Banks and Communities

David Duguid Excerpts

Thursday 11th January 2018 Westminster Hall

[David Duguid (Banff and Buchan) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gapes, and I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing the debate. I welcome the Minister to his new role and I look forward to working closely with him on this subject. I believe that meetings are being scheduled as I speak.

The issue of banks in our communities is part of the wider issue of excessive centralisation, which has been happening for decades and concerns many of us with rural constituencies across the UK. Centralisation can have a range of unintended consequences for communities in which vital services are removed or reduced. This is a timely debate about an issue of great importance to constituents in Banff and Buchan, who recently learned that they would be losing two Royal Bank of Scotland branches: one in Banff, the county town, and one in Turriff, which is my home town.

Those closures are in addition to others in rural areas in the north-east of Scotland, including Ellon and Huntley. We have already heard that a total of 62 RBS branches across Scotland will close. As my hon. Friend the Member for Stirling (Stephen Kerr) said, we should not forget that those closures come on top of previous closures. The Bank of Scotland branch in Macduff, just across the River Deveron from Banff, closed down just last year. That was the last bank on the high street. Of course, it was said at the time that there were still banks across the river in Banff, but they continue to close. When will that end?

A couple of Clydesdale Bank branches in my constituency that closed down—one in Banff and one in Mintlaw—are still sitting empty more than a year on. In some cases, former banks are grand old buildings that would be valuable for another use. In fact, I must admit that I looked at one of those premises as a potential constituency office, which may or may not have been politically sound, but I could not get the owner of the building to come back to me. They did not seem interested in renting it out. That is perhaps a different subject, but we do not want empty premises on any of our high streets.

These closures affect not only the towns in which the banks are situated, but the surrounding rural communities, particularly in very rural constituencies where towns are far apart. People go to banks not just to withdraw money, but to seek financial advice, apply for mortgages, pay their bills, cash cheques and so on. We should not underestimate the importance of having a friendly face behind a bank counter to explain and guide people through processes that are not everyday occurrences.

As we have heard, a local branch is not just a convenience; it is a necessity. That is particularly true in rural communities. We hear that people increasingly use online banking—these days I do pretty much all my banking online unless someone gives me a cheque, when I have to find a branch to cash that cheque—but when broadband is barely better than dial-up, as in much of our rural communities, that can seem like an extravagant luxury.

One of the RBS closures has been announced for my home town of Turriff, where there is a local savings scheme called the Turriff Friendly Society, which has been around for 143 years. The society has about 400 member accounts. Each member account might have multiple people contributing to it, so perhaps more than 1,000 people are affected. The savings scheme has struggled to cover banking costs in recent years due to low interest rates and it has managed to keep going only by charging small membership fees. The main worry of the society, which currently banks with RBS, is the threat of high costs and service charges for moving to another bank. One of the vital services the society requires is use of a night safe, which is not something we often see in modern banks. It will lose that when the bank closes.

All banks, including RBS, must realise that they are part of the lifeblood of a local community. People provide their loyal custom, and in exchange they expect some very basic services. When it is no longer commercially viable for a branch to remain open, it is imperative that a bank looks at what alternatives can be provided to the people who rely on it. A mobile banking van once a month, for example, is not the answer if there is not the dependable mobile signal that it relies on.