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BANK BRANCH CLOSURES
30 June 2016
Lead MP
Chris Matheson
Debate Type
General Debate
Tags
EconomyBusiness & TradeWomen & Equalities
Other Contributors: 38
At a Glance
Chris Matheson raised concerns about bank branch closures in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The motion was moved to express concern over the continued closure of bank branches and their negative impact on local communities, small businesses, and senior citizens. The hon. Member for Aberavon highlighted that while technological advances in banking have made services more convenient, many still rely on physical banks, especially those with limited access to smartphones or internet connectivity. He cited examples from his constituency where branch closures had led to increased traffic congestion, environmental harm, and a decline in local businesses. Additionally, he emphasised the social inequality arising from branch closures predominantly affecting lower-income areas while new branches are opened in affluent districts.
Albert Owen
PC
Ynys Môn
The hon. Member for Ynys Môn mentioned the practical difficulties faced by residents who do not have a reliable mobile phone signal, limiting their ability to access banking services digitally.
Nia Griffith
Lab
Llanelli
She noted that small businesses in her constituency would face significant challenges if forced to travel to another town for banking services due to increased traffic and time lost from running the business. This highlights how bank closures disproportionately affect local economies.
Margaret Ferrier
Ind
Rutherglen and Hamilton West
The hon. Lady pointed out a constituency case where individuals were defrauded of their life savings due to online scams, raising concerns that forcing people into digital banking services could exacerbate the risk of fraud.
Gareth Thomas
Lab Co-op
Harrow West
He suggested a need for more support from the Government in creating responsible finance options like credit unions and community banks, especially in areas facing high interest rates due to bank branch closures.
James Heappey
Con
Yeovil
Heappey noted the increasing rate of bank branch closures, citing examples from his constituency where four banks closed within a year. He highlighted the significant challenge for communities to establish alternative banking options like credit unions or community banks due to regulatory hurdles and contested usage data in impact statements. He emphasised that the issue is not just rural but affects town centres too, with transport issues disproportionately affecting vulnerable and isolated people.
David Lammy
Lab
Tottenham
Lammy questioned whether Glastonbury's banks consulted local MPs before deciding to close branches, suggesting that the process should have encouraged community consultation rather than mere mitigation of fears.
Albert Owen
PC
Ynys Mon
Owen pointed out that there is no joined-up thinking across different Government departments regarding bank closures and town regeneration, highlighting the need for coordination between Treasury, DCMS, DCLG, Defra, and others.
Gareth Thomas
Lab Co-op
Harrow West
Thomas suggested that a requirement similar to US regulations mandating banks to provide significant financial services to communities from which they take deposits could have provided confidence for alternative banking options if traditional banks were determined to leave.
James Heappey
Con
Portsmouth North
He discussed the Community Reinvestment Act and highlighted the issue of bank branches closing disproportionately in poorer areas, which is concerning given that these banks benefited from taxpayer bailouts. He emphasised the importance of small businesses relying on physical bank branches for cash transactions and advice. He called for a thorough review of access to banking protocols and community impact statements.
Mims Davies
Con
East Grinstead and Uckfield
The right hon. Gentleman is making an important speech about the value of banks to our communities. Barclays and HSBC have contacted me about closures in Hamble and Hedge End respectively. In my experience, there is no point hearing from them because they have already made up their mind. The situation is difficult and disappointing for my elderly, vulnerable and, perhaps, non-internet-savvy residents.
David Lammy
Lab
Tottenham
The hon. Lady makes an excellent point; that is also my experience. I am talking about consultation with democratically elected people. Banks certainly ought to speak to the local authority leader before making a decision to say, “We’re thinking about it. What do you think the impact might be?” All of us, as professionals and Members of Parliament, are used to having private, confidential conversations every day of the week. We are sometimes able to say, in private, “Have you thought about this or that?” We can talk about the future economic context of a community of which the bank may not be aware. But there was none of that; I was presented with a fait accompli. Frankly, HSBC was patronising.
Gareth Thomas
Lab Co-op
Harrow West
Can I tempt my right hon. Friend to agree that perhaps part of the solution would be more action by regulators and the Government to encourage different kinds of banks to emerge—banks that are profit-making, but not necessarily profit-maximising? Many banks, including those he has listed, will always face pressure from shareholders, in their management’s view, to reduce costs. Bank branch closures are always likely to be among the options available, so perhaps a different kind of bank is necessary.
David Lammy
Lab
Tottenham
The House will recall the important role that building societies played in local communities before they merged into banks, which resulted in branch closures and loss of local proximity. The Government should consider reviewing new banking structures to reinstate community-based services. Despite the access to banking protocol undergoing review, it fails to protect consumers adequately due to its lack of enforcement and meaningful consultation processes post-decision making.
