Rural Bank Closures

Simon Hart Excerpts

Tuesday 21st February 2012 Westminster Hall

[Roger Williams]

I believe that the Government have a role to play, and such a summit may be the way forward. We could also support trials of community banks in which a number of different banks come together to provide banking facilities, thereby cutting costs for individual banks but maintaining a facility for the community.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Should we not be a little careful about taking this issue out on the banks that are still in rural areas? We should be going after those banks that were first or second to leave an area, not those that have stuck it for as long as they have.

[Roger Williams]

My hon. Friend makes a good point, but the responsibility lies with all the banks. They have got to come together a find a way of addressing the problem.

--- Later in debate ---

[Roger Williams]

I thank the hon. Gentleman, who raises an important point. Information provided to me indicates that two thirds of customers between the ages of 25 and 45 will use internet banking facilities, while only a third of people over 65 have the aptitude to take advantage of such opportunities.

[Simon Hart]

That is one issue, but does my hon. Friend agree that another is whether people have the broadband access in the first place to enable to make use of these things?

--- Later in debate ---

[Paul Murphy (Torfaen) (Lab)]

I congratulate the hon. Member for Brecon and Radnorshire (Roger Williams) on bringing this issue to the attention of the House. He has served his constituency with great sincerity for many years. When I was Welsh Secretary, he and I visited many parts of it, and I know he has raised this issue because he feels deeply about it, particularly as far as Presteigne is concerned.

I want to talk about another bank closure. Again, it involves HSBC, but this time it is in my constituency—in Blaenavon, in my valley. Blaenavon, a Welsh mining valley, has the characteristics of a rural area, in the sense that it is geographically isolated, its population is about 5,000 or 6,000, and it is part of the Brecon Beacons national park. It now has only one bank, HSBC, because the others have closed.

The decision to close the bank has caused enormous difficulty and distress among the people of Blaenavon. The town council and I have met the Assembly Member—Lynne Neagle—and bank officials. Hundreds of people attended a public meeting; it is very unusual these days for people to turn up to a public meeting to support banks, but these people did. There has also been a large petition. It therefore means a great deal to the people of Blaenavon that the bank is about to close.

The hon. Gentleman referred to HSBC as the world’s local bank; I was recently attracted by a newspaper headline, “HSBC banks on going deeper into rural areas”, until I discovered that the newspaper concerned was the Shanghai Daily. The article, which was from 2009, said:

“HSBC said…it has opened two more rural banks in China as it seeks to penetrate deeper into the rural financing industry in the country.”

It also said the bank

“is committed to bringing our global rural finance expertise into China’s countryside to help develop a sustainable model of finance and to contribute to the local economy”.

So HSBC is opening banks in China and closing them in Wales and the rest of the United Kingdom.

I understand the point made by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who said that it is perhaps hard to castigate the last bank remaining in a town. Nevertheless, when it has gone, the effect on local communities can be quite devastating because those communities often have lots of older people. In addition, local industry and small and medium-sized businesses rely on the banks. There is also the fact that communities are isolated and that many older people do not have their own transport. In Blaenavon’s case, there is the added issue that the town is a world heritage site, with lots of tourists from across the world coming to visit, but there is no longer a bank. The issue is therefore of great concern.

Today’s debate must concentrate not only on saying that the banks must be much more responsible in looking after rural areas, but on what can be done. The hon. Member for Brecon and Radnorshire made some suggestions, as have my hon. Friends. I want to make one or two points, which I hope the Minister and my hon. Friend the Member for Chesterfield (Toby Perkins), who speaks for the Opposition, will refer to when they wind up.

Clearly, the most important point is that if the bank goes, a cash point should remain, because it is hugely difficult to obtain money in a small town if the cash point disappears. If possible, there should also be some form of deposit facility so that people can deposit their money in a machine.

The issue of internet and telephone banking is also important. As the hon. Member for Brecon and Radnorshire said, however, the number of people over 65 who attempt to use such facilities is small. Clearly, there is a job of work to be done by the banks in trying, when they close, to train or teach their customers to use the telephone and internet banking facilities that many other people use. I pressed HSBC to hold seminars in Blaenavon to show people that.

[Simon Hart]

I am sorry to intervene so often. Does the right hon. Gentleman agree that we might want cash points that do not charge people to take their own money out—in other words, not LINK cash points, which cost about £2.50 every time someone sticks their card in?

[Paul Murphy]

Indeed. That is very important; particularly for older people, being charged to take out money is an extra burden.

The Post Office basic bank accounts are useful. People may be able to carry out their transactions through the post office. Credit unions, which were raised earlier, are also important. However, the sharing of facilities between banks needs to be explored. Another intriguing issue is mobile banking. In Ogmore Vale in south Wales, for example, HSBC and, I think, the Royal Bank of Scotland together initiated a mobile banking scheme for the area. It is like a mobile library, and it goes around villages and towns, providing facilities and the opportunity to use the banks.

It strikes me that the Government—both the United Kingdom Government and the Welsh Government—need to be able to come up with imaginative ideas. When it is known that the last bank in a town in a rural area is going to disappear, there should be some sort of action plan. Either the local authority or the Welsh or United Kingdom Government should be able to consider the alternatives for the town, and the possibilities that I have outlined. Often people’s fear is the worst thing. They need reassurance that some sort of facility can be provided in the community, through the exercise of more imagination.

My hon. Friend the Member for Harrow West (Mr Thomas) referred to a summit. That is an important suggestion; the representatives of banks and Government could sit round a table and perhaps come up with ideas for action plans for towns and large villages that are losing their banking facilities.

