Community Bank Closures

John Lamont Excerpts

Thursday 8th February 2018 Commons Chamber

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I pay tribute to the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Hazel Grove (Mr Wragg) for bringing this highly topical issue before Parliament.

The announcement in December from Royal Bank of Scotland-NatWest that 62 branches would be shut across Scotland affected my constituency more than most, and I wish to concentrate my remarks on that. Six branches are set to close in Berwickshire, Roxburgh and Selkirk in the latest in a string of closures in the Scottish borders.

We all acknowledge that banking habits are changing and that branches are less well used than they used to be. However, what banks are failing to appreciate is that for those who do use them, they remain more vital than ever. I share Members’ concern that these closures will affect vulnerable customers as well as cash-handling businesses and community groups that need a local branch at which to deposit money.

The impact of bank closures is particularly acute in rural areas, for a number of reasons. First, alternative services are already stretched. The post office in Hawick, for example, is very busy and will struggle to take on extra banking services. Secondly, connectivity in rural areas remains a big challenge. East Berwickshire has some of the worst internet speeds in the whole of the United Kingdom, with more than a third of people unable to receive a decent connection. How can those people be expected to rely on internet banking as an alternative?

High streets in the Scottish borders are struggling, and Jedburgh and Selkirk in my constituency will be particularly badly hit. Selkirk is currently going through a significant amount of town centre regeneration, only for the bank to now announce that it is going to leave. Another issue with one of the branch closures in the borders is disabled access. Duns is set to lose its RBS branch, and although the Bank of Scotland branch remains, it is only open three days a week, and both the branch and its ATM are not wheelchair-accessible.

Many people in the borders think that these closures have been decided by people with little experience of living outside the metropolitan areas of the United Kingdom. Someone has looked at a map without any knowledge of the local area and drawn red crosses all over it. There has been a complete lack of consultation. RBS simply announced these closures and told its customers to like it or lump it. There is a feeling in my area of the Scottish borders that enough is enough.

Opposition to the latest round of closures is unprecedented, and I have been contacted by a huge number of constituents. Tomorrow I will hold three public meetings on branch closures, spread across my constituency, such is the level of concern surrounding this news.

[Danielle Rowley (Midlothian) (Lab)]

Does the hon. Gentleman agree that the announcement by RBS this week that it will keep some branches in Scotland open temporarily—I think one in his constituency, but none in my constituency—does not go nearly far enough and still leaves rural and more deprived communities at risk of losing their services?

[John Lamont]

The hon. Lady makes an important point. I will come on to the bank’s announcement this week shortly, but I share her concern that it goes nowhere near far enough to address the concerns that many people have raised.

I accept the Government’s position that this is a commercial decision for the bank. The public shares are not managed by the Treasury; they are controlled by an arm’s length company, UK Financial Investments, whose role is to manage the public investment, not to manage the bank. It would set a dangerous precedent if there were direct Government interference in a decision such as this.

Having said that, I do not believe that the arrangement with UKFI would have prevented the Government from telling the bank that it had got this decision wrong. The announcement this week from RBS, with its minimal concessions, is simply not good enough. A handful of branches will remain open for just a few more months, and in the Scottish borders, only Melrose will be given a stay of execution. No one really expects these branches to avoid closure ultimately.

I was therefore very surprised to read the comments of the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), praising the bank for this announcement. I was equally surprised to read his comments at the weekend, when he seemed to be taking credit for what he anticipated would be good news from the Royal Bank of Scotland.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Does the hon. Gentleman agree that while the deal done this week, with 10 banks being temporarily reprieved, is not good enough, the UK Government should be exerting their influence—their much greater influence—as the major shareholder on behalf of the taxpayer?

[John Lamont]

I am grateful to the hon. Lady for her point, but if she had listened to what I said a few moments ago, she would have heard me say that while the Government own the shares, we do not have direct control over the day-to-day running of the company. Equally, I believe—I have argued this strongly to the Minister—that the Government should apply moral pressure on the bank to think again on these decisions.

