RBS Rural Branch Closures

Steve Barclay Excerpts

Monday 18th December 2017 Commons Chamber

[The Economic Secretary to the Treasury (Stephen Barclay)]

I commend the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) for securing the debate. The strength of feeling generated on both sides of the House by this announcement from RBS is evident from the high attendance at a relatively late hour.

[Ian Paisley]

rose—

[Stephen Barclay]

I will happily give way, but obviously the right hon. Member for Ross, Skye and Lochaber has taken 22 minutes of a 30-minute debate, so time is somewhat limited.

[Ian Paisley]

I appreciate the fact that the Minister has given way, and he is absolutely right to focus on the interest across the House. The leader of the Scots Nats has tonight managed to unite this House—Unionist, nationalist, Conservative and Labour—on an issue that affects all our constituents, from the highlands and islands to the west of Ulster. Many banks are closing. Ulster Bank, which is of course a sister company of the Royal Bank of Scotland, is closing many branches. Is it not time for the Government to put in place a special measure to have a national review of where banks that they own—and that the taxpayer owns—are situated?

[Stephen Barclay]

The hon. Gentleman is right; this is an issue on which many Members of the House from all parties have strong feelings. Indeed, I have been lobbied extensively by many of my colleagues who are in the Chamber this night, including in particular my hon. Friends the Members for Berwickshire, Roxburgh and Selkirk (John Lamont) and for Ochil and South Perthshire (Luke Graham), who have been vociferous in speaking up for their constituents on this issue.

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

As my hon. Friend knows from our representations, we do not believe that the Royal Bank of Scotland is serving our constituents or its customers appropriately. Furthermore, the mitigating factors it is proposing, such as offering digital online services and post office services, do not work in our communities where the broadband is poor and the post offices are too small or insufficient for our local population.

[Stephen Barclay]

As a rural constituency MP, I recognise the importance of bank branches in our communities and, specifically, many of the challenges of travel in rural communities. Of course, RBS will have noted the comments about the staff impact made by the right hon. Member for Ross, Skye and Lochaber, and he will be well aware that RBS has a duty to consult its staff. I expect that it will be keen to respond to him on the specific allegation he made in the House this evening.

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

I am alarmed this evening to hear the number of staff who might be made redundant, but I am also concerned about the staff in the remaining branches. There have been six bank closures in my constituency and businesses are contacting me to say that in the local branches they are now going to they are waiting more than 30 minutes to get to the counter. Obviously, there is now a massive impact on the staff in those branches. Does the Minister share my concerns?

[Stephen Barclay]

The reality is that the picture will be more nuanced, because RBS is investing more than £8 million in its branch network this year. It is investing more than £11 million next year. Indeed, it is relevant to point out in response to the concerns raised that customers will often vote with their feet. The right hon. Member for Ross, Skye and Lochaber mentioned Kyle twice. I understand that there is a branch of Lloyds 0.05 miles from the bank that is closing there, and another branch within walking distance of the one that is closing in Aviemore, which he also mentioned.

[Douglas Ross (Moray) (Con)]

We heard earlier that the right hon. Member for Ross, Skye and Lochaber had united the House, and he has, but it would have been nice if he had taken some interventions from Conservative Members, because I think that they might have been helpful. The Minister mentioned customers voting with their feet. Does he agree that it was deplorable of RBS, when it was closing the Forres branch, to tell my constituents to go to Nairn, only for the Nairn branch to be closed by RBS a few weeks later? Surely, that is deplorable behaviour, which no one can accept.

[Stephen Barclay]

As my hon. Friend will know, the decision made by RBS was an operational decision, independent of the Government. It is the RBS board that makes the strategic and management decisions, including decisions in respect of its network. That framework has been endorsed by the Labour, Liberal Democrat and Conservative parties.

[Several hon. Members rose—]

[Stephen Barclay]

I am going to make some progress. The right hon. Member for Ross, Skye and Lochaber has left me only three more minutes in which to do so.

On 4 December, I had a conversation with the Scottish Government Minister for Business, Innovation and Energy, in which he recognised that the branch network decision had been a commercial decision. In its manifesto, written only this summer, the SNP said that RBS should be returned to the private sector and should deliver as much value as possible to the taxpayer.

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

Will the Minister give way?

[Stephen Barclay]

I will give way one last time.

[Simon Hart]

I shall be very brief. A number of Members of Parliament find it very difficult to engage with RBS and NatWest about closures when they tell us that it is all about footfall—about the number of people who go into their branches. Employees tell us one thing and the banks tell us another. Perhaps the Government would have more influence than us in establishing what the true figures are. Let them mislead Ministers publicly rather than us privately: that would be helpful to all Members.

[Stephen Barclay]

My hon. Friend refers to the true figures. The banking market is changing. As he will know, the use of cash has fallen by a fifth in the past decade. The number of branch visits has fallen by a third since 2011. More than a third of UK adults regularly use banking apps. Three fifths of customers are interacting with their current accounts via mobile apps, and more than 600,000 customers over 80 are registered with internet banking. The House must address the reality that the way people bank is changing, and that trend will accelerate as Open Banking comes on stream in January and FinTech progresses. I know from my recent visit to Edinburgh that a number of additional FinTech jobs will be created. The issue is not whether it is possible to prevent changes in the banking market, but how the impact on RBS customers can be mitigated.

As for the representations made by Members, RBS has given six months’ notice—more than the three months required by the access to banking standard—to hold discussions, in which I urge Members in all parts of the House to engage, about how facilities such as mobile banking can be used to mitigate some of the impacts. One of the key sources of mitigation is the post office network, in which the Government have invested significantly: 7,000 more branches have been modernised in the past three years alone. There are more post office branches than there are branches in the entire network of all the banks combined, and 99% of retail customers and 95% of commercial customers now have access to banking services at post offices. One form of mitigation will be for customers to vote with their feet—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Members must stop shouting. The Minister is just finishing his speech.

--- Later in debate ---

[Stephen Barclay]

I was left a bare eight minutes in which to respond, Madam Deputy Speaker, and I have been generous in taking interventions. I have very little time in which to make some final progress.

At the time of the autumn Budget, recognising the importance of this issue and the concerns expressed by Members on both sides of the House, I wrote both to the Post Office and to UK Finance, which represents banks, to further raise public awareness of the banking services offered by the Post Office and, indeed, to ensure that we receive value for money from the £2 billion that the Government will have invested in the post office network between 2011 and 2018. The Government also introduced the access to banking standard, to ensure that customers are properly notified of the alternatives that are available. It is important for us to use the time that we now have in the six months between this announcement and branch closures to ensure that customers can use other services or use post offices as an alternative.