Santander Closures and Local Communities

Jim Shannon Excerpts

Thursday 14th February 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

This is an important issue for me. I thank the hon. Member for Glasgow East (David Linden) for securing the debate and thereby giving us a chance to contribute. Let me also put on the record my congratulations to Scottish National party Members for continually raising issues about bank closures. Every time they have brought such debates to Westminster Hall or the main Chamber, it has come from their constituents. I thank them for highlighting bank closures, because, in doing so, they illustrate how important the banks are, including in my constituency.

I have a real issue with banks closing branches and leaving the most vulnerable in our society without access to their cash and savings. It is all well and good to say that the number of transactions carried out at Santander branches fell by 23% over the past three years, while transactions online and on mobile phones soared by 99%, but that does not say that staff members have been pushing to get that figure up, as I am sure they have.

In the last few months, the Santander branch in Newtownards, which is the major town in my constituency, moved less than 100 yards from Conway Square in the centre of town to the High Street. It has a considerable customer base and very good connections and contacts with the commercial sector. At a Santander event at the branch before Christmas, I met a young lady who was there alongside Santander to state how well it had helped her to start her business from home. That is an example of how things can be done. I put that on the record, because Santander in Newtownards is obviously in touch with its customer base. It is not one of the three branches closing in Northern Ireland.

On bank closures, the fact that a large amount of people use internet banking tells a story, but does it say that they will cease to use their local branch? I do not believe it does. They will still use the branch for all the necessary things, but now they will have to go for miles to find new branches.

The hon. Member for Rutherglen and Hamilton West (Ged Killen), who has left, unfortunately, tabled early day motion 2057 on access to cash. I was more than happy to sign that early day motion, as I always am on important issues. As I have said in other debates here and in the main Chamber, I understand how important it is to have access to cash. I am one of those old-fashioned guys who likes to pay their bills by cash—perhaps that is the economy in Northern Ireland.

[David Linden]

The hon. Gentleman is doing himself down. It is not just an old person thing—not that he is old. Perhaps I should not be saying this from a security point of view, but for about 10 years, since I have been married, I have operated on a jam-jar basis where I take my money out at the beginning of the month and then I have my shopping budget and my fuel budget. I wanted to put that quaint point on the record.

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[Jim Shannon]

I do not feel old, but perhaps I am of a different generation. As always, I thank the hon. Gentleman for reminding me that such things start young, as it did with my mum and dad as well. As an Ulster Scot, as I have said in the Chamber before, and perhaps in the main Chamber, “Every pound’s a prisoner.” Well, it is to me, and it probably is to the hon. Gentleman as well.

I thank the hon. Member for Rutherglen and Hamilton West for tabling the early day motion on access to cash, because it is important to have it recorded. There are 23 signatures to it so far, which indicates the deep interest in the issue.

I remember when First Trust, a local bank, hired a special adviser to get people out the front of the bank au fait with online banking—the hon. Member for Angus (Kirstene Hair) referred to the online banking issue. Within six months, the news was out that the branch was closing due to an uptake in specialist online banking. Hon. Members can draw their own conclusions about how and why that happened. That was the third bank to close in the main town of Newtownards and the sixth to close in my constituency of Strangford; I have had a lot of bank closures. That is why every time SNP Members have raised issues with bank closures, I have wanted to make sure that I was in there fighting for my constituency as well. As I say, over time we have had a number of banks close.

I am really quite intrigued by what the Library briefing information that we have received says, statistically and factually. Page 3 of the briefing says:

“The only region or country of the UK in which the number of bank and building society branches increased between 2010 and 2018 was Northern Ireland”.

There must have been a lot of other constituencies getting lots of banks, because I was losing them all while they were getting them all. I am not quite sure if the statistics are correct—no, I am sure they are. I am not saying they are not true; I would not say that for one second. The briefing continues on page 3:

“Northern Ireland has 405 branches, 21.6 per 100,000 residents—the highest rate of any region or country in the UK.”

That prompts the question of what is happening in my constituency in Newtownards? Why have seven bank branches closed over the past number of years, including Danske Bank, Bank of Ireland, First Trust, and Ulster Bank?

According to Which?, the consumer group, nearly two thirds of the UK’s bank branch network has been lost over the past 30 years. The number of bank and building society branches stood at 20,583 in 1988, according to our own parliamentary records, but an up-to-date analysis by Which? of current account providers suggests that that figure has dwindled to 7,586.

I understand, again from the Library information, that three Santander branches will close in Northern Ireland: in Antrim, in Ballymoney, and on Newtownards Road in Belfast. Those branches are not in my constituency, but this year Santander is due to close 140 branches in the United Kingdom of Great Britain and Northern Ireland, and the reason given is that there has been a marked decrease in the number of transactions. I must say that I do all my banking in the bank or on the phone, and by physical means—using banknotes—on most occasions. That is not simply to keep business in our local branches, although that plays a part. It is also because—honestly—I do not fully trust online banking security. The hon. Member for Glasgow East referred to this issue at the very beginning of the debate and I agree with him, and some of my constituents do not trust it either.