The announcement by the bank does not go far enough, and although the bank has made some changes—minimal changes—it has not fully addressed the concerns that my constituents have raised. I was surprised by the comments of the leader of the Scottish National party at Westminster, who seemed to be trying to take the credit for what he anticipated would be good news from the bank. I was surprised because the bank made it clear that the changes to the plans it had previously announced were in response to concerns raised by politicians from all political parties, and because in the end the news was far from good. A cynic might think this had more to do with the right hon. Gentleman positioning himself ahead of the SNP deputy leadership election than trying to do what was best for his constituents or, indeed, the branch network across Scotland.

The truth is that the campaign against the RBS branch closures has been a truly cross-party effort—led, I must say, by the Scottish Affairs Committee at Westminster. I am pleased to see two other members of the Committee on the Opposition Benches today, and I know that they feel just as passionately as I do about the issue of branch closures. All Members who are losing branches in their constituencies share a desire to make the banks think again.

For the SNP, the loss of 52 branches across Scotland is a price worth paying to give 10 branches a very short temporary stay of execution. This is bad for communities in the borders, bad for rural communities across Scotland and bad for the elderly and the vulnerable. It is a bad deal to avoid further public scrutiny, made without consulting local communities.

--- Later in debate ---

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am delighted to participate in this debate, although I wish it were not necessary. I thank the hon. Member for Stoke-on-Trent North (Ruth Smeeth) for securing the debate and for her comprehensive opening speech.

The speeches we have heard today show there are common concerns across the United Kingdom about the stampede of the banks out of our communities. We are all very concerned. We have had the announcement of yet more bank closures by RBS, with a further 62 branches closing in Scotland. Ten have been reprieved for the moment, following negotiations with the Scottish National party leadership. I agree that that does not go far enough. It certainly does not—

[John Lamont]

Will the hon. Lady give way?

[Patricia Gibson]

In a moment.

It certainly does not do anything for my constituency, but I am not mean-spirited enough not to recognise when progress is made. I know the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) would rather cut his own head off than give the SNP any credit for anything, but I really think he should be more gracious in this case. He said that this was as a result of concerns expressed by all parties, but the fact is that around the negotiation table there was the SNP and RBS—nobody else. So I really do think that he might perhaps put that in his pipe and smoke it.

--- Later in debate ---

[John Lamont]

Will the hon. Lady give way?

[Patricia Gibson]

I will not give way. You’ve put the boot in and the boot’s been put back, so we will leave it at that.

I would be disturbed by the fact that the UK Government, despite being the major shareholder in RBS, has not lifted a finger—[Interruption.] The hon. Gentleman chunters from a sedentary position, driven by his hatred of the SNP and his lack of concern for communities who have been offered a reprieve. It really is quite sad, Madam Deputy Speaker. It is concerning that the UK Government, despite the taxpayer being the major shareholder in RBS, have not lifted a single finger to encourage or force RBS to pause its closure programme and carry out impact assessments or consultations with the communities affected.

[John Lamont]

rose—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I think the hon. Lady has said she is not giving way. She has a short amount of time in which to speak.

[Patricia Gibson]

Thank you, Madam Deputy Speaker. It is disappointing that the UK Government have not lifted a single finger on behalf of the taxpayer to do anything to protect the communities affected by the bank closures. I am disturbed that the UK Government, as the major shareholder, were not consulted about the closures either. That is deeply unfortunate and raises a lot of questions.

I am pleased—other Members may not be—for the communities whose banks have been reprieved, but it does nothing for my constituents in North Ayrshire and Arran, who still face the prospect of losing three banks in Saltcoats, Kilbirnie and Kilwinning. Vowing not to close the last bank in town is something that RBS has now sought to disassociate itself from. That sounded good at the time to the PR companies, but it has not bothered to continue—

[John Lamont]

Will the hon. Lady give way?

