Bank Branch Closures

Mims Davies Excerpts

Thursday 30th June 2016 Commons Chamber

[Mr David Lammy (Tottenham) (Lab)]

I congratulate my hon. Friend the Member for City of Chester (Christian Matheson) and the hon. Member for Wells (James Heappey) on securing this important debate and echo the concerns that have been raised. Looking at the evidence, it appears that the Government lack the political will to hold the banks’ feet to the fire. What happened when a review into banking culture was announced? It was quietly shelved a few months later. What happened when branches were closing down at a rate of almost two a day in rural communities and deprived areas across the UK, affecting local businesses, the elderly and the disabled? Very little indeed. And what is happening when banks renege on their promise to retain the last bank in town, meaning that 1,500 communities have lost all their banks? Absolutely nothing.

It does not strike me as fair that ordinary people are paying the price for the failure and mistakes of banking executives. Those ordinary people have been good to the banks. They have loyally paid in their savings month after month. They have taken out their mortgages with their bank. In the cases of Lloyds, Halifax, RBS and NatWest, they have bailed them out after the banks got themselves into trouble during the financial crisis. The banks have got themselves into trouble time and again, lurching from one scandal to the next, by aiding and abetting clients who want to avoid paying their taxes, fixing the LIBOR rate, money laundering, mis-selling PPI—the list goes on. Barclays, HSBC, Lloyds and RBS have been hit with fines of more than £55 billion since 2010, and that figure is set to rise to £75 billion by the end of next year, but who takes the hit? Their customers, whose views and needs are completely disregarded by the banks’ management teams.

It is not as though there is no evidence to tell the banks that their customers value their local branches and want them to remain. Research from the Competition and Markets Authority in April 2015 found that 63% of current account customers felt that having a convenient local branch was either “essential” or “very important”. Research conducted for TSB in June found that 69% of people believed it was important to have a bank branch close to where they lived. Just because more people are repaying small debts to friends or carrying out basic money management online or by using an app on their phone, that does not mean that branches are becoming redundant—far from it. The Social Market Foundation has found that, when it comes to big financial decisions such as taking out a loan or a mortgage, or seeking financial planning advice, the majority of consumers still use bank branches. In these troubled economic times, ordinary folk want to be able to go into their branch and get good advice so that they can properly plan their finances, but in towns, villages and cities across the country, that is soon going to be nigh on impossible. That is why this debate is so important.

Banks are disproportionately shutting up shop in lower income areas. Indeed, 90% of the 600 branch closures between April 2015 and April 2016 took place in areas where the median household income is below the average of £27,600 a year. Move Your Money has told me that, far from responding to demand pressures, the major UK banks are simply closing branches in poorer areas and opening or retaining them in more affluent ones. We are seeing the creation of a dual financial system in all but name, with one section for the wealthy and the middle classes, and another for those on low incomes.

The University of Nottingham has found that the least affluent third of the population has borne the brunt of two thirds of the total closures since 1995. Indeed, the rate of closures experienced in traditional manufacturing and inner-city areas is 3.5 times higher than in areas defined by academic researchers as middle England—mainly suburbs and small towns. It is therefore a cruel twist of fate that those who are most likely to be adversely affected by branch closures are the people living in those areas in which most closures are happening. Do we really want this country to become like some areas of the United States where those who are already deprived and poor are bereft of quality financial services and left to flounder? Again, that is why this debate is so important.

I know the situation to be true because earlier this year HSBC decided to close its branch on Tottenham High Road after almost 100 years. That followed the closure of a branch of Barclays the year before. In just two weeks’ time, that HSBC will close its doors for the last time. My constituents have been told to travel to Southgate if they want to access a branch, but the journey takes at least 45 minutes by bus. What is the impact of that closure on the elderly? What is the impact on the disabled, the vulnerable and local traders who rely on such branches? I am appalled that HSBC’s management did not feel it appropriate, or even a matter of common courtesy, to consult the local Member of Parliament, the local authority, councillors or the community before making that decision.