I congratulate the hon. Member for Brecon and Radnorshire once more on raising the issue, which is hugely important and affects all our constituents, crossing the party political boundaries of the House of Commons. I hope that the Minister will come up with ideas to alleviate the problems of our communities.

--- Later in debate ---

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Like my hon. Friend the Member for Montgomeryshire (Glyn Davies), I had not intended to contribute to this debate, but it has thrown up many useful points and I want to expand on just one of them: the notion of a summit on banking closures. I hope that the Minister might be able to respond favourably in that regard.

A number of hon. Members have mentioned the social impact of bank closures in their areas. However, as part of any banking summit, should we not go down the road that my hon. Friend has hinted at and contextualise the issue and consider the impact on rural communities of the closures of pubs, petrol stations—an issue that no one has mentioned so far, but that has a profound effect—post offices, as we have just heard, and schools, alongside the closure of banks and other services? I say that because in the past there was such a thing as the rural advocate. The Minister will be familiar with the rural advocate, whose job was to rural-proof Government decisions so that, where there might be a disproportionate impact on rural areas, that factor would be taken into account. I fully understand that there was a need to reorganise things, if I can put it that way, within the Department for Environment, Food and Rural Affairs, which I think was the Department that the rural advocate was responsible to, although they might even have been responsible to No. 10. However, that does not mean that the role that the rural advocate undertook is not as important today as it was in the past.

[Chris Ruane]

I thank the hon. Gentleman for giving way, especially as I had babbled on for 10 minutes before him. Regarding the loss of those facilities—the pubs, schools, post offices, banks and petrol stations—within rural communities, does he think that there is an onus on those communities to accept more housing and not to lump all future housing developments in urban areas? I represent an urban area and a rural area, and as we look at housing development over the next 10 years, the feeling is that all the houses should go to the urban areas to preserve our rural areas. But each community should expect to have a 10% increase in housing, with social housing, so that there is mixed tenureship, and family housing, so that communities can keep the schools, pubs and post offices open, because people are living in them.

[Simon Hart]

The hon. Gentleman tempts me to engage in a debate about affordable housing and rural areas, and I am not sure that the Chairman would forgive us if we were to do so this late in the day. Perhaps we can have that conversation over a cup of tea after the debate, if he does not mind my putting it that way.

In an earlier intervention, I mentioned the irritation that I experience at being charged exorbitant sums to take my own money out of certain cash machines, but there is another element to the availability of cash that I did not refer to: cash-in as opposed to cash-out. The right hon. Member for Torfaen (Paul Murphy) may have mentioned this point already, but rural areas survive—survive a lot, in the case of my constituency of Carmarthen West and South Pembrokeshire—on tourism-related events and tourism-related industries, which often involve people who carry substantial amounts of cash. When there is a fundraising event in a local area, or indeed a busy weekend in general, the need to get any cash that is made into somewhere that is reasonably safe reasonably quickly goes to the heart of the social responsibility that the hon. Member for Vale of Clwyd (Chris Ruane) referred to. We must bear in mind that there is a proper need—not just a desire to be treated differently—to get that money into places where it is safe, as soon as it is possible to do so.

On the topic of a summit, as yet no one has mentioned the requirement for banks in the rural areas that we are talking about to address—again and again—lending. We all know, and indeed we have heard today, that there are very responsible staff and managers of local banks, but they have their hands, feet and everything else bound by central office lending guidelines. To me, it is one thing to debate the availability of banks on the high street for our rural communities, but let us also get those banks lending. I suspect that the guidelines for such lending no longer lie with the bank manager in Narberth, Whitland, St Clears or wherever it might be. I have here an e-mail from NatWest that is about the closure of the NatWest branch at Whitland in my area, but it comes kindly from the Royal Bank of Scotland at 280 Bishopsgate, which I suspect is where most of the decisions are made with regard to rural banking. Therefore, I say to the Minister that if we are to have a banking summit, let us also deal with lending to some of the small and medium-sized enterprises in rural areas.

I also want to talk about high street prosperity. We had a debate in the main Chamber the other day about the Portas report, the Government’s warm recognition of its recommendations and how we can regenerate one or two of our ailing high streets as a consequence of the advice that the Government has received from Mary Portas. Of course, within all that discussion, there is a need for a vibrant high street banking facility. Such a facility is one of the vital pieces of the economic jigsaw in our rural market towns, and no jigsaw works if a vital piece is missing. So we cannot accept the Portas report and then say, “But not banking.” We have to accept high street banking as part of that package, and as I have already said, I hope that—as part of the proposed banking summit or even perhaps as part of the Minister’s summing-up of this debate—reference can be made to that issue.

Sharing facilities was mentioned earlier by hon. Members from all parties, and it is an extremely helpful development. Mobile facilities have worked in one or two rural areas, as far as post offices are concerned. Having referred to the e-mail that I received from NatWest, I must say that NatWest has been helpful in our area by

“working closely with the Post Office to make changes to its IT systems to enable customers to use the Post Office branch network”,

as its e-mail sets out. That is a positive development in terms of shared working, which I commend NatWest bank for making.

Finally, my hon. Friend the Member for Suffolk Coastal (Dr Coffey) made the point about a possible investigation into rural bank closures by the Office of Fair Trading. It would be helpful if the Minister leaned in the direction of working with the Welsh Assembly Government—or the Welsh Government, as they now like to be called—with regard to making a proper team effort to address the impositions put upon rural communities as a consequence not only of bank closures but other closures of facilities. Rural communities do not want special treatment, but they want to be able to function on equal terms with the rest of the UK.