Bank Branch Closures

Susan Elan Jones Excerpts

Thursday 30th June 2016 Commons Chamber

[Susan Elan Jones (Clwyd South) (Lab)]

It is a great pleasure to take part in this debate and to follow the hon. Member for Brecon and Radnorshire (Chris Davies), my next-door-but-one neighbour although 65 or 70 miles away. I congratulate my hon. Friend the Member for City of Chester (Christian Matheson) and the hon. Members for Wells (James Heappey) and for Ceredigion (Mr Williams) on securing the debate.

I would like to begin with a totally nonsensical hypothesis, because I feel that after last week’s Brexit vote there is probably no hypothesis that is too nonsensical to contemplate. Let me suggest that a law was passed in this place which decreed that no community with fewer than 15,000 people should be allowed to have a retail outlet—not a single shop. People in communities of 15,000 people or fewer would complain and say that that was ludicrous. The people responsible for the law would then say, “We have thought of a workable compromise. Perhaps there could be a little vending machine with milk, bread, chocolate bars and fruit—let’s call it an ATM, for the sake of convenience. One might have to pay a little more for the privilege, but let us do that and then people in communities of 15,000 or fewer will nod their heads in gratitude and acknowledge that that is what the world is like now.”

Of course, that is absolute nonsense. We are not necessarily talking about a world where shops in small or medium-sized communities are closing, but that is exactly what is happening in the ecology of our banking sector. The survey reported by Reuters showed that HSBC, RBS, Barclays and Lloyds Banking Group are among the banks that have cut 600 branches between April 2015 and April 2016. Indeed, the hon. Member for Wells has said that 333 branches have been cut just this year.

My constituency provides an exact example of the crisis we face. The constituency of Clwyd South, which covers 240 square miles, has lost eight bank branches since 2010. The town of Corwen, Llangollen and north Wales’s largest village, Rhosllannerchrugog, which has almost 10,000 inhabitants, as well as the industrial village of Cefn Mawr and the towns of Chirk and Ruabon, have all lost bank branches—the last two just this April. In fact, my 240-square-mile constituency has precisely one bank left, in the town of Llangollen. The eight banks that have closed were run by either HSBC or NatWest, and it is only Barclays that has a single bank branch left. That is the scale of the crisis, and it is causing many practical difficulties.

Colleagues have raised the issues affecting many elderly people. When I contacted HSBC at the start of the year about the plight of elderly people as a result of bank branch closures in Chirk and Ruabon, I was intrigued by the response I received from Jonathan Byrne, regional director of the HSBC central region:

“I’m disappointed that the closure of these branches will affect elderly customers within your community. We are conscious of the impact a branch closure can have on our customers, in particular the elderly and those with mobility issues.”

Oh dear, is that the best they can do? I posed questions to him in writing about the bank branches that were closing: how many people used them; how much was held on their accounts; and if a bank branch had to close, would it be possible for us to keep one open? But, silly me, I had not realised that all that information was totally “commercially sensitive.” I was not asking for a list of how much everybody in the area had in their bank accounts, although I dare say that some of us might have found that quite interesting to read. I just wanted to know how much was being held in the accounts and how many people used the bank branches. This is a great crisis that affects—in particular but not exclusively—rural areas and small towns. As colleagues have said, its effect on businesses is a massive problem.

It is possible to open individual personal accounts with the Post Office, but, where there are post offices, there are huge variations in the financial services that they provide. We need to remember that. As the hon. Member for Wells and my hon. Friend the Member for City of Chester have said, business banking services vary hugely from branch to branch as well. I think we need a big sort-out. If we do not have something of the sort—call it a protocol or call it something else—we will be in an even greater crisis.

I turn to the points that several hon. Members and hon. Friends have made about ATMs. The way in which we are pricing people out—often, but not always, in poorer and more remote communities—is nonsense. It is nonsense that anyone should have to pay money to receive money from their bank account. That needs serious looking at.

The beautiful town of Corwen is in my constituency. You are nodding, Mr Deputy Speaker; I think you have been there. I am not sure whether you have been on the steam train—the heritage railway—that runs through tremendous places in the Dee Valley area of outstanding natural beauty. What a shame it would be if you arrived there one Saturday morning and found that the ATM had run out of money. That would reduce your enjoyment of that beautiful area, as it does that of so many other people when it happens. This affects not only tourists, important though they are, but people who live miles and miles away from the next ATM. It is not that we have more snow, ice or bad weather than anywhere else, but in the winter there are problems in that regard.

Many of us are trying to propose solutions to these problems. My hon. Friend the Member for City of Chester mentioned a good idea about community bank hubs in various areas, and he offered Chester as a pilot area. I suggest that it might be nice to have a pilot across the border as well, and then we could compare notes. I would like to offer a suggestion about how we use mobile banks. The idea that a mobile bank will come into a community for an hour a week is not good enough. We are not talking about an ice cream van; we are talking about basic access to finance. Some banks—I believe HSBC is one—do not even provide mobile banks. When mobile banks operate in my area, they tend to be run by NatWest. They do not provide the full range of banking services that ordinary bank branches have.

The Government should look at whether there should be statutory requirements covering access to finance in our communities. I am not suggesting that every bank that has ever closed its doors should reopen or that banks should all have to provide mobile services, so that we might have three mobile banks standing next to each other on the high street twice a week. I am suggesting that we think about what we consider to be a basic, minimum service for banking. Perhaps we should look at some of the supermarkets and stores that now offer banking and ask how we can bring them into the equation.