The situation is an outrage because my constituency is a target regeneration area for the Government and the Mayor. The Treasury has underwritten regeneration in Tottenham to the tune of £500 million. We have Spurs—the best premiership football club—building a new stadium in the constituency, yet the bank did not think that it was worth picking up the phone and calling the local authority leader or the local MP to say, “We are thinking about this. What do you think? What will the High Road look like in the months and years ahead?”

[Mims Davies (Eastleigh) (Con)]

The right hon. Gentleman is making an important speech about the value of banks to our communities. Barclays and HSBC have contacted me about closures in Hamble and Hedge End respectively. In my experience, there is no point hearing from them because they have already made up their mind. The situation is difficult and disappointing for my elderly, vulnerable and, perhaps, non-internet-savvy residents.

[Mr Lammy]

The hon. Lady makes an excellent point; that is also my experience.

I am talking about consultation with democratically elected people. Banks certainly ought to speak to the local authority leader before making a decision to say, “We’re thinking about it. What do you think the impact might be?” All of us, as professionals and Members of Parliament, are used to having private, confidential conversations every day of the week. We are sometimes able to say, in private, “Have you thought about this or that?” We can talk about the future economic context of a community of which the bank may not be aware. But there was none of that; I was presented with a fait accompli. Frankly, HSBC was patronising.

When I was a 16-year-old with what felt like very little prospects way back in the mid-1980s, I got a little job over the summer holidays in that local HSBC branch—it was then Midland Bank. I feel personally affronted that the bank where I saw my first prospects, and where I had put on a suit and thought that I might have serious job one day, is to be shut down without HSBC even thinking of consulting me. It meant a lot in the local community that I used to work in the bank, but HSBC was not interested. That is what big banking has come to in this country after all that we have paid in. I am frankly appalled by HSBC’s behaviour.

Given that the Government talk about being a friend of small business and the high street, it is important that they think carefully about this issue. In June 2014, research by YouGov for the British Bankers Association found that over 50% of people see a branch as important, with that figure rising to 68% for SME customers. The impact of branch closures goes far beyond local businesses having nowhere to go to get credit or to do their banking. The consequences are grave for the whole high street.

Local retailers are hit hard by the fact that customers go elsewhere when they do not have easy access to cash, which is still the preference for many, despite the rise of chip and pin and contactless payments. Cash still accounts for 46% of high street sales, with that figure rising to 75% in newsagents and convenience stores. On average, local ATMs inject some £16 per withdrawal directly into nearby stores, which amounts to £36 billion a year. More than a third of total high-street spending is contingent on the ready availability of cashpoints.

I was told by HSBC that one reason why it was closing my local branch was footfall on the high street. I pointed to the fact, which it had seemed not to realise, that we had had riots just a few years before and that we had found wonderful businesses that wanted to support the high street, not desert it, as it made its way back from the riots. Given that this bank was meant to be one of our national institutions, citing footfall as its reason was deeply painful to my constituents.

In tough times, people remember who their friends are. The banks should think carefully about their customer base and how their customers feel when banks desert a community that has already been through the mill and is trying to build its way back. I think of parts of this country that not so long ago had floods, for example. It takes a long time for a high street, a village or a town to get over a flood. Are the banks going to blame lack of footfall and say, “Things were a bit depressed for a few months so we just couldn’t stand by you. We’re disappearing”? Customers have stood by them, so it is about time that they grew some, as my mum would say, and stood by the community.

UK Economy

Mims Davies Excerpts

Wednesday 29th June 2016 Commons Chamber

[Mr Osborne]

The shadow Chancellor raised questions about monetary policy. Obviously the Bank of England is independent. The MPC set out the challenging trade- off it might face between a fall in output and a rise in inflation. We will have to wait and see how MPC responds to the judgment it has to make.

