Banks (Branch Closures)

Part of the debate – in the Scottish Parliament at on 5 June 2013.

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Photo of Fergus Ewing Fergus Ewing Scottish National Party

I thank John Mason for lodging his motion. I am aware that he raised the issue with John Swinney in March. I understand the concerns about the impact of branch closures in communities throughout Scotland that have been raised by John Mason and all the colleagues who have taken part in the debate.

Banks play a key role in our society and local economies; members have underscored many ways in which they do so. We rely on banks in order to conduct our daily lives. The Scottish Government is absolutely clear that customers must be at the heart of what banks do and the decisions that they make. We have been very explicit about that in our banking strategy, about which I will say more later.

I want to emphasise a point that John Mason made very clearly. My experience of meeting bank staff—recently, I had the pleasure of meeting staff in a branch in Inverness—is that they are unfailingly courteous, helpful, positive and devoted to doing their very best in their work. I make that point quite deliberately, because although all of us here are debating problems that have arisen, we all recognise that ordinary bank staff, who are at the front line and are the face of the bank, do an excellent job for this country. Perhaps sometimes the brunt of criticisms and public disquiet about decisions that are taken by banks’ leadership falls on front-line staff, who have had nothing whatever to do with the decisions. It behoves me, as minister, to thank all the bank staff who do a great job around the country, and who are committed to helping ordinary customers, whether they are individuals or businesses.

It was mentioned by Stuart McMillan that following the financial crisis that the banks have been facing, they have to address their long-term financial sustainability. There is no two ways about that; that task needs to be tackled. We must accept the reality that that task needs to be done. It is not an easy task or one that anyone wished would be necessary, but necessary it is and it involves reducing costs and making difficult decisions. That has been alluded to by some members in the debate.

I am acutely aware of John Mason’s point that not everybody has access to the internet and mobile banking. It is undoubtedly true that some people prefer to bank in a branch. Other people are perhaps not comfortable with or are unable to use the internet either because of unwillingness to break the habits of a lifetime or through age and physical impairments or difficulties that make it impossible to use those facilities. Nonetheless, it must be recognised that banking is changing dramatically.

In preparation for the debate, I asked the Royal Bank of Scotland for information about how it is changing. As John Mason said, internet banking is now such that 50 per cent of the bank’s customers bank online. However, that is not the case in Mr Mason’s constituency, as he said. Therefore, the point that he made about local facilities is relevant. More than 1 billion transactions were carried out on mobile apps, and RBS Group’s customer services handled more than 2 million phone calls in 2012. Increasingly, banks are looking at different ways of serving the public. We are now used to ATMs; branches, mobile banks and points of presence in railway stations and so on may become more popular as people seek convenient solutions in busy lives.

The nature and practice of banking are changing, and there is less demand for the traditional format of banking services that—if I may say so—the Deputy Presiding Officer and I grew up with, when none of those other forms of banking were possible. When the world changes, the nature of policy solutions must change accordingly.

Nevertheless, we recognise the concerns that Mr Mason has expressed and which will be felt by some of his constituents. Therefore, I asked the Royal Bank of Scotland to respond specifically to the issues about the location of the branch in Shettleston that has closed. The bank has advised me that there are several alternative Royal Bank of Scotland branches within 3 miles of the Shettleston branch. Mr Mason also referred to a post office that is located relatively nearby, and Mr McMillan said that there is a post office in Gourock that is fairly close to the Gourock branch that has closed.

I appreciate that those alternatives will not suit everybody and will still leave constituents of Mr McMillan, Mr Mason and other members inconvenienced. The problems are, therefore, not to be dismissed. They are real concerns and I recognise them. Therefore, I would be happy to raise any individual case or specific difficulties that have been caused in Shettleston and Gourock directly with RBS, if either member wishes me to do so.

Mr Mason asked me to say what engagement we have had with the Royal Bank of Scotland. I met RBS on 8 January, the First Minister met RBS on 9 January, Angela Constance met RBS on 7 February, John Swinney and the First Minister met RBS on 13 February, John Swinney met RBS on 28 March, and the First Minister met Ross McEwan, the chief executive officer for UK retail, on both 18 April and 14 May 2013. At those meetings, a huge number of things were discussed, including an undertaking by the Royal Bank of Scotland to invest £26 million in its branches over the next three years. That refurbishment will bring a lot of work to tradesmen throughout the country. I appreciate and acknowledge that as a good thing. In total, the bank is investing £175 million in improving services, branch refurbishments, ATMs and cash-and-deposit machines, and it is investing £50 million in information technology. It is also investing £450 million in IT hardware in its Edinburgh data centres.

I appreciate that none of those things will address—perhaps in any way—the problems that Mr Mason has raised; nonetheless, they are part of the wider picture and it is appropriate to mention them for that reason.

I am grateful to members for highlighting one of the issues that affect banking matters in Scotland. It is right that they do so; it is right that they stand up for constituents who are inconvenienced. However, we must not only recognise the difficulties that face the banks; we must also recognise that they are doing good things in the country. We must be willing to acknowledge that and thank them for doing that.

One member mentioned bonuses. It is my opinion that bonuses are perfectly legitimate when they reward success. However, in the absence of success, the award of bonuses to top directors and a tiny minority of senior employees of financial and other institutions causes extreme public disquiet perhaps more than anything else.

Meeting closed at 17:40.