Santander Closures and Local Communities

Hugh Gaffney Excerpts

Thursday 14th February 2019 Westminster Hall

[David Linden]

Absolutely. That fits nicely with the next point I want to make, which is about impact assessments. The bank concedes that only half of the customers who use the Parkhead branch use online, mobile or telephone banking services. The data concerning digital exclusion in the east end is widely available, so it beggars belief that Santander has overlooked it and still plans to pull down the shutters on a branch that serves some of the most vulnerable and isolated people in the country.

I want to turn now to the issue of reliance on the post office network to deliver banking services. Having asked the Minister about it during Treasury questions a couple of weeks ago, I can almost anticipate his response: that Santander customers can just do their banking at the post office. I think my hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) felt frustration about that during her Adjournment debate last week.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I have a background in the Post Office. All we see is closure after closure, and now that WHSmith—the worst retailer on the high street—is taking the contract, it could also close post offices. The excuse given by the banks—that if they close down, people can use the post office—needs to be looked at seriously.

--- Later in debate ---

[Neil Parish]

I could not agree more with the hon. Gentleman, because I just do not think that enough thought is being given to this process. Naturally, it says in this letter I received from Santander that its customers in Axminster are able to go to the post office for cash, to put in cheques and to make withdrawals. Again, however, it is not like having a banking service. That is the other reason that I wanted to speak in this debate.

My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) made the point that we should not just highlight Santander. If I go back to the issues in Axminster, we have had branch closures there for Barclays and NatWest, and the one we have left is Lloyds. Let us hope that Lloyds stays in the town and indeed I hope that all the Santander customers pile along to Lloyds. As Members well know—putting my farming hat back on—it is not always easy to change banks. I used to have a very large overdraft with NatWest, and they did not always want me to transfer it. When a person has a business, they want some personal attention; they want to be able to see somebody; and they want to get some sort of decision on not only their everyday banking, but their business building or their business. That is just not there anymore.

I wonder, as the banks contract, whether there is one bank out there—they all advertise that they are going to listen to us more and have more local services, but they all close them—that will listen to this debate and think, “Perhaps we can work in the other direction. We will offer some sort of personal attention and look after people and businesses, and actually be there. We might open on a Saturday morning after 12.30.” Most of us work, but the banks close their branches at 12.30. Some of my Axminster constituents can go to Honiton, which is quite difficult to get to but is not that far away, but that branch will be closed at 12.30. What is the point? If a bank is going to provide a service, why does it not open and provide it?

[Hugh Gaffney]

I thank the hon. Gentleman for making that point, because we did have a network: it was called the Crown post offices. They are closing them down. If the banks want to shut down, give us work in the post offices. Let us stop the closure of Crown post offices, get them reopened, and give the Communication Workers Union the work.

[Neil Parish]

The hon. Gentleman is attempting to entice me down a route that I do not quite want to go down, but I agree with him in many respects. Post offices provide a great service, and if we are to lose them as well, that is a real problem. However, at this moment in time I am in full flow about the banks, so I ask the hon. Gentleman not to put me off that particular subject.

--- Later in debate ---

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Rosindell. I thank my constituency neighbour, the hon. Member for Glasgow East (David Linden), for securing this debate.

In my constituency of Coatbridge, Chryston and Bellshill, we have seen the loss of local branches in recent years. Recently, Stepps, Tannochside and Bellshill have all seen their local Royal Bank of Scotland close down, despite the fact that the Government own the majority stake in RBS and could have kept some of those branches open and protected those jobs. We have also seen the collapse of Scotland’s oldest savings bank, the Airdrie Savings Bank, which led to the loss of branches in Coatbridge and Bellshill.

The loss of those branches in my constituency are just a snapshot of what I have heard today and what is happening throughout the whole country. I repeat that the rot started with the Crown post office closures. Now Santander says, “Let’s turn to the Post Office. It can help us.” Too little, too late.

[Mr Sweeney]

My hon. Friend is making a very important point about the post offices. One of the justification for the Santander closures was, “Don’t worry. The bank service can transition over to the post office.” The Springburn post office has been put up for franchising and will be in the back of a grocery store somewhere. That is hardly a place that someone is going to go to take out a mortgage, is it?

[Hugh Gaffney]

That is exactly what is happening up and down the country. I have seen many fighting for people’s jobs in Crown post offices, which have good terms and conditions that are not matched by WHSmith.

I asked the Chancellor in a written question whether the Treasury had made any assessment of the impact of Santander’s decision to close branches on consumers’ access to money. I received a reply from a Minister, who stated that the Treasury had made no assessment, and that it was a commercial decision for Santander. How often have we heard that? I would like the Chancellor and his Treasury Ministers to tell the affected communities that the Government have made no efforts to determine the impact of the proposed branch closures on their ability to access their money. That is their written answer: no effort, no access. That is shameful, but it is an all-too-common attitude for this Government.

The impact of the branch closures has been worsened by the loss of cashpoints. Figures released this week by Which? show that 280 cashpoints were lost across Scotland in 2018, 203 of which were free to use. Despite the growth of online and telephone banking, 73% of the public continue to use cash frequently to pay for goods and services. My children still use cash; the elderly still use cash. This is not a cashless community yet. The branch closures and the loss of cashpoints only make it harder for people to access their money. The branches and cashpoints are being lost in the poorest and most vulnerable communities in the UK, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) pointed out, and as many others up and down the country know.

Which? has asked the Government to appoint a new regulator with sole responsibility for cash infrastructure. I think that is a much-needed step forward to ensure that consumers and businesses can continue to access cash. I urge the Government to take action by creating a regulator, so we can begin to reverse some of the devastating effects that our communities have experienced because of the branch closures and the loss of cashpoints. If they are not listening today, when will they start listening?