Rural Bank Closures

Debate between Simon Hart and Lord Murphy of Torfaen

Tuesday 21st February 2012 Westminster Hall

[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.