Banking Sector Failures

Debate between Drew Hendry and Martin Whitfield

Thursday 12th July 2018 Westminster Hall

[Drew Hendry]

The hon. Gentleman has highlighted that fact, and I think we all agree with him.

The other comments made by the hon. Gentleman are worthy of highlighting. He talked about the banks being too big to fail, sue or regulate; well, isn’t that the case? We have seen that over recent years. He talked about how reports can suddenly change from saying that there are widespread problems to there being only isolated examples. How come? He also talked about the FCA allowing banks to undertake internal inquiries and compensation schemes, which, again, seems completely incompatible with its role. The hon. Gentleman also said that regulators should be fearless defenders, not complicit in allowing these practices to happen. I thank him for his comments.

[Martin Whitfield]

I take the opportunity to pay tribute to my immediate predecessor, who worked with the APPG on the forerunner to this report. I am sure that this is the case, but does the Scottish National party agree on the need for a financial transactions tribunal along the lines of employment tribunals, which carry so much public confidence?

[Drew Hendry]

There is a need to tackle that. I will come on to exactly what my party proposes, which I think the hon. Gentleman will find favour with.

I do not want to lose the words of the hon. Member for Thirsk and Malton, who said—this is not a direct quote; I hope he will forgive me—that Ministers do not require the good will of the banks to hold them to account. That is important. Finally, he talked about the major banks being so large and complex that it seems impossible to rein them in. He mentioned a solution being a financial services tribunal, so that plaintiffs do not face a cost, win or lose. We have to consider that.

I understand that there is a bit of time left, so if it finds favour with hon. Members I will make a few more comments. I wanted to talk about all these issues, but I will start with the impact of some of the decisions made by the banks on local communities. People in rural areas have been hit by the closure of their banking services. My constituency alone has seen branches close in Inverness, Nairn, Aviemore and Grantown-on-Spey.

I was sent an appeal by the Badenoch and Strathspey Disability Access Panel. Its members felt so strongly that they got together to send their concerns. They wanted to communicate their concerns to Members about the adverse impact of bank closures on rural communities generally, and on the disabled members of those communities. They said:

“Recently the Royal Bank has closed its branches in Aviemore and Grantown, and the Bank of Scotland has closed its branch in Kingussie.”

For those unfamiliar with the geography of my constituency, those are quite disparate communities. Closing the branch in Grantown means that somebody wanting to access RBS services now has a round trip of more than an hour—in good weather—to Inverness to do so. They also say:

“Like the community in general, disabled people are very dissatisfied by the use of Mobile Banks, which offer only limited facilities for a few hours in the week. This causes problems of privacy, queuing (whatever the weather) and security, e.g. sums of money can build up between the visits of the bank and people are rightly worried about the safe keeping of them.”

They are worried about being seen in open queues as they go to mobile banks with piles of cash on them. Cash businesses often have to operate in rural economies. They also say:

“Disabled people have particular worries. The banks claim that Internet banking is a viable alternative, but many disabled people have no access to the internet. Furthermore, they find the option of having to undertake a return journey of between 20 and 30 miles (or more) to visit a proper bank distressing, because it either means depending on someone for transport or trying to use public transport, which is far from frequent in a rural community and which can be challenging to access for a person with a disability.

Finally, the banks have failed in their duty of keeping customers informed. How accessible are the sites chosen for the vans, how accessible is entry into the van, what facilities for the disabled are available in the van, e.g. for deaf or visually impaired people, and how well trained are the staff in dealing with the needs of disabled people? It may be that the banks have made adequate provision, but there has been no attempt to communicate this to disabled customers, who may be deterred from making use of the mobile bank. Incidentally, there has been an occasion when the mobile bank did not appear because of mechanical failure, but there was no system in place for the public to know what was happening.”

They were waiting in the cold for something that would turn up, without communication.

The disability access panel said of one customer that she uses a stick and walking from her house to the bank is a “big undertaking”. No seats are provided for people who are waiting,

“so she had to stand outside, which was difficult. The steps were very high—they did help her up the stairs but she doesn’t think she could do this every week. She asked for bank statements and was told they couldn’t do it…she would have to go to Inverness.”

They could only offer her the balance, just like at an ATM. The panel continues:

“She gave them feedback but they only noted it down on a bit of paper, she didn’t feel they took her complaint seriously.”

All I have had from RBS in response is that it has forwarded some information about the current situation. It is looking for a coach builder; it has not found one yet, but in the short term it is using a system called MyHailo, so customers will have a fob that they can press to get a member of staff from the van to come out. That answers very few of the criticisms that were made.

It is a disgrace that, despite being a 70% shareholder in the bank, the Government have failed to use their influence to represent Scottish communities and reverse devastating branch closures. The public bailed out the Royal Bank of Scotland; it cannot repay communities by simply abandoning them. It is a dereliction of duty that the UK Government did not make stronger representations to RBS about the impact that the closures will have on communities across Scotland and the other nations of the UK as they roll out. RBS branch closures have a devastating impact on Scottish communities, particularly, as I have said, in isolated rural areas. RBS has underestimated how much people rely on traditional in-branch banking services.