[Brendan O'Hara]

I thank the hon. Gentleman for giving way, and no one can doubt how hard he fights for his Strangford constituents. To justify the closure of its branch in Helensburgh, Santander’s review said that 59% of its customers have used online banking, mobile banking or telephone banking, which means, by its own calculation, 41% of its customers have not. My constituents are predominantly elderly and they are being completely left in the lurch by this branch closure in our town. That is why on Saturday I will be outside the Santander branch in Helensburgh collecting names on a parliamentary petition asking Santander to reverse this deeply harmful decision.

[Jim Shannon]

I thank the hon. Gentleman for his intervention, and I commend him for his industry and for the fact that he will be there on Saturday. He will have no bother getting the signatures for that petition; I have no doubt about that whatsoever. However, I hope that Santander is listening to what he says, because that situation clearly illustrates to me that his bank needs to be there and the customers want it to be there, and we are all here for the same purpose. That is the critical issue for me and for others who are here in Westminster Hall today.

I often think that if the Independent Parliamentary Standards Authority can allow my staff members’ names and addresses to be released by accident, or whatever way it happened, what chance does our money have of withstanding banking attacks? That did happen—it was an oversight, it was a mistake, but it still happened. Honestly, that is why I just have this wee doubt about online banking and other things.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I thank the hon. Member for Strangford (Jim Shannon) for giving way; I usually get his constituency the wrong way round. After some of the scandals that we have had with TSB and others locking their customers out of their online banking, is it not the case that for all this digital innovation we are nowhere close to it being reliable?

[Jim Shannon]

The hon. Lady is absolutely right. In my first year and a half here in Parliament, there were a number of banking breakdowns—one would say—within the Ulster Bank. It happened not once, but twice, and perhaps even three times. Honestly, customers could not access their accounts by any means and it was absolutely ridiculous.

I am coming to an end, Mr Davies; I am very conscious of the time. Santander will retain a network of 614 UK branches, with its customers also having the option to bank using more than 11,000 post office sites across the UK. It is very important to have the post office. I have to say that the post offices in my constituency have been geared up to fill some of the gaps—in Ballynahinch, Killyleagh, Portaferry, Kircubbin and in Newtownards town—where there are post offices. Credit unions have also filled some of the gaps; it has been incredibly important to have the credit unions, as well.

I still have a real fear that this consolidation of banks to cities further isolates rural communities and adds to people’s sense of being alone, with no one to talk to and no one to help, and I believe that we are further isolating an older generation, which cannot be acceptable. That is the critical fact for me. I look to the Minister, as I always do, for a comprehensive response to the issues that we are all bringing collectively to his attention today.

I conclude by saying that I believe we must put in place a minimum expectation of service provision for customers, and if we do not ask the financial institutions to step up and step in, the service provision will continue to dwindle, jobs will be lost and the only winners will be the shareholders and those who get the dividends. I believe that reform must take place and that banks must fulfil obligations to people, and not simply to profit margins.

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[Jim Shannon]

I should have mentioned in my earlier contribution that ATMs in Northern Ireland have been targeted by criminals and thieves. We have the largest number of ATM break-ins and thefts across the whole of Northern Ireland, and the Police Service of Northern Ireland has set up a taskforce to take that on. It is happening with regularity. The people who run the ATMs then say to themselves, “Why should we bother putting an ATM there at all if it’s going to be broken or stolen from?”

[Albert Owen]

That is a very strong point, but I think the banks themselves are ripping people off if they are not giving money. Cashzone machines are charging 95p per transaction. Often they are in poorer communities. The Which? research I referred to earlier highlights that almost two thirds of bank closures have been in the poorest areas of our country—those with an average household income of less than £26,000—so the closures affect our poorer constituents.

We need to look for solutions. We have heard a few ideas about financial hubs, for example. I seriously put to the Government the proposition of using Crown post offices, because we need to look for solutions. They are closing down these buildings, which they often own and which often lie empty for some time, as in Holyhead in my constituency. Such buildings could be used as financial hubs.

I am sure my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) will be very happy that I agree with our Labour party policy to re-establish a Post Office bank—a people’s bank—and to have regional banks so that regional business can benefit. We need to go beyond just blaming the banks; we need to have a proper Government policy and framework.

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[John Glen]

I am anxious not to make my response completely about credit unions, but the 146 credit unions that exist have a whole range of governance models and levels of confidence about the future. I do not think it is my role to dictate how they change, but I am trying to find a model—there are many in Northern Ireland, as the hon. Member for Strangford (Jim Shannon) will know—that can be used as a viable alternative.

I want to move on and make a little progress if I may. I said I would respond to the hon. Member for Barrow and Furness (John Woodcock).

[Jim Shannon]

Will the Minister give way?

[John Glen]

I hope the hon. Gentleman will forgive me, but I want to focus on the thoughtful point made by the hon. Member for Barrow and Furness. He referred to his time as an adviser in the Department for Work and Pensions, and to joined-up Government and the Post Office card. It is true that universal credit will have to be paid into bank accounts, but basic bank accounts, which do not involve any fees, are available. Those a viable and accessible alternative. I am happy to take up any further points he wants to make about that, and to learn from his experience in government.