I am delighted to take part in today’s debate on bank branch closures, because the first campaign I got involved with as the new MP for Paisley and Renfrewshire North was an attempt to stop the closure of a much used local bank. I thank the hon. Members who secured the debate, and I thank the Backbench Business Committee for scheduling it.
The campaign I mentioned was initiated when we heard that the Bank of Scotland branch on Glasgow Road in Paisley was being closed, meaning that customers would be forced to use internet banking or to travel to the nearest bank, which was in the town centre. Not only was the bank used by local businesses on Glasgow Road, but, much more importantly, it provided a vital service for the residents of Ralston and Whitehaugh, the majority of whom are of pensionable age—unlike one famous resident, my hon. Friend Mhairi Black, who is significantly younger. The decision caused a lot of anger and concern in the local community, and I am sure I am not the only Member who has been frustrated when a bank has offered solutions such as using online banking or travelling often significant distances to access branch services.
Following the decision to close the branch, I met bank bosses in London and in my constituency, where I organised representatives of local residents associations and community councils, as well as the local MSP, to come and put their case to the bank. However, we were left incredibly frustrated when it would not respond to or accept the case that was made about the difficulties of online banking. When I spoke to constituents affected by the decision, I heard at first hand that many customers do not have the knowledge or hardware to use online banking. These decisions disproportionately affect the elderly and those with mobility problems, but banks never fully take that into account when making these decisions.
I also represent Bridge of Weir, a rural area that faces the closure of its local bank. If the bank does close, that will have a huge impact on residents. Not only is the village poorly served by public transport, but online banking is even less of a viable option owing to the poor broadband service in the village. Access to an effective broadband service is surely a must if banks are to cite online banking as an alternative to local branch services. All too often, however, banks are closed in rural villages that have a poor broadband service, something alluded to by Chris Davies.
I am pleased to say that Bridge of Weir, along with Houston, Crosslee and Craigends, recently finished in the top 10 of Virgin Media’s Supercharging Local Communities initiative, meaning that Virgin’s network will be extended to those communities in the next year or so. However, the bank’s decision was made before the Virgin announcement.
The UK Government have a poor record on broadband roll-out. By contrast, the Scottish Government have invested £400 million to deliver superfast broadband to 95% of properties across Scotland by the end of next year. In addition, the SNP Scottish Government were recently elected on a manifesto pledge to ensure that 100% of premises have access to superfast broadband by 2021. If the UK Government are committed to helping more people to access online banking, I would encourage them to follow in the footsteps of the Scottish Government and to be more proactive in rolling out superfast broadband.
Any impact or equality assessment completed following a decision to close a local bank would surely highlight the negative consequences for particular groups. That is why I get so frustrated and angry when a decision is made to close a branch that is providing a vital service to a local community. Putting to one side the support that the taxpayer has provided to these banks, they have a responsibility towards our communities and we should not allow them to make reckless decisions that will have a negative impact on particular sections of our communities. We were unsuccessful in persuading the Bank of Scotland to reverse a decision to close the Glasgow branch. This obviously disappointed the local community, but we are aware that our campaign is only one example, as many other local communities from across the UK attempt, often in vain, to prevent banks from being closed in their areas.
The truth of the matter is that local banks closing is not a new thing—it is not a process that began following the 2008 global financial crisis. The bank branch network has been declining for the past 30 years. In 1988, there were over 20,000 branches in local communities across the UK; by 2012, this number had fallen by 57% and we had only 8,800 branches serving our local areas. Worryingly, in many of these cases it is the last bank in a town or village that is being closed down. In the first three quarters of 2015, UK banks closed 650 branches, of which 177 were the last bank in town. This is entirely unacceptable. Unfortunately, all the major banks are guilty of letting their customers down on this issue.
One of the aspects that I find most distressing about the closures I spoke of—I know this frustration is shared by many hon. Members—is the fact that the decision to close was made without prior consultation being undertaken. The banking industry has to start listening to its customers. It is not good enough for the big banks to make a decision and then be dragged to a table and forced to consult the local community in what is ultimately a charade. The big banks should open up dialogue at the very first stage and allow the community to engage in the process before any such decision has been reached.
Local banks are vitally important to local people and affect each and every one of us. We all take our roles as constituency MPs extremely seriously, and I am sure that we would all support local groups who are campaigning against a bank closure. The wave of bank closures affecting communities across the country is an issue that should unite the House. The consequences for communities following a bank closure are clear. The number of banks being closed is growing by the month, and the Government should be concerned about this. The UK has only a third as many bank branches per person as other European countries. This disappointing—or shameful—comparison should encourage the UK Government to take action, and to do so soon before it is too late. I am very concerned that village and rural economies will be severely affected by a lack of local banking options, and that as a result of bank branch closures, businesses are more likely to close, a regeneration agenda is much more unlikely, and start-up finance for local businesses becomes more difficult to obtain.
Communities rely on their local bank branches. They are just as important as local doctors, dentists, and supermarkets. They are vital for constituents who live in urban areas and a lifeline for those who live in more rural settings. We have to protect our local banking services. We must ask the banks to think again and reverse their closure programme. If they will not, I would ask the Government to use their considerable influence and to intervene to ensure that no more towns and villages are left without a bank.