Santander Closures and Local Communities

Debate between Luke Graham and Luke Pollard

Thursday 14th February 2019 Westminster Hall

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

It is a pleasure to speak in this debate, Mr Rosindell. I congratulate my fellow Instagram lover, the hon. Member for Glasgow East (David Linden), on securing this debate. We have more in common that just posting fun pictures.

Banks are a really important part of our communities. When they close they leave a hole not only in our high street, but in our community as well. The reasons for that have been stated to a considerable extend in this debate already. I am deeply concerned about Santander’s decision to close branches at the scale proposed. In the area that I represent, it intends to close the New George Street branch on 5 December this year, which is quite some Christmas present for local customers, and it is not good for the staff who will lose their jobs just before the festive season.

In Plymouth we like to think that we have a special connection with Santander because we are one of only two places in the country where you can actually get a ferry to Santander, so to see the closure of branches in Plymouth is deeply worrying, and what that means has not been lost on the good folk of Plymouth.

Who do we need to aim this debate at? The remarks made by Members of all parties have been focused on the banks, but I want to focus on the Government, because the banks have had a good kicking already and certainly my fellow Devon MP, the hon. Member for Tiverton and Honiton (Neil Parish), did a very good job of explaining why banks deserve a good kicking at times. However, we need to be cautious about what can be done to reverse the decline in branches on our high streets.

We need to make sure that people can access the services they need and that the personal touch is there, but I believe that there is something missing from this debate so far: consideration of the social purpose of banking. Banking has a financial purpose: it enables us to trade, to borrow, to invest, to save, but the social purpose is also important. It is about pooling risk, coming together, having access and being able to speak to someone to get advice on borrowing, investment and saving, and making sure we get the best financial products, but all that diminishes hugely when branches close.

I am a big fan of online banking and challenger banks. I really like my hot coral Monzo card. I like the way that I can access financial services online and in many cases get a better and faster service than I can get elsewhere—but I am not the same as everyone. We need a market within our financial services that recognises that online banking and quick dynamic services in the modern age need to sit alongside traditional high street banking that is fit for purpose. There is no better example of that than on Mutley Plain in Plymouth. I use Mutley Plain as an example because I know that the Minister was a Conservative candidate in Plymouth before he found his current seat, so he will know Mutley Plain well. When he was a candidate, Mutley Plain was full of banks. It now has hardly any banks. We have seen HSBC, Halifax, Lloyds, Barclays and NatWest all leave Mutley Plain, effectively leaving the entire community without banking services.

Not only has the community been left without the ability to access a cash machine or to get advice, but people have been left without the ability to go in and speak to someone. That is why we need to look at the importance of local banks and local services. The banks need to rediscover their social purpose. It is not sufficient to have social purpose in PR and marketing if it does not extend from the communications department through to the boardroom and the branches themselves.

[Luke Graham (Ochil and South Perthshire) (Con)]

The hon. Gentleman is making a poignant and strong speech. I could not agree with him more about spending corporate social responsibility funds to support the communities and customers that the banks are meant to serve. Does he agree with me that they should spend less money on fancy advertising and sports sponsorship and more money on keeping branches open in rural and deprived urban areas?

[Luke Pollard]

I am grateful for that intervention. We should ask the Minister to look at that suggestion. The Government have the power of regulation in legislation, but they also have strong soft power in terms of encouraging the banks to do the right thing. We need to recognise that customers—each of us as a customer of a bank and the people we represent—also have soft power in relation to where we choose to bank and who we choose to bank with.

When we talk about what options are available to us, it is important to recognise that the post office is an option only when we have a post office. Equally, internet banking is only an option when someone has access to the internet. There is sometimes an assumption in this place that everyone has access to the internet. That is not true. In places such as Plymouth, where we have high levels of poverty and deprivation, not everyone has access to the internet. Not everyone has a mobile phone with data allowance that allows them to access data. With the closure of libraries in recent years, free access provision through library services is also not always available. If the Post Office network and the library network is to be a genuine and meaningful alternative, we need to make sure that they can be accessed. We must not fall into the middle-class trap of thinking that everyone has the same as the people who largely populate the House of Commons. That is certainly not true in Plymouth and it is a point that we need to address.

I asked people on my Facebook page a few days ago about their experiences of banks closing. The most powerful testimonies come from people with disabilities, for whom the ability to access a local banking service is not just about the service they should have as a normal human being, but is about the additional support that they need and deserve to access those services, which cannot be provided by someone at the end of the phone or a few clicks away on the internet. They need a real human being to interact with. That was the case for so many people who spoke to me and gave me their stories and views about what we need to do. I turn back to the Minister. Where do we go from here?

There is a real risk that whole communities will lose access to banking services, because banks are closing progressively. Today’s debate is about the decisions of Santander. A few months ago, it might have been about other banks, and in a few months’ time, it will probably be about other financial service providers. What is the safety net? What is the minimum guarantee that the Government believe that we should have?

The idea about banking hubs is a good one. In Plymouth, we are doing something similar in bringing together health and wellbeing services. City centre hubs will bring together all the aspects of the public estate that need a front door in the city centre, and I hope the Department of Health and Social Care will fund that. The principle applies to financial services, just as it does to dentistry, GP services, sexual health and mental health provision, and we should look at that.

One element of hub services is about using empty buildings. My hon. Friend the Member for Ynys Môn (Albert Owen) talked about empty buildings. In many cases, the buildings left vacant by banks still have an ongoing lease—they are still paying for the lease of the buildings. There should be questions about the social purpose of an empty building, and about how we as parliamentarians can put pressure on, as we have done on empty homes, to rediscover the social purpose of empty buildings with an ongoing lease.

The post office network has been mentioned, which reminded me of a visit I made to the Efford Road post office in Compton ward in my constituency, just before Christmas. I spoke to Michael Zheng, the postmaster of that small but well-loved post office. He described how since the banks have closed locally, he has taken on the financial transactions for local shops and has huge amounts of cash deposited with him, but the contract for local post offices for processing cash transactions has changed recently, which means that in many cases it is not viable for him as an employer to pay someone to spend the time processing the cash in and out and providing banking services for local businesses; the agreement between his local business and the Post Office no longer makes that worthwhile. That needs to be looked at.

The health of our high street depends not only on shops where people want to spend their money, banks where they can access their money, borrow and save, a culture where people can enjoy shops, and restaurants where they can eat and drink. We need to look at how we repurpose the high street in those terms, but there are also regulatory protections that deserve consideration. We are not in a normal time for Conservative party thinking in respect of allowing the free market to do its thing on high streets, where financial services can come and go as they please. We are now seeing the forced financial exclusion of people in our communities because banks are exiting our high streets. That demands a different approach, which we need to identify before we get to the point where we have lost banks entirely from our high streets.

There are alternatives and there are models of investment in our high streets. I mention in particular South West Mutual, a co-operative that has formed in the four counties of the far south-west to provide high-street banking services on a mutual model. As the big multinational banking giants are exiting our high streets, in many cases, it is the small mutuals—the people with social purpose—that are coming to replace them. I commend the work that South West Mutual is doing. I love it when it says:

“We believe that bank managers who know their communities well make the best lending decisions, and we are committed to providing branch facilities so that you can choose how you want to bank.”

That is precisely the type of ethos we need to see lived and breathed by those big financial giants, not just the mutuals. If we keep seeing TV adverts from big banks telling us just how much they care about us and our communities at the same time as they close our banks, more people will take their custom away from those banks, and rightly so. We deserve better, they deserve better, and our high streets and our communities deserve better than the high PR spend trying to tell us something different from the lived experience of far too many people in our communities.