Community Bank Closures

James Frith Excerpts

Thursday 8th February 2018 Commons Chamber

[Ruth Smeeth]

I could not agree more with my hon. Friend. In fact, one of my concerns is that no assessment is made of whether local post offices have the capacity to deal with these issues when a bank in a community closes, and there is no communication with those post offices.

Britain has often been described as a nation of shopkeepers, so what does it say about us if we are unable to maintain the national banking infrastructure that our small traders need? There is a safety aspect to these closures as well. Should the final Lloyds branch in Burslem close, the only remaining ATMs will be inside shops. There will be no external ATMs available in the town and nowhere to withdraw cash after closing time. If I were to go for a drink in Burslem one evening, and as the vice chair of the all-party beer group, it would be impolite not to—

[James Frith (Bury North) (Lab)]

You’re propping it up.

[Ruth Smeeth]

Absolutely. If I were to go for a drink, there would be nowhere for me to get cash out to pay for a taxi home. For many young women—I am not sure whether or not I still fall into that category—

--- Later in debate ---

[James Frith (Bury North) (Lab)]

I congratulate my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) and the hon. Member for Hazel Grove (Mr Wragg) on securing the debate. I would like to speak about Ramsbottom, which is frequently in the top-10 lists of best places to live and visit. Of the two market towns that I am proud to represent, Rammy has been hit first and hardest by the bank closure trend. It needs a community banking offer. When I visited small businesses there in December, the shopkeepers, charities and businesses all spoke of the distinct mix of problems that they face in keeping their heads above water.

Community banks, and banks generally, bring tradespeople to the town. They increase footfall and help to determine a town’s future prospects. Paying in, cashing up, small impulse buys, floats, cash-only stalls, making deposits and general local bank services are all still part of business life and life and living in Ramsbottom.

However, first Barclays then NatWest closed, and now Royal Bank of Scotland is reducing its opening hours, with visitors to Rammy, and customers reducing with them. A bank nearby is likely to determine the opening hours of any retail operation or business, as the proprietor will need to factor in the bank’s closing time with that of their business and the leaving time of their staff. It will be one of the things that a business proprietor considers in determining where to set up in the first place, and if a local authority is struggling to attract new shops, it will understandably opt for another eatery for the night-time economy or reach for a high-street name, thus risking diluting the independent offer of a town like ours, which is, in its first instance, the fundamental nature of the place and why visitors come at all.

It is all tied in to this proud community—one that has pulled together at a time of mourning recently, or a time of great testing—the Boxing day floods two years ago. There is always something fun to do and to see, whether at the chocolate festival, black pudding throwing competition—[Interruption.] It is true. Or the Head for the Hills music festival, the civic and town markets, or just a healthy mooch around the shops.

Of course, the problems cannot all be laid at the door of the banks, but they are a considerable part of the cumulative issues facing this community, including business rates, public transport links drying up, and less disposable income after making ends meet. It is the independent nature of Ramsbottom that gives it its zeal. These are our entrepreneurs, who are not denying the march of progress with broadband, with cash alternatives and online shopping; they are, as I am, rightly defending their modern but traditional offer. The butcher, the baker, the dressmaker, the art gallery, the coffee lounge, craft shops, pet shops, micro-breweries, chocolate factory and specialist food stores, family-run restaurants as well as charity shops, have all spoken to me of the impact on them of the drying up of available banking and a local bank.

The increasing risk of isolation for our older communities is also a consideration. Those for whom Ramsbottom is the nearest town with a bank, endure average broadband speeds 27% lower than the national average. My constituency is ranked 62nd of 75 constituencies in the north-west on that measure, and 467th of 650 constituencies in the UK. In Affetside, broadband is practically non-existent, and we all know that areas with no history of suitable broadband will also suffer from low-skilled internet use, which does not square with the inevitable claim that people can use internet banking instead.

[Caroline Flint]

My hon. Friend makes a superb point about access to broadband. In my constituency, some 30% of people either have very slow access or no access at all, and I can vouch for the fact that in Bawtry, where the last bank is in danger of closing, it is a nightmare either making mobile phone calls or getting on to the internet. Could not the Government say to the banks that until those areas have the pleasure of the fast broadband that our cities share, they should not close any services down to just online services?

[James Frith]

My right hon. Friend makes an excellent point. Is it not true that too often, when we see the march of progress, people assume that the have-nots will simply catch up, and that no intervention is required from Government or statute to bring that about?

When I asked business owners in the town for their input for today’s debate, the following contributions stood out. Steven White, pet shop owner on Ramsbottom High Street, said that:

“we banked with NatWest…the direct impact is that we now have to queue at one counter in the post office”

while others are doing all sorts. He added:

“We get our weekly change here, and there is now a delay in the payment hitting our account, so when things are tight, as they sometimes are, we can no longer rely on getting our day’s receipts in to help”

with cash flow. He points out:

“We could move banks but there is no confidence that who we move to will stay open in our town”

or nearby.

Mrs P’s Luxury Ice Cream told me:

“We have found it increasingly difficult to bank cash as the RBS is now closed two days during the week. I feel that there is very little consideration given to the elderly population”—

many of whom are their customers—

“who largely prefer face to face banking.”

Louise Isherwood of Ramsbottom Sweet Shop said:

“People used to pop in whilst in town using the banks…there are so many less people in town”

now

“on a daily basis…to make it worse, if the banks sell the building…for use as a wine bar”

people will not visit during the day—and they will not buy sweets at night.

In closing, here are some possible solutions. The Government should sponsor more challenger banks that operate at break even or not for profit. We should consider extending the role and mandate of credit unions. Labour’s proposed regional investment banks would ensure that community banking has a primary role in the service offer, and the Government should adopt that principle immediately. There should be rewards in the form of tax incentives for community banking operations when the “profit and loss” or “balance sheet” argument of the existing bank is that it only breaks even.

I rather fear that the Government will hold their hands up and say, “We are just the Government; what can we do?” However, there is a case for them to intervene, and for the industrial strategy to incorporate the experience of hundreds of thousands of businesses. They are the real employers, wealth creators and taxpayers. At least 80% of our economy is made by those people. They are job-creating heroes, sweating it so that the Government receive their taxes. The Government should not dismiss the argument that this is simply a commercial decision for the big banks.

I urge the Government, instead of propping up the Carillion model of employment, to stand up for these real employers, heed the concerns expressed about the withdrawal of banks, and make a commitment to new community banking so that everyone in our society can benefit.