Community Bank Closures — House of Commons, 2018-02-08
Topic: Domestic Commerce
John Philip Glen (Conservative, Centre-right): I commend the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Hazel Grove (Mr Wragg) for securing this debate, and thank the Backbench Business Committee for allowing it. We have had a lively debate with 16 Back-Bench contributions, and it has rightly aroused a lot of passion. It is the third such debate in the four weeks that I have been in post—two of them in Westminster Hall—and the banks will need to respond to what they have heard. From Strangford to Selkirk, from Newton Aycliffe to Sandwich, from Bradford on Avon to Bungay, we have heard the case made for banks to remain open, and in my constituency I will be meeting representatives from Lloyds bank tomorrow to discuss the closure of Wilton bank, which is scheduled for 19 March this year This is a very important issue, and I listened carefully to the observations from Members across the House on what the Government should do. They ranged from my hon. Friend the Member for South Thanet (Craig Mackinlay), who, characteristically, was very reticent to see Government get involved, to the hon. Member for Sefton Central (Bill Esterson) who, in a measured speech, held out the prospect of significant intervention from Government. I believe there is a role for Government in dealing with this issue, and I will talk about the Government’s actions to support those who require over-the-counter banking services and the Government’s commitment to widespread free access to cash I want to address the banking standard, too; I noted the observations of the right hon. Member for Don Valley (Caroline Flint) about her perception of the inadequacy of the banking standard and I want to address that, as well as the concerns raised about the way that the banking services available at the post office work. I will also address the UK ATM operator LINK’s financial inclusion programme As Economic Secretary, I want financial services that deliver for all customers up and down this country, from Salisbury high street to the farthest reaches of the Hebrides. None the less, all hon. Members will appreciate that banking, like so many other industries, needs to respond to changing customer behaviour, which we have heard depicted by many Members in our debate. Change, which in this case is driven by the unrivalled speed of innovation in the financial services sector, is not easy to remedy. How many of us in this House regularly use our local branch, and how many of us, like me and others, manage our finances online or via our mobile phones? Ultimately, what I have repeatedly made clear in this place in the four weeks that I have been in post is that the management decisions of banks are made without intervention from Government I hear the call from the hon. Member for North Ayrshire and Arran (Patricia Gibson) to intervene but, given that the Scottish Government own Prestwick completely, it is somewhat odd to be told by the Scottish Government spokesperson that Ministers have no role in the operation of contractual agreements made by the airport. It is really important that we acknowledge that inconsistency and that the Government act through the regulator, and that is not a static dialogue. I have already spoken extensively to the head of the Financial Conduct Authority, and more can be done The Government firmly believe that these firms have a responsibility to minimise the impact of closures on communities wherever possible, which is why I am pleased to address the motion today. The Government already support a range of measures to protect access to banking services in local communities across the UK, but we must acknowledge the change that has happened. Branch footfall is falling year on year—it is down by a third since 2011, as my hon. Friend the Member for Chippenham (Michelle Donelan) noted—and the number of banking app transactions has risen massively, to 932 million in 2016, which is an increase of 57% on the previous year. The Government cannot resist that; the question is what we can do with the tools available The access to banking standard commits all major high street banks to a series of outcomes when they decide to close a branch. There are three principal obligations. First, banks will give customers at least three months’ notice of closure. I note the call from my hon. Friend the Member for Chippenham to extend that period. They have a responsibility as soon as operationally ready, and I note that RBS gave six months’ notice. Secondly, banks will work with customers after the announcement has been made to ensure that they know how and where they can continue to bank. Thirdly—this is vital—banks are required to identify vulnerable customers and ensure that they receive all the help they need. That could mean helping customers get online for the first time, or it could mean showing them the facilities at the local post office, or ensuring that they have access to a mobile branch, a telephone banking service or a local, free-to-use ATM. Obviously, every bank will take a different approach, but the principle of the standard is that the outcome for customers will be the same As of July 2017, the Lending Standards Board has had responsibility for monitoring and enforcing the standard. I say to the right hon. Member for Don Valley that the board does have the power to cancel or suspend a registered firm’s registration and give directions on future conduct, but I will look carefully at her remarks and consider whether anything could be done to strengthen the measures further. This independent oversight is a welcome and important addition to the way the standard works Turning to the ATM network and post offices, I acknowledge that the Government have made great strides in bolstering the over-the-counter banking services available at post offices, and an extra £370 million to support that work was announced in December. UK banks and building societies reached a new commercial agreement with the Post Office that has set the standard for the banking services available in post offices, ensuring a uniform level across the 11,600 branches. Those services can include the ability to check a balance, to withdraw and deposit cash using a debit card, to use chip and pin or pre-printed paying-in slips, and to deposit cheques. There is an ad hoc cash deposit limit of £2,000, but the Post Office estimates that that covers 95% of all transactions We should not forget that 99.7% of people in this country now live within three miles of their local post office, and 93% live within a mile. At the autumn Budget 2017 my predecessor wrote to the Post Office and UK Finance and asked them to consider how they could fulfil the aims they have set out.