Santander Closures and Local Communities

Liz McInnes Excerpts

Thursday 14th February 2019 Westminster Hall

[Liz McInnes (Heywood and Middleton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank the Backbench Business Committee and the hon. Member for Glasgow East (David Linden) for securing this important and very relevant debate.

In my constituency of Heywood and Middleton, we have sadly been through all this before. The Heywood branch of Santander was closed in 2017 in a similar exercise to the one that we are seeing now, although at that time customers of the Heywood branch at least had the option of using the Middleton branch, and they were told that during the consultation. Now, it seems that that option is also about to go, leaving my constituency with no Santander branches whatever.

I look at Heywood town centre now and I can see how bank branch closures contribute to the decline of our town centres. In Heywood, NatWest closed its doors in 2015, Santander in 2017 and Lloyds Bank just recently, in January this year. The town centre is in decline, with many shops and small businesses closing. I am not laying the blame for that solely at the doors of Santander—obviously there are many other contributory factors—but I do think that the big banks need to acknowledge their community responsibilities. When they close a branch, they cut footfall, reduce access for elderly and disabled customers, and cause problems for small businesses in the area. Each branch closure chips away at our once thriving town centres.

In my constituency, the Rochdale Development Agency is currently making plans for Heywood town centre, deciding whether it should be residential, retail, or a mix, and it is in the council’s capital programme for the next financial year. It is vital that we regenerate our town centre and I hope that we can achieve this. I do not want the same thing to happen in Middleton, but the closure in July this year of the Middleton branch of Santander has been announced.

The announcement was accompanied by helpful advice on nearby branches, all of them more than a three-mile bus ride away, plus the information that banking could be done at Middleton post office. The powers that be at Santander seem oblivious to the fact that Middleton post office, in its turn, is being franchised into WHSmith in the town, with an expected reduction in service, as well as problems with accessibility for elderly and disabled customers. One of my constituents, Karen Dicken, tells me that once the post office has moved, she will no longer have access to post office services, as she cannot get her mobility scooter into WHSmith. Yet Santander appears to think that offering banking services via a Crown post office that is soon to be relocated is adequate. Clearly there are failings here on the Government side, as highlighted by their refusal to perform an equality impact assessment on the franchising of the Crown post office, but I find it staggering that Santander is so blithely unaware of what else is going on in Middleton town centre that it honestly thinks that offering post office banking services in the town is a viable proposition.

Santander UK is a member of the British Bankers’ Association and is a signatory to the access to banking protocol, which was introduced in May 2015. The protocol states that it is

“an industry-wide initiative, which aims to ensure that where banks close branches they do so responsibly and with consideration of the impact on customers and local communities.”

Santander says,

“we do not take the decision to close any branch lightly”,

yet it seems to me that this decision has been taken lightly, judging by the lack of attention to local issues, such as the impending closure and relocation of the Crown post office in my constituency.

I urge Santander to think again. I also urge my constituents to respond to the consultation. When the Heywood branch closure was announced, only six letters were submitted from constituents, with one more letter submitted from me. However, I have had a complaint from a constituent, who said that she has responded to the consultation and has simply been sent a repeat of what was already stated in the initial letter. She thinks it is a fait accompli. She says that she will move her account to a bank that does have a branch in the town.

Notwithstanding that, I urge all my Middleton constituents who want their town centre to continue to thrive to get their comments in now. I have also launched a petition to save Middleton’s Crown post office from back-door privatisation, which has attracted over 1,000 signatures, and I will present it to Parliament in due course. I do not want to be here in another two years’ time talking about the decline in Middleton town centre, and I urge Santander to fulfil its responsibilities under the access to banking protocol.

--- Later in debate ---

[John Glen]

I am very happy to look into that. On access to cash machines, as I mentioned in the Adjournment debate last Thursday, we set up the payment systems regulator, which is responsible for overseeing payment systems. The regulator is closely monitoring the situation with LINK and the commitments it has made to maintain the spread of ATMs across the UK. I recognise that the pressure on that network is growing. However, I need to reflect on the relationship with the Post Office rather than trying to answer the hon. Gentleman’s question now.

