Santander Closures and Local Communities

Kirstene Hair Excerpts

Thursday 14th February 2019 Westminster Hall

[Kirstene Hair (Angus) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Glasgow East (David Linden) on securing this important debate; we can see from the number of Members present the powerful cross-party consensus on the impact of bank branch closures on our local communities.

The most recent closures in my constituency and across the UK continue a worrying trend of declining public services. In Angus, 2015 saw the closure of the Royal Bank of Scotland in Brechin, 2016 saw the Edzell Bank of Scotland branch close and in 2017 it was TSB in Kirriemuir. In 2018, RBS in Montrose and the Bank of Scotland in Kirriemuir closed, and it has now been announced that there will be two further Santander closures by the end of the year.

From 2015 to 2019, my local authority saw a total of 12 bank branches close. Looking at the wider picture, from 2010 to 2018 the country as a whole saw a 35% decline in bank branches, but Scotland was above that national average, at 38%. Angus now has one Santander branch in the constituency catering for a population of 100,000 people, although obviously not all of them are its customers.

I was disappointed, as the local Member, to hear about the closures in my constituency through a local news outlet, as opposed to from the Santander public affairs team; I believe Members of the Scottish Parliament heard through that route. I got a letter through a few days afterwards. I have not been given the opportunity to meet Santander until a few weeks from now. I am very disappointed by the way in which it has treated this serious issue.

The closures have an important impact on communities across the UK, with rural communities affected slightly differently. Both customers and staff find themselves in incredibly difficult situations, as the hon. Member for Glasgow East pointed out. Of course, the solution to all this is digitisation, but that does not help everyone. I was quite surprised when I went to bank a cheque in my local branch the other day and was told that I did not need to do that in the branch because it can be done via phone. Even at 29, I was surprised by the level of technology that some banks have pushed forward. However, those options are not available to all.

People in rural communities increasingly feel that they are being penalised because of where they choose to stay, whether by bank closures or through other services being taken away from them. These bank branches are in the heart of communities and they cannot simply be replaced by the cited alternatives.

Let us look at the digitisation offering. In an area such as Angus, there is not fantastic mobile coverage or broadband across the whole constituency. In fact, my constituency was ranked 612 out of the 650 constituencies in the UK—one of the worst—for the roll-out of superfast broadband. People simply do not have access to it, so although yes, more people are using the internet for their personal needs—the figure went up from 63% to 83% between 2007 and 2016—that provision is not available to all. As much as banks are keen to highlight the digital offering, they have to recognise that that cannot be used by everyone. We also have problems with mobile coverage. I know that it can be suggested that people phone the bank on a landline to raise their issues, but between 2012 and 2017 landline minutes declined by about 50% because people are using their mobiles. But in Angus, we still have many notspots, where people simply cannot get through.

The other alternative that hon. Members have mentioned is the use of post offices. As much as I welcome Santander’s provision to help the more vulnerable to understand how they can access post office services, Santander will not be able to do that with them every day. There are post offices in the towns where my closures are, in Brechin and Forfar, and I have been assured that they will be able to deal with all Santander customers wanting to deposit and withdraw cash, to pay in cheques and to check bank balances, but what if they need to print a statement or transfer money to another person’s account? What if they have questions about their mortgage? Those are all issues that people need to deal with day to day. Santander needs to look into those specific issues and how it would expect people without connectivity and without a post office nearby to be able to carry out those tasks.

[Ged Killen]

The hon. Lady makes a powerful point about the things that people need to do in a bank branch. I recently met Bank of Scotland representatives in my constituency and they spoke at great length about how wonderful the banking protocol was and how they had used it to stop transactions by vulnerable customers who had been sent along there by rogue salesmen or whoever to lift money out of the bank. They were able to spot that because they knew the customers; they had a relationship with them. Shortly thereafter, the Bank of Scotland announced that it was closing a branch nearby. How can the provisions of the banking protocol possibly be being met if everything is done online?

[Kirstene Hair]

The hon. Gentleman makes a vital point. Many people want face-to-face interaction. For some people, the person they speak to when they go to the bank might be the only person they speak to all day, so it helps with combating loneliness, which we all know is so important. The hon. Gentleman makes the very valuable point that these staff get to know people; they create a relationship with their customers and look out for them on a personal basis.

