sense of anger and the growing hostility in those towns, and right across my constituency, at the decision to close those local branches. My constituents are well aware of the hardship that the closures will cause across our communities. It is that anger and burning sense of injustice that has led so many of them to sign my parliamentary petition, which I launched just before Christmas. In Inveraray, Rothesay and Campbeltown, there is not one shop that has refused to take a petition to gather local signatures. I have the petitions here, and will be lodging them on the Floor of the House in the very near future. That is testament to the anger felt across Argyll and Bute at this callous closure plan.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

It further underlined the annoyance to see the Prime Minister wash her hands of the situation at Prime Minister’s questions today, following a question from my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford). Surely the chairman of the Royal Bank of Scotland cannot be gliding on to BBC’s “Question Time” ignoring this issue? Ross McEwan cannot continue ignoring invites to meetings. These people, with their salaries, should show respect to the people and justify what they are doing. The UK Government should make sure that these people are not making monkeys of them, either, and should ensure that they go.

[Brendan O'Hara]

My hon. Friend makes a very powerful case. Like the Royal Bank of Scotland at the beginning, the UK Government have underestimated the sense of anger within our rural communities. We must keep up the pressure on the UK Government to act, and act swiftly.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

The hon. Gentleman is making a very powerful case, much of which I agree with. In my constituency, I am losing six bank branches. I suspect the anger in my communities is equal to what he is experiencing in Argyll and Bute. Does he share my concerns that the bank is putting too much additional pressure on the post office network, which I do not think has the capacity to deal with that extra custom? Post Office Ltd is saying one thing about what the network can deliver, and post office operators are saying something very different.

[Brendan O'Hara]

The hon. Gentleman is absolutely right. The idea that the post office network in our rural communities can somehow pick up the slack on this is nonsensical. It is an absolute fantasy and it will not work.

Without any consultation whatever, RBS has decided that people in Campbeltown who wish to continue banking with it must now endure a 175-mile round trip to Oban. Alternatively, they could drive an hour to Claonaig, take a 30-minute ferry to Lochranza on Arran and drive over the hills for 40 minutes to bank at the branch in Brodick. RBS customers on the Isle of Bute, in order to remain RBS customers, will be expected to take a ferry to the mainland, get off at Wemyss Bay and drive or get a bus to Largs. No matter which way one looks at it, a visit to the nearest branch of RBS for customers in Campbeltown and Bute will be a day out of their lives.

Worse still is the position of the people of Inveraray. The closure of the RBS branch in Inveraray, despite previous assurances that RBS would not close the last bank in a town, means that there will be absolutely no banking facilities in that town at all. It borders on the unbelievable that a town such as Inveraray, with a booming tourist industry and three good-size hotels, and boasting numerous cafés, bars, restaurants and high-quality clothing outlets—a town that has an estate and a castle that is a magnet for tourists—will be left without a single bank. The Inveraray-based author and journalist, Marian Pallister, who launched her own online petition against the closures, was spot on when she said:

“The Inveraray branch is used by businesses, individuals and charities throughout Mid Argyll. Online banking is not a valid alternative in many rural areas and now businesses and charities will have to make a 75-mile round trip to the nearest RBS branch. Inveraray is a tourist hub and while this closure disadvantages local people, it is a death sentence for the local tourist industry”.

[Christine Jardine (Edinburgh West) (LD)]

I agree with much of what the hon. Gentleman says. I do not represent an area that is losing branches, but I represent the headquarters; RBS is based in my constituency. Does he share my disappointment that RBS appears not to have researched whether the areas where it is closing branches were the same—or not the same—as those with broadband blackspots? The facilities that these areas need to replace the bank have not yet been rolled out to them.

[Brendan O'Hara]

I absolutely agree. It is a double whammy for so many of our rural communities. Whether RBS likes it or not, there are still plenty of people who rely on a local, accessible bank in their town or village: the elderly, who still depend on an over-the-counter banking facility; people with learning difficulties, who have built a relationship with bank staff and trust them to help with their banking needs; small shops and businesses—of which we have an abundance in Argyll and Bute—that still primarily use cash; and, of course, foreign tourists, of whom we have a plentiful supply in Argyll and Bute, looking for a cash machine or the ability to change currency, for which a local bank is essential. Moreover, as the hon. Lady said, people do not yet always have sufficiently reliable broadband to bank online, and let us not forget that some people still do not want to bank online. Every one of those groups will be affected.

[Drew Hendry]

I thank my hon. Friend for giving way once again; he is being very generous. He makes the point very powerfully about access for people in rural communities, and for those who are disadvantaged in different ways. Online banking just does not cut it. For example, people cannot get cash from their computer, and when the branches go, so do the cash machines, which further disadvantages businesses and people in our communities. Does he agree?

[Brendan O'Hara]

I absolutely agree, and I find it utterly bewildering that the work was not done—or, if the work was done, that the Royal Bank of Scotland did not reach that very obvious conclusion.