I am going to make some progress, because I need to leave time for the hon. Member for Glasgow East to respond. Given unparalleled consumer change, the banks have adapted to keep competitive, including by taking some of the decisions we have discussed. That has meant investing unprecedented amounts in digital development, financial capability and tailored support for vulnerable consumers so banking is more personalised, on-demand and flexible, which many people expect in the modern world.

Let me address the impact on the franchising of Crown post offices, which a number of Members raised. Prior to finalising its plans for franchising, the Post Office runs local consultations to engage the local community and help shape its plans. That is in line with its code of practice and has been agreed with Citizens Advice. Indeed, Citizens Advice reported that the Post Office’s consultation process is increasingly effective, with improvements agreed in most cases, demonstrating its willingness to listen to the community.

The Government acknowledge that the post office plays an important part in the lives of customers, and accessibility of post office services is a key Government priority. That is why we have set specific access criteria, requiring 99% of the UK population to be within 3 miles of their nearest post office. Despite the point made by the hon. Member for Heywood and Middleton (Liz McInnes) that legislation does not impose a specific requirement for Post Office Ltd to undertake an equality impact assessment, the Post Office considers the impact of proposed changes to the network on its customers, and the Post Office and all its franchise partners, including WHSmith, are subject to all relevant accessibility legislation.

[Liz McInnes]

Will the Minister give way?

[John Glen]

I am not going to take any more interventions, because I only have four more minutes.

[Liz McInnes]

I just want to raise the issue of disabled access, which would be covered by an impact assessment.

[John Glen]

I will take that matter away and respond to the hon. Lady by letter.

The Government recognise that there are people who are struggling to adapt to new ways of banking or just prefer to carry out their banking in a more traditional way, over the counter. Members made powerful representations on behalf of constituents who find the closure of their local branch an inconvenience at best and a severe obstacle to their daily business at worst, so I want to take the time to reassure them that there is support available to minimise the impact and disruption of those changes.

I recognise the points made by the hon. Member for Ealing Central and Acton (Dr Huq), the hon. Member for Argyll and Bute (Brendan O’Hara) and others about the access to banking standard, which I mentioned in a previous debate. The access to banking standard is an important tool for ensuring that customers feel informed and supported when a branch closes, and all major high street banks are subject to it. It is my view that Santander adhered to the letter and the spirit of the standard when providing support to customers. I cannot account for every individual branch, but I am sure Members will be able to take that up with Santander, who were here to hear their representations.

I recognise that it is important that the standard is adhered to in both letter and spirit, and that support is given, but the Post Office’s commercial agreement with 28 high street banks and building societies enables 99% of personal banking customers and 95% of small business banking customers to carry out their everyday banking at one of the Post Office’s 11,500 branches, which provide an excellent alternative to a bank branch. Everyday essential banking services, such as cash withdrawals and deposits, cheque deposits and balance checking, are all available in every Post Office branch, including those located in retail facilities. Since 2010, the Government have invested close to £2 billion in the Post Office, and we have provided an additional £370 million from April last year until March 2021 to ensure the network can continue to modernise and maintain suitable coverage across the UK. That has meant post office numbers have been at their most stable in decades.

This issue is not just about individual customers; it is about businesses, too. Santander has long had an arrangement with the Post Office for its business customers, who currently cannot deposit cash at a Santander branch and must use the post office instead. Indeed, a third of SMEs visit post offices every week, highlighting the Post Office’s value for business banking. The Government believe that too few customers know about those excellent services, so, at my predecessor’s request, UK Finance and the Post Office worked together to launch an action plan to raise awareness of Post Office banking services. I encourage every Member to support their local post office and make their constituents aware of those banking services.

I also hear Members’ concern about the depletion of the high street. That is why, in the last Budget, the Government introduced a £675 million future high streets fund—not another review but a fund—that seeks to make high streets and town centres fit for the future. Alongside that, we are helping smaller retailers by cutting their business rates by a third for two years from April 2019.

I am conscious of the time, so I thank all Members for taking the time to speak in the debate on behalf of their constituents and local communities. I fully respect the fact that bank branch closures are a symptom of wider changes in our economy. It is important that, in response to those changes, we strike the right balance between promoting a dynamic and competitive financial services sector and ensuring that customers are treated fairly. I take my responsibility for supporting the development of alternatives to banks across the United Kingdom very seriously.