The central bank has not been undertaking quantitative easing, but the arrangements put in place by my predecessor Alistair Darling—essentially, the authorisation arrangements —remain in place. In other words, the MPC will be able to use any of the monetary policy instruments in its toolkit, but that is entirely a judgment for it. We will wait to see how it responds to the challenges it faces.

[Mims Davies (Eastleigh) (Con)]

This June, sadly, the sun is not shining, and like many MPs I have been contacted by constituents who may wish to delve into a second referendum. Democracy gives us a say, not necessarily our way. Does the Chancellor believe that even looking at a second referendum would do massive damage to our improved finances and delay and disrupt further infrastructure projects which are so vital to our communities?

[Mr Osborne]

I fought passionately to remain in the European Union, not because I was a massive fan of the EU with all its problems but because I thought it was better for Britain to be in the EU than outside it, but I absolutely accept the result of the referendum. I do not think it is credible, in the days after the result, to say, “The people got it wrong. We need to elect a new people.” In our democracy, we need to respect the result that the British people have given us and, as representatives of the population in this Parliament, our obligation is now to get on and deliver what they have asked us to deliver, to the best of our ability.

The Economy and Work

Mims Davies Excerpts

Thursday 26th May 2016 Commons Chamber

[Mims Davies (Eastleigh) (Con)]

I am pleased to be part of this debate on the final day of our consideration of the Gracious Speech—it is my second one. We are discussing vital matters focused on the economy and work. I am pleased to see action being taken on sugar levels, as tackling that issue is vital in my constituency, where diabetes and amputations stretch the NHS.

The apprenticeship levy is part of this Queen’s Speech. It will be introduced in 2017 for larger employers, and I truly welcome it. Apprenticeships are a fantastic way to help young people or to help older people to change career or re-skill. It was a real pleasure on the day of the Queen’s Speech to meet Calum from Hedge End, who is an Airbus apprentice. We are very lucky to have Eastleigh College, which puts apprenticeships at the heart of education and where Baxi supports a gas training centre—we are very short of gas engineers.

The Chancellor well knows that in Eastleigh we have B&Q, but he is also well aware that in Eastleigh we need the vital Chickenhall Lane link road. Only under this Conservative majority Government has real progress been made on bringing that forward. The link will increase productivity and reduce queues, so I am delighted to see it in the Budget book.

[Mrs Flick Drummond (Portsmouth South) (Con)]

Does my hon. Friend agree that our rail infrastructure in Hampshire has not had any investment for 60 years and that we need more investment to improve our transport, which will help productivity in both her constituency and mine?

[Mims Davies]

I absolutely agree with what my hon. Friend says. It takes an hour to get between Portsmouth and Southampton, and that situation is untenable. We need it to take an hour into Waterloo from Portsmouth. Such investment will improve travel to Southampton airport, which will also see positive benefits from the Chickenhall Lane link road. That will also deal with the standing traffic coming into the town, where air quality is a real problem. Last Friday, I met the Solent local enterprise partnership, which is keen and ready to finalise its bid and make its business case to the large local major schemes fund. I thank the Chancellor for the support for this project in Eastleigh.

I welcome the commitment to build 200,000 starter homes, and I would like women in refuges to be given higher priority on housing lists. That will achieve more safety for their children and more stability in schools, and it will improve their life chances, which is what we wish to see in this Government’s programme. In Eastleigh, we have recently seen town centre land that would have been ideal for housing given away and designated for a car showroom and two drive-throughs—this in an area where there is a problem with air quality. That is the kind of unhealthy and unwanted town centre regeneration that I am not keen to see in my constituency. I pay tribute to the local campaigners who have sought to point out the perversity of the application.

