Santander Closures and Local Communities

Brendan O'Hara Excerpts

Thursday 14th February 2019 Westminster Hall

[David Linden]

Absolutely. The hon. Lady makes a powerful point. I intend to come on to the recommendation that people go to the post office, because the argument is weak and does not stand up to scrutiny. She is right to point out the mass exodus of banks from high streets. Banks are a major part of the local economy, and it does not do them any good if they abandon the high street.

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

The closure of the branch in Helensburgh in my constituency means that the nearest Santander branch will be 25 miles away in the west end of Glasgow. I have serious concerns about the so-called impact assessment, which has been carried out only after the announcement. Does my hon. Friend share my fear that it will be little more than an exercise in justifying a decision that has already been made?

[David Linden]

Absolutely. My hon. Friend does a power of work in his capacity as chair of the all-party group on rural poverty. He speaks powerfully about the impact the closure will have in his rural constituency. In my constituency, customers are not quite being asked to go 25 miles, but the point is well made, and I hope the Minister has taken it on board.

--- Later in debate ---

[David Linden]

That is an excellent point, and one I intend to come on to later. My hon. Friend has been a doughty campaigner on this issue, not only in terms of post offices, but in fighting a good campaign against the Royal Bank of Scotland closures in Renfrew, and we should pay tribute to that.

[Brendan O'Hara]

My hon. Friend is being incredibly generous in giving way. Before we move on from the role of the Post Office, I would like to share some information I received this morning. In a letter to me on 24 January, Santander assured me that it was working closely with post offices near closing branches to keep them informed and supported. This morning, the Post Office wrote to me saying that, due to commercial sensitivities, Santander does not share customer numbers with it, and therefore that it

“is exceptionally difficult to model the impact…on any given branch without having information on numbers and amount of cash withdrawals”.

Does my hon. Friend share my concerns about the veracity of an impact assessment that encourages customers to use the Post Office’s services, when Santander does not even share basic information with it?

[David Linden]

Herein lies the issue that hon. Members on both sides of the House want to raise today. The Government’s line so far has been, “Oh, well, it’s fine—we’ll just shunt this issue on to the Post Office.” I am grateful that a number of hon. Members are homing in on the question of the Post Office, because that is the key weakness in Santander’s argument. First, there is a capacity issue because, given the rate at which banks are closing, we are expecting post offices to adapt to a significantly higher number of counter transactions within the same constraints as previously.

--- Later in debate ---

[David Linden]

I know the hon. Gentleman has had experience of banks fleeing his constituency, where the local economy was already quite fragile, so he is right to put that on record. It is great to hear that input from him and from his colleague the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), because Wales is also seeing this happen.

While banks will point to the post office as a convenient replacement when they bail on communities, post offices certainly cannot be relied on to bail out the banks. I understand that banks need to look at economic viability when deciding whether to keep branches open, but they cannot fully replace a critical service with something that does not provide the same level of service and that cannot guarantee that it will even be able to keep its own doors open.

[Brendan O'Hara]

My hon. Friend is making a powerful case, and he is right to point out the lazy assumption that the post office will always be there to pick up the slack. I know for a fact that that is not true: in my constituency, in the village of Tighnabruaich, the post office ran out of money, and pensioners could not pick up their pensions last month. The postmistress did everything she possibly could to mitigate the circumstances, but while they were unusual, they were not unique, and they will be repeated time and again if we allow banks to assume that post offices will be there at all times to pick up the slack.

[David Linden]

Absolutely. Such is my friendship with my hon. Friend that we share a psychic bond. He probably knows that I will come on to speak about access to cash.

The Access to Cash Review’s interim report from a couple of months ago makes quite stark reading. Despite more and more services becoming cashless, approximately 8 million people—around 17% of the UK population—say that cash is an economic necessity for them. However, that 17% is not evenly spread. Scotland is much more open to economic damage from the transition to a cashless society than other parts of the UK. The statistics show that cash use in London declined by around 8.5% in the 2017-18 financial year, compared with only 3.3% in Scotland. Scotland is still much more reliant on cash, and it is therefore vital that we are not pushed to become cashless at the same pace as other parts of the UK. Quite frankly, that cannot and should not be forced on people, particularly some of our older, disabled or more vulnerable people.

