Commons Sense

House of Commons · Westminster Hall

Royal Bank of Scotland Branch Closures

14 May 2024 · 9 other contributors · 4,551 words

Opened by Deidre Brock SNP Edinburgh North and Leith

Responding minister: Bim Afolami

EconomyTaxation

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Deidre Brock raised concerns about royal bank of scotland branch closures in Westminster Hall. A government minister responded.

Key points

  • Concerns raised about Royal Bank of Scotland closing branches in Edinburgh North and Leith, impacting community access to physical banking services.
  • Calls for government intervention to introduce a community right to physical banking services and to
  • 2023FCA

Key requests to Government

I call on the Government to introduce a community right to physical banking services and to loosen up criteria for bank hub proposals so that communities do not have to wait until the last branch leaves their town before hubs will even be considered. The roll-out of these measures needs to be widened and accelerated.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Deidre Brock SNP Edinburgh North and Leith

I am concerned about the rapid closure of Royal Bank of Scotland branches, which leaves communities in Edinburgh North and Leith vulnerable. Despite the bank's claim to serve Scottish communities, the decision to close the branch in Leith is baffling as it serves a vibrant and growing part of the city with diverse banking needs. The branch closures pose particular challenges for older people who cannot easily manage without physical branches or mobile banking services. Since 2015, almost 635 branches have closed in Scotland, yet only nine hubs have opened and only 15 sites have been recommended as suitable since the trials ended in 2021.

Other contributors (9)
  • Brendan O'Hara SNP Argyll, Bute and South Lochaber

    He emphasized repeated discussions on this issue over nine years and highlighted recent closures in Argyll and Bute. He argued that financial institutions should not prioritize shareholder dividends over social responsibility.

  • Carla Lockhart DUP Upper Bann

    Since 2020, 50 banks have closed in Northern Ireland and only one banking hub has opened. Carla Lockhart asks the Minister when the criteria for branch closures will change.

  • Christine Jardine Lib Dem Edinburgh West

    She highlighted the issue of branch closures in Edinburgh, noting that 70% of bank branches have closed down over recent years. A constituent in Newbridge village faces difficulties due to the closure of an RBS branch and must travel to another part of the city for cash. The post office 1.7 miles away from Newbridge, where a branch was closed, is also closing or inaccessible without a car.

  • Jamie Stone Lib Dem Caithness, Sutherland and Easter Ross

    The county of Sutherland is 2,028 square miles with only one branch. Jamie Stone pleads for officials in the Treasury to consider this statistic when thinking about future branch closures.

  • Jim Shannon DUP Strangford

    He supported the debate, mentioning that Ulster Bank closed its Ballynahinch branch last February and intends to close the Downpatrick branch in November. He argued that high profits do not justify abandoning duty of care towards rural banks and called for legislation emphasizing this duty. He expressed interest in discussing branch closures in his area, noting the particular impact on rural areas.

  • Jonathan Edwards

    He suggested expanding criteria for community banking hubs to serve multiple small towns within a certain distance, as the current setup fails rural Wales.

  • Michael Shanks Lab Rutherglen

    He pointed out that the Rutherglen branch is also slated for closure and cited older people being directed into branches to use apps, inflating digital tool usage statistics despite their unwillingness to adopt them. Banking hubs are useful but Michael Shanks questions whether they should replace branches entirely and asks for the Minister's view on keeping branches open.

  • Paul Girvan

    He noted that proposed alternatives such as banking hubs are often unavailable at convenient times, suggesting they do not provide adequate accessibility to all constituents.

  • Sarah Dyke Lib Dem Glastonbury and Somerton

    She discussed Frome's upcoming loss of its last bank, following closures in other market towns. She proposed the development of community banking hubs to safeguard face-to-face contact with banks for elderly constituents. Many market towns in Sarah Dyke's constituency lack banks, forcing businesses to travel long distances to deposit cash safely. She seeks the Minister's comment on how this will be managed.

Government Response

Bim Afolami

I commend the hon. Member for Edinburgh North and Leith on securing this debate, acknowledging that banking has changed significantly with a shift towards online and mobile access, but also recognising the importance of in-person banking services. The Financial Services and Markets Act 2023 established the FCA as the lead regulator to ensure reasonable provision of cash withdrawal and deposit facilities, including free services, ensuring people should be no further than three miles from a free cash access point. Recent FCA data shows that almost nine in ten adults bank online or use mobile apps, while roughly one-fifth regularly use a branch. The minister noted the industry's commitment to open more than 225 banking hubs over the next 18 months and stressed the importance of flexible criteria for rural areas where current rules do not appear to be working adequately. The minister also highlighted that banks are bound by the Equality Act 2010 and must make reasonable adjustments in delivering their services, and that firms must provide support to customers transitioning from digital or telephone services after branch closures. Banking hubs help people withdraw and deposit cash, pay cheques, check balances through post office counters, and offer community bankers for wider banking needs. The industry has committed not to close branches recommended for replacement by a hub for up to 12 months until the hub is open. Firms must notify customers of planned closures at least 12 weeks in advance, provide support during transition, and carefully consider the impact on their customers.

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