[Patricia Gibson]

No, I will not. The hon. Gentleman is being extremely rude. As I said, he is driven not by concern about banking communities but by his hatred of the SNP. It really is rather pathetic.

It sounded good to RBS when it said that it would not close the last bank in town, but that has long been abandoned. As a result, Kilwinning—a town of around 16,000 people—now faces the prospect of losing its last bank. We have seen this week that RBS is not deaf to the uproar that the closures have given rise to. Its public image lies in tatters, but it has opened the door an inch to reprieve some branches. I and SNP activists, who have been out every weekend, on Saturdays and Sundays, since after Christmas collecting parliamentary petition signatures to save our banks—having already collected thousands of signatures—now propose to run at the door that has been slightly opened and kick it open wide to save our branches. We will not give up in our quest to save our banks. We bailed out the banks and it is time that they lived up to their moral obligations to our communities.

If the closures go ahead in my constituency, it will bring the number of towns with no bank to six. The towns of Dalry, Stevenston, West Kilbride, Ardrossan and Beith no longer have a bank and, shortly it seems, RBS intends to add Kilwinning to the list. I honestly do not think that any other constituency in the United Kingdom has been so adversely and cruelly hit. Indeed, the banks are stampeding out of Ayrshire at an alarming and staggering rate.

People have talked today about post offices picking up the slack, but the range of services that banks provide are not always available in post offices. Having a corner at the back of a Spar supermarket is no compensation for customers, who will get no privacy and not get the same level of services. Of course, it was only 10 short years ago that our post offices were under attack and stampeding out of our towns.

I cannot overstate the sense of anger and betrayal felt by these and similarly affected communities across the United Kingdom. From a bank that was bailed out by the taxpayer to secure its very survival, due to its own incompetence—a bank that is still 73% owned by the taxpayer—this is a bitter pill to swallow. That pill is made all the more bitter by the fact that, last year, that very bank paid out £16 million in bonuses. The culture of excessive bonuses lives on, while the customer and taxpayer continue to suffer.

The UK Government retain all legislative and regulatory powers in respect of financial services, so they do indeed have the authority to call a halt—a pause—to the devastating round of closures while banks, stakeholders and the UK and Scottish Governments consider how best to take account of the obligation to banking customers and our communities. Whatever the banks may say, they do have an obligation to our communities—a service obligation, a financial obligation and, I would argue, a moral obligation.

Let us be clear: the bank closures mean that the affected communities no longer have access to day-to-day essential banking services. They mean that my constituents in Kilbirnie must undertake a round trip of 18.8 miles to access their new so-called “local” bank, with most relying on public transport to do so. They mean that RBS customers in Saltcoats are being directed to the next RBS, which is a round trip of 12.8 miles, and Kilwinning customers are being asked to undertake a round trip of 6.8 miles to visit their new “local” branch.

All of that is before we even get to the impact on local businesses, which are increasingly finding themselves without access to night safes. If local businesses cannot bank their takings at the end of the business day, they must incur an extra insurance charge for keeping the cash overnight, with all the security implications of that. These small businesses are the backbone of our communities and our local economy. Make no mistake: to leave a town with no bank is financial and social exclusion.

I have been told by RBS that the branches closed in Kilwinning, Saltcoats and Kilbirnie in my constituency will be replaced by mobile banks. That is not what constituents want. The mobile banks are not reliable, are not disability-compliant and are a poor substitute for the presence of a bank in our towns.

We will continue to fight these closures. We will continue to collect our parliamentary petition signatures because RBS must understand that the people of North Ayrshire and Arran, the people of Kilwinning, Saltcoats and Kilbirnie, will not sit quietly and take the poor treatment that has been meted out to them. I urge the Minister to use all the means at his disposal, as the majority shareholder, on behalf of us, the taxpayer, to sort this matter out and order the banks to pause, consult communities and do the right thing. This matter will not go away.