One thing I know is that we cannot allow the current situation to continue. In my constituency, eight banks have closed in six years and only one bank is left. The same thing is happening the length and breadth of our country. It is not fair on rural communities and it is not fair on small towns. It is not even fair when it happens in urban, built-up areas. I urge the Minister and the shadow Chancellor to consider these matters as they respond, because they are crucial for all our communities.

--- Later in debate ---

[Chris Evans (Islwyn) (Lab/Co-op)]

It is a pleasure to follow the hon. Member for East Lothian (George Kerevan). I hope that Mr Ross McEwan meets him really soon because I can see the hon. Gentleman’s passion on this issue. I pay tribute to my hon. Friend the Member for City of Chester (Christian Matheson). I know how deeply he feels about this issue and how he has been campaigning for this debate through the Backbench Business Committee. I am pleased that his campaigning has come to fruition. It would be remiss of me not to mention the hon. Member for Wells (James Heappey).

We found out today that the hon. Member for Ceredigion (Mr Williams) is lucky enough to have access to a train, a bus and a car. He represents a beautiful part of Wales and I always like hearing him talk about places in his constituency because that reminds me of my childhood holidays and good memories come flooding back. I also pay tribute to my hon. Friend the Member for Ynys Môn (Albert Owen), who has again shown his passion and devotion to his island constituency. His fantastic speech was one of the best that we have heard in the Chamber for a long time and I thank him for it. It would also be remiss of me not to mention another Welsh colleague, my hon. Friend the Member for Clwyd West—

[Susan Elan Jones]

Clwyd South.

[Chris Evans]

I promised my hon. Friend before I stood up to speak that I would not say “Clwyd West”, but I knew I would get it wrong. My hon. Friend the Member for Clwyd South (Susan Elan Jones) has been a good friend for a number of years. Like my hon. Friend the Member for Ynys Môn, she cares about these issues. I thank her for her passion and for the strength that she has shown, especially this week, given the difficult circumstances.

Sadly, the debate has come at a bad time for me. Only last night I received the terrible news that yet another bank—Lloyds in Newbridge, a town in my constituency—is to close in October. That follows the closure earlier this month of HSBC in Risca, another town in my constituency. Sadly, such closures are not unique to my constituency. They are widespread throughout the whole country, and some sections of society are experiencing a considerable loss. The BBC reported in May that between April 2015 and April 2016, more than 600 bank branches were closed across the UK. More have closed since, including that HSBC branch in Risca, and soon there will be that closure in Newbridge and others across south-east Wales.

Local residents are being given the usual reason by their bank, namely that more customers are turning towards online banking and footfall at branches is falling. It is hard to deny that online and telephone banking are on the rise. Although I use bank branches from time to time, my own daily banking needs are usually met over the phone or through an app. This trend is underlined by Barclays, which says that on average its customers use mobile banking more than 28 times a month, but visit their local branch less than twice in that time. The banks say that it therefore makes commercial sense to close branches that are expensive and not being utilised enough to justify their cost. When I worked in banking in the early part of the 21st century, I noticed that footfall was going down, but the banks were not really very nice places because we would have a customer’s arm up behind their back trying to sell them as much as we could as soon as they walked through the door.

If we look only at statistics and reduce customers to numbers on a graph or spreadsheet, saying that they are only one of a minority who do not use online or telephone banking, we ignore the cost and the burden that closures place on the individuals who are left out. When we dig a little deeper to see who exactly loses out the most from the closure of a bank branch, it is almost always the most vulnerable in the community. I have spoken in the House about the perils of payday lending, legal loan sharks and doorstep lenders. If someone needs a loan, they will trust the person at the door if there is no bank at the end of the road to meet their borrowing needs. That is the danger. When a bank closes a branch, that person, who is usually unbanked, becomes even more vulnerable than they already are.

I have to make an example of HSBC and the branch closure in Risca. When I launched an online petition, which was signed by hundreds of residents, some of the comments truly summed up the problem with branch closures. One constituent said:

“My parents use this bank. If this branch closes they will not have a branch within a 5-mile radius. The nearest branch will be at least 30 minutes away by bus. Both of them are in their 70s and cannot use internet banking as they have no internet connection nor computer. They are hard of hearing, so telephone banking is also out of the question. How are customers like them supposed to deal with any issues if they cannot speak to someone face to face?”

HSBC’s closure of Risca’s branch was bungled, and the same goes for branches all over the country. The first I heard about it was in an email on a Friday night. I was told, “Do not say anything, because we have not told the customers or the businesses. Keep it to yourself.” I wrote to the bank and asked for an exact closure date and when it was going to be announced, but I was met with silence. It was only when I put it in the press and set up the petition that HSBC wanted to talk to me. Even then, it was like pulling teeth.

I asked to speak to the chief executive—like the hon. Member for East Lothian did with RBS—and I was given a regional director who popped by in Risca for the day. Guess what I found when I walked into the HSBC? Did I find a branch on its last legs? Did I find a lack of staff? No, people were queuing out the door to use the services. The average age of the people was 70s or 80s and they were complaining that the branch was going to close, yet the representative was in the office telling me that no one was using the service. Who am I supposed to believe?

Another thing that I have to say about HSBC is that when it did finally put out a press release, it told me that footfall had dropped by 70% in Risca. That was very good, and I accept that, but when branches were closed in the constituency of my hon. Friend the Member for Rhondda (Chris Bryant) in Porth and Tonypandy and in the constituency of my hon. Friend the Member for Ogmore (Chris Elmore), the bank said exactly the same thing: footfall had fallen 70% as well. I am sorry, but I do not believe that figure.