Local Bank Closures

Paul Masterton Excerpts

Wednesday 12th June 2019 Westminster Hall

[Paul Masterton (East Renfrewshire) (Con)]

I thank my hon. Friend the Member for Moray (Douglas Ross) for having secured today’s debate. This issue is of real concern to my constituents, who have been hit by a number of closures of bank branches in recent years. I am a member of the Scottish Affairs Committee, which has done a lot of work in this space: we have done a bespoke short inquiry into RBS’s significant run of bank closures, and we are going to do another one into access to cash. I am sure the Minister will be sick of the sight of me, since he was in front of the Committee this morning.

I will touch a lot on some of the points that our Committee has drawn out through our inquiry, and focus in particular on the impact of bank branch closures—especially the last bank in town—on the local post office network. That network is often used by banks as a justification for abandoning a community and a high street. It seems to me that banks effectively want post offices to do their work for them, often at a loss, as the hon. Member for Motherwell and Wishaw (Marion Fellows) has explained. From evidence given to my Committee, we know that banks do very little to ensure the longevity and sustainability of the post office network on which they rely so heavily. In East Renfrewshire, half a dozen post offices have closed over the past couple of years for a variety of reasons. Just about every single one of those post offices was included in the so-called consultation documentation produced by a local bank as the nearest place for customers to carry out their transactions.

The Government need to set out a clear policy paper on how to tackle this issue, and reform the access to banking standard from a voluntary agreement into something with more legislative backing. They also need to do more to facilitate genuine alternatives to banks using the post office as a quick fix when closing branches. Post offices are not a replacement for branch services, and their staff do not have the training to act as banking specialists; my hon. Friend the Member for Moray ran through a whole range of things that they cannot do and explained well the lack of awareness about the post office. However, it is crucial to ensure the post office network is receiving adequate funding to deliver banking services, rather than post offices subsidising bank branch closure programmes, which is effectively what is happening at the moment.

I agree that banks need to look seriously at sharing space to keep a local presence; that is particularly important when the last bank leaves. If those banks still want to pass the buck to the Post Office, the Government should explore making them responsible for setting up and funding banking hubs. Such hubs could be located or co-located in post office branches in certain instances, but the post office branches themselves and the services currently available through them should not be seen as a replacement for banking services. The Government could raise the bank corporation tax surcharge and the bank levy to fund the provision of banking services in the post office network and a network of community banking hubs, especially when it comes to staff training. In 2019-20, those two taxes are forecast to raise over £4 billion. Of course, funding should also be available through fines collected for non-compliance with the standard.

My constituents living in Neilston saw their post office suddenly closed in March, leaving that village without any banking services whatsoever. The same has happened in Eaglesham, at the other end of the constituency. Post offices that banks used as excuses for why their branch was no longer needed are gone. Where are the banks? They simply do not care; as far as they are concerned, it is now the Post Office’s problem. Their responsibilities to the communities they used to serve are, in their view, over.

Surely, the least we can expect is that if banks want to pass the buck to the Post Office, they ensure that post offices are sustainable alternatives to bank branches in the long term. It is quite clear that for my constituents, they are not. As I told the executives of RBS, Bank of Scotland, TSB and Clydesdale Bank when they appeared before the Scottish Affairs Committee, it is completely unacceptable for high street banks to rely on the post office network as a justification for abandoning local communities while doing nothing meaningful to ensure the continued survival of that network.