Let me be clear: I have no doubt that the number of people accessing their local branch is falling, but I question the way in which RBS has collated the numbers. It is twisting and manipulating them to make them justify a predetermined case for branch closures. The Royal Bank of Scotland appears to have a pretty unique way of calculating the number of customers accessing its branches. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) said in the main Chamber just before Christmas that

“RBS is trying to create a picture of these branches as a relic of the past”—[Official Report, 18 December 2017; Vol. 633, c. 883.]

RBS is saying that “demand for branch banking” has declined to such an extent that customers are abandoning branches in their droves.

[Patricia Gibson]

rose—

[Kirstene Hair (Angus) (Con)]

rose—

[Brendan O'Hara]

I will make some progress before I give way again.

Using RBS’s own statistics, however, my right hon. Friend the Member for Ross, Skye and Lochaber showed how misleading those numbers are. He explained that the justification given by the Royal Bank of Scotland for closing a branch in his constituency, in the town of Beauly, was that only 27 people a week used it, yet the Beauly branch has almost 3,500 customers and processed 29,000 transactions last year; 29,000 transactions from just 27 customers does not seem right to me. As I said, I cannot help think that the figures have been calculated in such a way as to simply justify a pre-planned closure.

If the Royal Bank of Scotland wants a meaningful, open and honest discussion about closing local branches, then let us have one, but let it be predicated on facts, not the spin and obfuscation that we have witnessed up until now.

[Patricia Gibson]

My hon. Friend makes a powerful argument. He talks about statistics, the number of customers using banks, and those figures being used as a lever to close branches in order to cut costs, but one way of cutting costs would have been not to award £16 million in bonuses last year.

[Brendan O'Hara]

I could not put it better myself, so I will not try to. Let me be clear: there is more to these ruthless closures than the effect on individuals and businesses. As many know, Argyll and Bute is a beautiful but remote part of the country. With that remoteness come many demographic and economic challenges, but we are determined to overcome those obstacles. Argyll and Bute Council, Highlands and Islands Enterprise, the Argyll and Bute Economic Forum, Scottish Rural Action and I, along with many others, have been busy telling folk that Argyll and Bute is open for business. Together we have been actively promoting Argyll and Bute as a great place to live, work, raise a family, invest and open a business, but the Royal Bank of Scotland has kicked us in the teeth.

As Cleland Sneddon, the chief executive of Argyll and Bute Council, said:

“I believe RBS has a responsibility to those rural communities that have banked with them for generations and this decision appears to have scant regard to their particular needs…Argyll and Bute Council has called on RBS to urgently review this decision”.

Nicholas Ferguson, chair of the Argyll and Bute Economic Forum, was equally scathing:

“For the last few years, major efforts have gone into changing the depopulation trend in Argyll and Bute. To do this, we needed to create jobs and major progress has been made…But Argyll is a place of many small firms.

These rely heavily on local banking services and the plans by RBS to close their offices in three of our most important towns would be a major setback…As the UK government is the principal owner of RBS, I would strongly request that this decision be reversed.”

Those two are not alone. Emma Cooper of Scottish Rural Action, who is a constituent living on the Isle of Bute, said:

“It is our opinion that these branch closures demonstrate a lack of care and compassion from RBS about rural communities and vulnerable people, who will be disproportionately impacted by the decision, and the process by which these decisions were made was unethical.”

As the Minister can tell, Argyll and Bute is demanding action on the issue. He does not need me to remind him that there is a precedent: George Osborne, when he got involved as Stephen Hester was leaving RBS, told the BBC’s “Today” programme that

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

So there is precedent, and it is an undeniable fact that the Government have the power to intervene. It is only a matter of whether they choose to exercise that power and to get involved.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Will my hon. Friend give way?

[Brendan O'Hara]

If the intervention is extremely short.

[Ian Blackford]

My hon. Friend is making a very important point. Have not the Government demonstrated that they have intervened on matters relating to management of the Royal Bank of Scotland? Nothing is more important to our communities than the maintenance of the bank branch network. The Government have a responsibility and a duty to ensure that RBS recants this decision.

[Brendan O'Hara]

My right hon. Friend is absolutely right.

The Minister should be in no doubt: the people of Argyll and Bute, Argyll and Bute Council, the Argyll and Bute Economic Forum and Scottish Rural Action demand that the UK Government intervene to stop the closures. Will the UK Government choose to get involved, or will they ignore the overwhelming opinion of the people of Argyll and Bute and choose to abandon my constituents to the RBS hatchet men? My constituents want to hear from the Government that they will bring Ross McEwan to the Treasury to tell him that, in the interests of our communities, the brutal branch closures will not go ahead. Anything less than that and the UK Government will stand accused of being complicit in the shameful betrayal of rural Scotland.

In conclusion, will the Minister tell me whether RBS management consulted the UK Government ahead of the announcement? If so, what advice did it receive from the UK Government? Does he accept that the UK Government, as the largest shareholder, can intervene to stop the closure, should they choose to do so?