Hon. Members will not be surprised to see that I intend to discuss the ongoing lack of a local plan in Eastleigh—there are no neighbourhood plans in Eastleigh. Planning to protect green spaces and planning for more affordable homes, and more transparent planning rules are vital in Eastleigh, where there is a strategic vacuum. It is crucial that the pace of the progress that central Government are making is matched by local authorities picking up the pace and dealing with this issue. Sadly, Eastleigh Borough Council continues to fail its residents by ignoring calls for local plans. I sincerely hope that it gets on with it, for the sake of residents and businesses, and that the planning Bill can help and take full effect in our area.

I also want us to protect our green infrastructure, as it is important. We need to protect our chalk streams and areas such as the River Itchen, where one might see my hon. Friend the Member for Broxbourne (Mr Walker) fly fishing or angling alongside local anglers. It is very important to support such infrastructure and stop the pollution of vital rivers. Our Bill will promote green spaces over brownfield land, which is currently not being distributed properly in my constituency. Residents in Bishopstoke see and feel this; there is no localism in Eastleigh and no local plan.

[Maria Caulfield (Lewes) (Con)]

My hon. Friend does a tremendous job for her constituents. Does she agree that a neighbourhood plan, giving locals a referendum, is the way forward to plan for housing and infrastructure?

[Mims Davies]

Absolutely. Locking residents out of the planning process continues to make housing an adversarial issue, whereas our communities need to work together to bring forward the infrastructure that we see proposed in the Bill and the tie-in that residents need. I should thank my hon. Friend at this point. Areas such as Botley are struggling on GP recruitment because of ongoing issues with a local plan and the fact that they cannot recruit the clinicians they need. I thank her for her work in encouraging clinicians and nurses to come forward in these important careers. Getting more women into STEM subjects—science, technology, engineering and maths—and having that opportunity will help our local communities to grow and thrive.

The biggest decision of our generation will be made next month and it is clear that whatever the outcome it will have an effect on our economy. Clearly, opinions are divided, occasionally on the Benches in this Chamber and occasionally, as we see if we read The Times, in the Tea Room. But is it crucial that once we have voted we come back together—this Conservative majority Government—and unify, so that we can continue to deliver this strong economy and the services we need for all our constituents.

Oral Answers to Questions

Mims Davies Excerpts

Tuesday 19th January 2016 Commons Chamber

[Mr Osborne]

We are in discussions with the Northern Ireland Executive about what we can do to support the economy, and it is great news that we are now moving forward with the additional resources for capital investment there. Of course, one of the things that we would really like to see is the devolution of corporation tax rates, for which we have legislated, and provided that we can reach agreement on the budget implications of that measure, it would provide a massive boost for Northern Irish businesses.

[Mims Davies (Eastleigh) (Con)]

21. I welcome the Chancellor’s reduction in corporation tax, which has helped to create many jobs. Does he agree that some businesses cannot grow, despite that measure, because of local infrastructure constraints such as the one that needs addressing in my constituency at the Chickenhall Lane link road?

[Mr Osborne]

My hon. Friend is absolutely right. We are investing in transport infrastructure in the Southampton area and along the south coast, as I was just saying to my hon. Friend the Member for Havant (Mr Mak). We understand that all parts of the country can benefit from additional investment in transport infrastructure, and that is why we are increasing the transport budget even at a time when public budgets are tight. None of these things would be affordable if we crashed the economy.

Connaught Income Fund

Mims Davies Excerpts

Tuesday 12th January 2016 Commons Chamber

[Guto Bebb]

I will join the hon. Lady in that call, and I agree entirely with her comments.

On 26 May 2011, three months after the whistleblower provided evidence of wrongdoing, the FSA finally published a note on its website stating that the fund should not be compared to a bank or building society account. That was remarkable, considering it had been provided with evidence of wrongdoing. In the light of that evidence, it is difficult not to argue that a stronger warning should have been provided to investors by the FSA.

