Financial Services (South-east London)

Heidi Alexander Excerpts

Friday 18th March 2011 Commons Chamber

[Heidi Alexander (Lewisham East) (Lab)]

I congratulate my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) on securing this debate. When I first learned about Nationwide’s proposals to close two branches in my constituency, I admit to giving it the benefit of the doubt. Rather naively, I thought that, like many other companies, it was going through difficult times and needed to reduce its overheads. I assumed wrongly that the closures would be a small part of a national rationalisation of branches and that the building society’s customers in south-east London would be treated no differently from anyone else. How wrong I was.

My initial generosity of spirit turned to complete disbelief when I discovered, as my right hon. Friend said, that out of a total of 700 branches across the country, there are 13 closures, seven of which are in south-east London. Two of those branches, in Catford and Blackheath, are in my constituency and two others, in Lewisham and Greenwich, are located within easy walking distance of many of those whom I represent. Hundreds if not thousands of my constituents rely on those branches to do their banking. My constituents may not be buying lots of insurance or putting thousands of pounds into individual savings accounts, but they use their local building society branch to do the sorts of things that people all over the UK do—some to access their bank accounts, others to manage their mortgages.

Why is Nationwide closing a swathe of branches in south-east London? It seems to come down to what are known as transaction patterns. Basically, transaction patterns are not as profitable in south-east London as they are elsewhere. This means that Nationwide, regrettably, sees its customers with a south-east London postcode as something of a drag on its business. Basically, customers who live in south-east London do not make it enough money.

I am sorry to say that when my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) and I met Nationwide’s group distribution director and suggested to him that Nationwide customers would simply take their business elsewhere, he did not convince me that he cared. In fact, I left the meeting wondering whether Nationwide would be quite glad to see the back of them. When we pressed him further on why so many branches were closing and why Nationwide was not retaining a central branch, say, in Lewisham, he suggested that demand would be so great for that one branch that it would just “topple over”—I think he referred to it as a “vortex effect”. We were left thinking that there are clearly enough customers wanting to use a branch in south-east London, yet Nationwide is still determined to press on with its closures.

It is tempting for me to rehearse the arguments that have already been made, but I will not because I know that time does not permit. Suffice to say that ours are not the parts of London where people have easy access to the internet at home, or where people want to do everything by telephone. There is a reason why I have 40 people coming into my advice surgery every fortnight. They want to speak to a human being, because it is easier and more convenient. I do not know why their building society will not give them that same opportunity, and I do not know why Nationwide is giving that opportunity to people living in leafier parts of south-east London but not to my constituents.

I wholeheartedly agree with the comments made by my right hon. Friend the Member for Greenwich and Woolwich, and I join him in urging the Minister to look carefully at this situation and to consider what, if anything, he can do to encourage Nationwide to reconsider its decision. It seems ironic that the UK’s biggest building society—which does, after all, call itself “Nationwide”—will have a high street presence only in those parts of the country where there are healthy profits to be made. I cannot help but think that it is nationwide except for those people on modest incomes and for those in my corner of south-east London.