--- Later in debate ---

[Jim Shannon]

I do not feel old, but perhaps I am of a different generation. As always, I thank the hon. Gentleman for reminding me that such things start young, as it did with my mum and dad as well. As an Ulster Scot, as I have said in the Chamber before, and perhaps in the main Chamber, “Every pound’s a prisoner.” Well, it is to me, and it probably is to the hon. Gentleman as well.

I thank the hon. Member for Rutherglen and Hamilton West for tabling the early day motion on access to cash, because it is important to have it recorded. There are 23 signatures to it so far, which indicates the deep interest in the issue.

I remember when First Trust, a local bank, hired a special adviser to get people out the front of the bank au fait with online banking—the hon. Member for Angus (Kirstene Hair) referred to the online banking issue. Within six months, the news was out that the branch was closing due to an uptake in specialist online banking. Hon. Members can draw their own conclusions about how and why that happened. That was the third bank to close in the main town of Newtownards and the sixth to close in my constituency of Strangford; I have had a lot of bank closures. That is why every time SNP Members have raised issues with bank closures, I have wanted to make sure that I was in there fighting for my constituency as well. As I say, over time we have had a number of banks close.

I am really quite intrigued by what the Library briefing information that we have received says, statistically and factually. Page 3 of the briefing says:

“The only region or country of the UK in which the number of bank and building society branches increased between 2010 and 2018 was Northern Ireland”.

There must have been a lot of other constituencies getting lots of banks, because I was losing them all while they were getting them all. I am not quite sure if the statistics are correct—no, I am sure they are. I am not saying they are not true; I would not say that for one second. The briefing continues on page 3:

“Northern Ireland has 405 branches, 21.6 per 100,000 residents—the highest rate of any region or country in the UK.”

That prompts the question of what is happening in my constituency in Newtownards? Why have seven bank branches closed over the past number of years, including Danske Bank, Bank of Ireland, First Trust, and Ulster Bank?

According to Which?, the consumer group, nearly two thirds of the UK’s bank branch network has been lost over the past 30 years. The number of bank and building society branches stood at 20,583 in 1988, according to our own parliamentary records, but an up-to-date analysis by Which? of current account providers suggests that that figure has dwindled to 7,586.

I understand, again from the Library information, that three Santander branches will close in Northern Ireland: in Antrim, in Ballymoney, and on Newtownards Road in Belfast. Those branches are not in my constituency, but this year Santander is due to close 140 branches in the United Kingdom of Great Britain and Northern Ireland, and the reason given is that there has been a marked decrease in the number of transactions. I must say that I do all my banking in the bank or on the phone, and by physical means—using banknotes—on most occasions. That is not simply to keep business in our local branches, although that plays a part. It is also because—honestly—I do not fully trust online banking security. The hon. Member for Glasgow East referred to this issue at the very beginning of the debate and I agree with him, and some of my constituents do not trust it either.

[Brendan O'Hara]

I thank the hon. Gentleman for giving way, and no one can doubt how hard he fights for his Strangford constituents. To justify the closure of its branch in Helensburgh, Santander’s review said that 59% of its customers have used online banking, mobile banking or telephone banking, which means, by its own calculation, 41% of its customers have not. My constituents are predominantly elderly and they are being completely left in the lurch by this branch closure in our town. That is why on Saturday I will be outside the Santander branch in Helensburgh collecting names on a parliamentary petition asking Santander to reverse this deeply harmful decision.

[Jim Shannon]

I thank the hon. Gentleman for his intervention, and I commend him for his industry and for the fact that he will be there on Saturday. He will have no bother getting the signatures for that petition; I have no doubt about that whatsoever. However, I hope that Santander is listening to what he says, because that situation clearly illustrates to me that his bank needs to be there and the customers want it to be there, and we are all here for the same purpose. That is the critical issue for me and for others who are here in Westminster Hall today.

I often think that if the Independent Parliamentary Standards Authority can allow my staff members’ names and addresses to be released by accident, or whatever way it happened, what chance does our money have of withstanding banking attacks? That did happen—it was an oversight, it was a mistake, but it still happened. Honestly, that is why I just have this wee doubt about online banking and other things.