Banks and Communities

Stephen Kerr Excerpts

Thursday 11th January 2018 Westminster Hall

[Martin Whitfield (East Lothian) (Lab)]

I beg to move,

That this House has considered the role of banks and their responsibility to the communities they serve.

As always, it is a pleasure to serve under your chairmanship, Mr Gapes. I thank the Backbench Business Committee for giving us this time to discuss a profoundly important matter. I also thank all the right hon. and hon. Members across the House who have supported the debate, and I welcome the new Minister to his place.

The debate is, in part, a product of the Royal Bank of Scotland’s disappointing decision towards the end of last year to close 259 branches. Those closures will start to come into effect, and communities in my constituency will be cut adrift from the face-to-face banking that is so essential. The towns of Dunbar and North Berwick are to be hit, which have high streets with diverse mixes of independent and chain businesses. The impact has been succinctly described to me by a constituent, who said:

“Dunbar supports many small businesses, not just on the High Street. How and where will they bank their cash takings? Online banking does not work for cash. Many older people in the town are dependent on the bank local branch, especially those who have no computer, or are wary of internet banking. Dunbar whose population is rapidly expanding, and the nearest RBS branch is 12 miles away.”

All Members here may have in their constituencies banks that are closing, in some cases leaving towns with no banks at all.

[Stephen Kerr (Stirling) (Con)]

I thank the hon. Gentleman for securing this debate. It is important to note that the branch closures that he refers to are only the latest tranche of branch closures; they come on top of a series of branch closures, and that is even more devastating to what they used to call the branch network.

[Martin Whitfield]

Indeed, I will come on to the statistics about the existence of branches in the United Kingdom.

My hon. Friend the Member for Ogmore (Chris Elmore) tells me that when the branches close in his constituency towns, one town will be left with no bank and the other town with just one. That one bank will serve 58,000 people. This debate is more encompassing than just a recent set of closures. It seeks to ask a very pertinent question about the responsibility and the relationship between retail banking and the communities they should be so proud to serve.

--- Later in debate ---

[Stephen Kerr]

The hon. Gentleman made a strong point, made much stronger by the fact that we are talking about the Royal Bank of Scotland, more than 70% of which is owned by the British taxpayer, who bailed it out in the first place.

[Martin Whitfield]

Hear, hear.

Physical money is the most symbolic representation of trust, but there is strong evidence that banks want to move as quickly as possible away from the physical movement of cash on to online and electronic transfer. Any transition from face-to-face banking to online services must take place at a similar rate to a drive to remove cash from society. Significant numbers of our constituents rely on cash to facilitate their budgeting, and those who do must not be abandoned in the rush by banks to change.

Last year it was suggested that 10,000 free-to-use cashpoint machines are at risk of closure. Some 2.7 million people in the UK still rely entirely on cash. The free-to-withdraw cashpoints will vanish first from communities where the individuals who rely most on cash for budgeting are based. Additionally, among the small and medium-sized businesses that make up our high streets, the challenge of banking cash is increasing. I have examples of constituents in Prestonpans who now have to travel, sometimes by public transport, with their daily take to the nearest bank where they queue for up to 30 minutes to pay the money in.

Insurance and safety issues prevent them from storing cash on their premises, and the cost of contracting the deposit to security companies is prohibitively high. When the issue was raised with the banks, they said, “The money can be paid in at the post office,” but the post office will not take larger sums of money because it does not want to have the problem of transporting the cash either. In the constituency of my hon. Friend the Member for Bridgend (Mrs Moon), where tourism is a major industry, she has a business that banks more than £2 million a year but, following a bank closure, it has the responsibility for taking the cash elsewhere.

The closure of cash machines and the continued closure of high street branches are alienating business owners and older customers, fracturing still further their trust.

--- Later in debate ---

[Stephen Kerr (Stirling) (Con)]

It is a privilege to serve under your chairmanship, Mr Gapes. I compliment the hon. Member for East Lothian (Martin Whitfield) on obtaining the debate. It was my privilege to accompany him to the Backbench Business Committee and I was delighted when permission to hold the debate was granted.

If anyone should be aware of how important banking is to people in their daily lives, it is the banks themselves. They know that people need banking services to get paid, pay their bills, save and, usually, buy a house. They know that keeping a pile of cash under the bed is not an option in our society, so they should recognise that it is their responsibility to ensure that rural communities in particular have reasonable access to banking services. Unfortunately, as a Member who represents a largely rural constituency, I have to tell the House that many rural communities are losing that access and their connection with banking.

I am going say something now that might be seen as something of an article of apostasy in my party, because I am going to agree with the Scottish National party council leader in Stirling. He wrote to me just before Christmas making some valuable points that I can only agree with. In fact, I think I may have said them first, which justifies me in agreeing with him. He makes the point in his letter about the Royal Bank of Scotland closing its Bannockburn branch, which means there will be no banks at all there. I want to use this opportunity to commend the people of Bannockburn ward, more than 2,000 of whom signed a petition asking the Royal Bank of Scotland to review its decision. I want to make a point that is also made by the leader of Stirling council:

“This closure will have a disproportionate impact on some of our most vulnerable citizens”—

as was mentioned earlier—

“within the Bannockburn and Eastern Villages area with many reliant on high street banking.”

The letter continues:

“I have been approached by concerned constituents many who are elderly and neither have the access or ability to engage with on-line banking. Many are distrustful and indeed fearful of using the internet for such transactions.”

That point was also made by the hon. Member for East Lothian. I have also been approached by hundreds of my constituents—I do not exaggerate—who tell me that it is a fundamental act of injustice to remove the banking services from the communities that, as he said, need them most.

In my constituency, RBS plans to close three branches—in Dunblane, Bannockburn, and Bridge of Allan—leaving one RBS branch in the entire constituency. By the way, that branch is in the centre of Stirling and access to it is impossible for anyone with any form of mobility challenge. It is not the best locality—either for car parking or for getting to—for the single remaining RBS bank in my constituency. That is bad news for small businesses, which benefit from having a local branch, as the hon. Member for East Lothian explained well. It is bad news for the staff who work in the branches, and for elderly people and people who are less well off, who are less able to make the journey to a branch several towns away.

I should make it clear that the Royal Bank of Scotland is not the only offender. I should also make it clear that I used to work for RBS, when I was a callow youth, on leaving school.

[Angus Brendan MacNeil]

Last week.

[Stephen Kerr]

Thank you very much. The hon. Gentleman has become my hon. Friend suddenly.

I have a fondness and affection for the Royal Bank of Scotland. It is a grand old Scottish institution, which has been ruined by the mismanagement of the directors of a decade ago.

I ask the Minister to look at what the banks propose. They are saying, “We are going to close the branch. Go to the post office.” That is not practical.

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

My constituency faces closures in Alloa, Kinross and Comrie. In Comrie, we face exactly the issues that my hon. Friend has mentioned, with customers being referred from the bank branch, in a place where there is weak broadband, weak infrastructure and a post office in the newsagent. That is not acceptable to my constituents, and it is pathetic customer service from the Royal Bank of Scotland.

[Stephen Kerr]

The reality is that there are limitations on the amount of cash that can be taken and given out over the counter, and that must be confronted. The irony of all the closures, as has been mentioned twice in the debate, is that they affect the communities that have the weakest broadband connection. They are going to have to go digital without a broadband service. It is ridiculous and I call on the Minister to call on the Royal Bank of Scotland to conduct a proper review of and consultation on the branch closures.