As for the Post Office offering, one in three rural post offices closed between 2000 and 2009, and that decline has continued. We have to understand that post offices cannot always and will not always be able to accommodate all those who want to use them. It just seems to me that this is such a short-term approach, because if we have no post offices, if we have poor broadband and if we do not have mobile coverage, the digitisation method and post offices do not support all customers but support only a proportion of them. It is really important that Santander tries to explain to customers who do not have those points of access how it will still be a banking provider that those customers would want to deal with.

Protecting our high streets is also incredibly important. My high streets across Angus and in constituencies across the country are struggling very much. Post offices and banks are central to our high streets. They ensure that we have continued footfall day after day. When these sites are lost, the potential for these areas is hampered. Let us take the town of Kirriemuir in my constituency as an example. Kirriemuir was nominated in the Great British High Street Awards 2018; in my eyes, it was robbed, because it did not win. The area has a fantastic variety of high-quality local businesses that support numerous initiatives, for local residents and benefit the community. I am thinking of the efforts of the Kirriemuir and Local Business Association and Kirrie Connections. That is a high street shop, but in fact it is a dementia hub, which I visited only last week. People go there to spend time with those who are going through similar experiences to them.

I had the pleasure of being there when the judges were in Kirriemuir and looking round the town, which has so much pride in its offering. But now, it has lost its last bank. It will lose its ATMs. Businesses are forced to react because, as hon. Members have said, where will customers get their cash? Will investors be put off from coming to the town? Where will local businesses deposit their takings? When I was going round as part of small business Saturday, businesses raised with me time and again the fact that there are more card transactions because less cash is available and the fee on those card transactions is absolutely hammering them at a time when things are very difficult on our high streets. In addition, what of those constituents who want to use only cash? I understand that elderly people do not want a bank card or credit card; they want to pay only with cash. Why should we suggest that they should not be able to do so, if a bank and ATM are removed?

At a time when we should be doing everything for our high streets, we should be encouraging more footfall and not increasing the pressures, difficulties and uncertainty. One suggestion has been put forward time and again by my constituents: why cannot banks operate out of one building? Why can we not have a banking hub whereby all banks are located in one building? That means we keep a set of premises going, we keep choice for constituents and they do not have to travel as far as they might have to if a bank closed down.

[Ben Lake]

The hon. Lady makes a very important point about banking hubs. Mine is just a point of information. It is ironic that some co-located branches used to exist in my constituency in the 1970s; two or three different banks would share the same location. Perhaps it could be a case of back to the future.

[Kirstene Hair]

I thank the hon. Gentleman for his intervention, which shows that banking hubs would work. They would work in many communities. They would keep that vital place on the high street. They would keep choice and keep accessibility. Those who cannot log on online or do not want to could of course come and have a face-to-face discussion with someone in the bank. That is a really important point that we should be putting across, and I would be keen to know what my hon. Friend the Minister thinks of that proposal.

My final point is about transport, which I know other hon. Members have already discussed. Those who do not want to or cannot use phones or computers to do their banking will of course need to travel to the nearest bank branch, but customers who were using the Brechin branch will now have to travel 15 miles—it is a 30-mile round trip—to Arbroath, and those in Forfar will have to make a similar journey to get to Dundee. What about those with mobility issues? What about the elderly? What about those who do not have their own car? What about those who rely heavily on public transport links, which are also in decline? Those people have to rely more heavily on family and friends. Indeed, vulnerable groups perhaps have no choice but not getting to the bank.

It is really important that we look into all the aspects that affect our constituents. An elderly lady who came into my constituency office the other day remarked that the whole situation was crazy. I agree with her: it is far from desirable. Although I have been in this place for just over 18 months, I have always felt that the most powerful debates here are those in which we have cross-party consensus. I look forward to the Minister’s reaction on the impact that these closures will have on our high streets, on post office support—because we also see post offices in decline—and on the idea of banking hubs. We all need to work together to ensure that we soften the blow of bank closures for each and every one of our communities.