Chris Davies
Con
Brecon and Radnorshire
This debate is crucial for rural areas such as Brecon and Radnorshire, where branch closures disproportionately affect small businesses and elderly populations. While technology and cost-cutting measures contribute to the issue, reduced opening hours and complete closures are of greatest concern. Mobile banking solutions could mitigate this problem but require further support from the Government to be viable in remote areas.
Susan Elan Jones
Lab
Clwyd South
She criticised the bank branch closures in small and rural communities, highlighting that Clwyd South has lost eight branches since 2010. She cited HSBC's closure of two branches in her constituency this April and pointed out the practical difficulties these closures cause for elderly residents. She mentioned HSBC's response as disappointing and called for a protocol to address the crisis affecting rural areas and small towns, stressing the need for better access to basic financial services through community bank hubs or mobile banks with full service provision.
Gareth Thomas
Lab Co-op
Harrow West
The speaker emphasised the importance of bank branch closures in relation to insufficient access to affordable credit for individuals and small businesses. He highlighted the role of mutuals, such as building societies, which are slower to close branches due to their community-oriented approach. Thomas also advocated for encouraging the expansion of the responsible finance sector and suggested ways to improve credit unions’ marketing and front-end services. He proposed a review of banking data quality to ensure better conclusions about lending appropriateness in communities.
Ronnie Cowan
SNP
Inverclyde
Cowan discussed the impact of bank branch closures on his constituents, noting that over 4,000 branches closed between 1997 and 2014. He mentioned a further decline of around 600 branches from April 2015 to April 2016, with Scotland, Wales, and the south-west being particularly affected. Cowan highlighted specific branch closures in his constituency, Inverclyde, and expressed concern about constituents' frustration over this issue.
Margaret Ferrier
SNP
Rutherglen and Hamilton West
Ferrier addressed the closure of a Royal Bank of Scotland branch near her constituency office in Cambuslang and a Clydesdale bank in Blantyre. She expressed concern about over-the-counter services being cut off for long-standing customers who rely on them, noting that no reasonable alternatives are offered.
Ronnie Cowan
SNP
Glasgow North East
Agrees with previous points and discusses the specific challenges faced in his constituency due to bank closures, particularly in Gourock and Port Glasgow. He highlights that despite promises from RBS not to close 'last banks in town', 165 such closures have occurred since 2014. Ronnie details how mobile banking vans are inadequate replacements for permanent branches, citing issues with accessibility, privacy, and security. He emphasises the need for all individuals, including those who may be less comfortable with digital banking, to receive proper service from banks.
Albert Owen
Lab
Ynys Môn
Congratulates other members on sponsoring the debate and discusses the significant impact of bank closures in north-west Wales. He points out that these same banks were bailed out by taxpayers yet have proceeded with numerous closures. Albert criticises the manner in which closures are implemented, noting a pattern of reduced services before full closure, and questions the sincerity of banks' claims about difficulty when deciding to close branches. He highlights issues faced by rural communities due to lack of digital signal coverage and inadequate alternatives like post office counters.
Mark Williams
Lab Co-op
Ceredigion
Congratulates the hon. Member for City of Chester on securing the debate and highlights the challenges faced by rural communities due to bank closures. Discusses his constituency, which is particularly rural with 147 villages and hamlets and 700 family farms, contrasting it with semi-rural areas discussed earlier. Points out that despite advances in mobile banking, physical access remains critical for many businesses and individuals. Emphasises the importance of local bank managers who understand the community's needs. Discusses broadband coverage issues and HSBC’s decision to close the Aberaeron branch without proper consultation, highlighting its impact on local businesses and visitors. Concludes by stressing the need for a renewed protocol that addresses concerns about access to banking services in rural areas.
Chris Evans
Lab Co-op
Caerphilly
Interrupts briefly with 'Stop bragging'.
George Kerevan
Ind
East Lothian
The hon. Member pointed out the lack of proper consultation in bank branch closures, citing RBS's closure of its last branch in Prestonpans despite a previous promise not to close 'last in town' branches. He emphasised that the Financial Conduct Authority should enforce adherence to the BBA protocol on bank closure and criticised banks for failing to modernise their IT systems, leading to cost-cutting measures like branch closures. The hon. Member also suggested implementing a universal banking obligation similar to the existing broadband obligation, expanding local banking services for SMEs, and urged RBS CEO Mr Ross McEwan to meet community representatives.
Chris Evans
Lab/Co-op
Caerphilly
The hon. Member paid tribute to his colleagues who contributed to the debate on bank closures in their constituencies, including my hon. Friend the Member for City of Chester and the hon. Member for Wells. He expressed hope that Mr Ross McEwan from RBS would meet with George Kerevan soon due to his passionate argument regarding the issue.
Susan Elan Jones
Lab
Clwyd South
The hon. Member corrected her colleague's mention of her constituency, confirming it as Clwyd South.
