NatWest: Account Terminations and Branch Closures

Lord Hacking Excerpts

Wednesday 10th January 2024 Lords Chamber

Asked by

[Lord Hacking]

To ask His Majesty’s Government what discussions they have had with NatWest, as a major shareholder, regarding the numbers of (1) payment account terminations, and (2) local branch closures, since 1 January 2023.

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, the Government’s remaining 37% shareholding in NatWest is managed at arm’s length by UK Government Investments. The Government do not intervene in the commercial decisions of NatWest, including with regard to branch closures and individual account terminations. None the less, the Government are strengthening requirements for all firms around account termination and support the FCA’s guidance on bank branch closures and industry provision of alternative in-person services such as banking hubs.

[Lord Hacking (Lab)]

I thank the Minister for her reply, but I think the matter should be a little further explored. Will she acknowledge that Which?, the trade magazine, has monitored all bank closures since 2015 and has calculated that in that period NatWest bank as a whole closed no fewer than 1,140 branches? In the same period—and more alarmingly—a total of 5,818 bank and building society closures took place. That must impact on a lot of people. Secondly, will the Minister acknowledge that NatWest and probably other banks are currently closing the accounts of innocent holders without notice and refusing to give any reasons? Again, the impact of that is a lot of distress: for example, for small traders, having their bank accounts taken away can be devastating.

[Baroness Vere of Norbiton (Con)]

If I may, I will focus on the second part of the noble Lord’s question around account termination. It is an issue that the Government take incredibly seriously. For absolute clarity, the Government are clear that payment account providers must not discriminate on the basis of political belief or, indeed, any other opinion. Therefore, following events over the summer, the Government issued a policy statement on 21 July which very clearly set out that 90 days’ notification must be given to any customer whose account is to be closed. Also, the bank must give a reason for that closure. That will come into legislation in due course. We are working at pace to draft the secondary instrument and it will be laid in your Lordships’ House soon.