[Mims Davies (Eastleigh) (Con)]

Does my hon. Friend agree that many of our constituents have waited a long time for this investigation, despite the whistleblowers? This debate provides an excellent opportunity for us to urge the Financial Conduct Authority to set out a clear timescale. It is only right and proper that full clarity should be given to all our constituents—we can see the large number of Members present in the Chamber tonight—about the scope, nature and timing of this full and much needed investigation.

[Guto Bebb]

Absolutely. My hon. Friend has just covered part of my speech very well, and I agree entirely with her comments.

Despite the warnings, and the acknowledgment of those warnings by a note that was issued on the FSA’s website, money was still being invested in the fund for a further 10 months. That is scandalous.

The Economy

Mims Davies Excerpts

Wednesday 18th November 2015 Commons Chamber

[Mims Davies (Eastleigh) (Con)]

I am delighted to speak on the record from the Government side of the House on our growing economy. I oppose the motion.

More than 2.1 million more people are now in work, and income tax has been cut for 27 million people. Those are numbers that fall easily from the lips, but they have been much harder to achieve. In addition, 3.8 million people have been taken out of tax altogether. The state pension has been increased by £950 since 2010, and more than 120,000 families now have a home to call their own as a result of our Help to Buy scheme. Many Members have mentioned apprenticeships, and more than 2.3 million have been created since 2010. This Government have a proud record. It has been a good news story for me locally, and I congratulate Eastleigh college on its leading role in delivering those apprenticeships locally. I also want to thank all the businesses and companies that are part of the apprenticeship revolution.

In many ways, this economic revival has been hard won, against the best efforts of the Opposition to block any progress. We have cut fuel duty, and by the end of 2016 it will have remained frozen for five years. That puts more money in the motorist’s pocket for the school run and for getting to work. It is also saving our hauliers money, keeping people in jobs and keeping our economy growing.

This Government’s economic success represents the building blocks, but of course more needs to be done. We are proud of what we have achieved, but in each constituency we can all look to the extra measures and steps that we can take to move forward. Unemployment in Eastleigh is down by 199 people since this time last year and there are 45 fewer younger claimants. Those are numbers, but they are also people who now have a regular pay packet and the positivity and stability that work brings. That means a move from dependence to independence. Paying people to go away and not helping them to thrive is cruel and unacceptable. We are proud to be bringing in the national living wage, which is forecast to be more than £9 by 2020. This shows that we are the true party of the workers. It is wrong that we in Britain spend more on family benefits than do Germany, France or Sweden, with 7% of the world’s welfare spending. That needs controlling.

There are blocks on our economy that we need to address. In Eastleigh, our local council is failing to provide a local plan that would help to deliver strategic progression and economic development in our area. Instead of a strong plan for delivering houses and helping our local economy, we have been left with piecemeal, hostile planning applications. The council is not seizing the opportunities that localism has been bringing to Eastleigh and, sadly, those powerful tools are not being used. The Liberal-led local council lacks a brownfield-first focus. It also lacks a local town centre focus, and some businesses have approached me to express concern for their future.

I am looking forward to an important event in the local calendar this weekend: the switching on of the Christmas lights. The event is important in promoting local shopping and encouraging people to think local, act local and play a part in the local economy. I hope to come back with some full shopping bags.

We need to continue to push for the infrastructure projects that affect all our constituencies. This will help with our productivity. Locally, I have clogged roads and poor east-west rail links. There is also a lack of by-passes in Eastleigh. However, I am working with the local enterprise partnership and we are battling for an enterprise zone to support Eastleigh and Southampton airport and bring in much needed infrastructure. The Government also need to focus on how we can level the playing field for carers and parents who are coming back into the workplace. I have been encouraged by my meetings with Ministers to discuss that subject.

We have heard today that, without a strong economy, we will not be able to deliver the police and security services we need, or to react to the troubled times in which we find ourselves, here and abroad. There is a great need to succeed economically so that this Government can continue to do their job in keeping us safe. I conclude by saying again that I oppose the motion.