Chris Evans
Lab Co-op
Caerphilly
Evans criticised HSBC's handling of the closure in Risca, noting that he was initially told not to disclose information about the branch closure until it had been officially announced. He pointed out that when HSBC finally issued a press release, they stated that footfall at the branch had dropped by 70%, yet they used the same statistic for closures in other constituencies.
Heappey agreed with Evans's point about the ambiguity of 'regular users' as defined by banks, suggesting that there needs to be a clear definition so that impact statements can be properly interrogated.
Chris Evans
Lab Co-op
Caerphilly
Agrees that raw data should be used to justify branch closures and highlights the social impact, such as loss of local banking options. He mentions the importance of community engagement before a closure and praises Barclays for their better service compared to HSBC during closures in his area. Evans discusses initiatives like Barclays' Digital Eagles programme and suggests mobile banks could mitigate impacts. He also advocates for credit unions expanding their role and becoming part of a new banking model, possibly through legislation.
Mike Wood
Con
Kingswinford and South Staffordshire
Supports the concern about staff impacts due to bank closures and asks for more redeployment efforts from banks, along with retraining support where possible.
Gavin Newlands
SNP
Paisley and Renfrewshire North
Mr. Newlands discussed the closure of Bank of Scotland branches in his constituency, highlighting how it affects pensioners and those with mobility issues who do not have access to or knowledge of online banking. He also mentioned a planned branch closure in Bridge of Weir, a rural area poorly served by public transport and broadband services. Mr. Newlands emphasised the importance of local banks for communities and called on the Government to roll out superfast broadband to ensure viable alternatives to physical branches are available. He highlighted a 57% decline in bank branches since 1988 and criticised banks' lack of prior consultation before making decisions to close branches.
Kirsten Oswald
SNP
East Renfrewshire
The hon. Member describes the impact of proposed bank closures in her constituency, highlighting that RBS is leading closures and underscoring the industry's failure to honour promises made regarding branch networks. She raises concerns about digital exclusion in areas with poor broadband or mobile network coverage and emphasises the need for regulatory influence to ensure widespread banking access despite technological advancements. She also criticises the lack of community consultation on bank closures, noting that traditional branches are often replaced by complete service withdrawal rather than downsizing or relocating. Additionally, she questions industry investment claims and the willingness to collaborate with post offices, but notes limited success from challenger banks in expanding branch networks. Finally, she underscores the importance of branch services for older individuals and those unable to use digital banking, citing an example of a scam prevention effort by bank staff.
John McDonnell
Lab
Hayes and Harlington
Mr McDonnell emphasised that bank closures contribute to financial exclusion, affecting individuals and businesses in both urban and rural areas. He agreed with the proposal for local banking hubs and highlighted the need for effective consultation processes and safety nets like the US Community Reinvestment Act. He also mentioned the importance of credit unions as a solution and discussed the impact of closures on local economies.
Harriett Baldwin
Con
West Worcestershire
Ms Baldwin responded for the Government, acknowledging changes in customer behaviour but noting that even in rural areas, fewer people are using bank branches. She pointed out a 30% drop in annual branch transactions and suggested that if customers were demanding traditional banking services, banks would not be closing branches.
Kirsten Oswald
SNP
East Renfrewshire
Ms Oswald questioned whether the decline in bank transactions is due to the closure of branches rather than a shift towards digital banking. She highlighted specific examples of branch closures and their impact on local communities.
Harriett Baldwin
Con
West Worcestershire
The Minister highlighted the importance of bank branches for local communities and financial services. She acknowledged progress in providing basic bank accounts, reducing fees for failed payments, and improving access to banking services through the Access to Banking Protocol. The Minister committed to ensuring that credit unions have a communal IT platform and encouraged their participation in the Help to Save product consultation. She also emphasised the role of post offices and free-to-use ATMs, as well as digital connectivity and mobile phone signals.
Albert Owen
Lab
Ynys Môn
The hon. Gentleman encouraged the Minister to talk to local bank staff who are on the frontline of banking services. He noted that reduced hours limit his ability to visit banks but stressed the importance of hearing from branch staff and customers.
Chris Evans
Lab Co-op
Caerphilly
The hon. Gentleman inquired about real-time credit scoring, suggesting it warrants further discussion.
Gareth Thomas
Lab Co-op
Harrow West
The hon. Member requested a deputation from the credit union and responsible finance industry to explore additional ways to support growth in these sectors.
Government Response
Ms Baldwin noted that if customers were demanding traditional banking services, banks would not be closing branches despite a significant drop in annual branch transactions. She acknowledged the importance of digital alternatives but recognised the need for physical accessibility. The Minister committed to maintaining access to local banking, emphasising that her door is open for further discussions. She highlighted progress on basic bank accounts and reduced fees for failed payments, acknowledged the role of post offices and free-to-use ATMs, and encouraged credit unions to participate in the Help to Save product consultation.
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