1. To ask the Scottish Government what action it can take to ensure that communities and town centres provide at least a basic level of banking access for older and disabled customers and small businesses. (S5O-00599)

The regulation of banking remains reserved to Westminster and the Scottish Government cannot compel banks to maintain a branch presence where they have taken the commercial decision to close.

The Scottish Government appreciates that the banks must make savings and efficiencies in delivering services to customers in a modern and changing world, but clearly there is a continuing need—or a strong preference—for face-to-face provision of banking for some. Digital access will not be available to—or, indeed, suitable for—everyone, and many customers prefer direct contact for the provision of key financial advice.

Hence, although we recognise that declining branch activity may be a driver for banks today, we urge banks to see branch closures as a last resort and, before closing a branch, to consider consultation with local stakeholders and communities to explore all practical options.

I thank the Minister for that answer. The 2013 Scottish Government report, “Sustainable, Responsible Banking: a strategy for Scotland”, recognised the future importance of accessible community banking. It said that the Scottish Government would

“explore the potential for promoting further community banking options in Scotland.”

The 2016 Scottish National Party manifesto also made a commitment to encourage and support other providers of services in the banking sector. My understanding from the minister’s recent letter to me was that he remains committed to that; he mentioned in particular credit unions and post offices. Will he and the Government therefore commit to working with local community groups, such as those in Juniper Green in Edinburgh, in order to explore options and viable alternatives for a continuation of banking services following the recent raft of branch closures?

I certainly accept that the recent round of branch closures has been of great concern. I know from representations made by Mr Lindhurst and, indeed, Mr MacDonald in relation to Juniper Green and to previous closures in the Pentlands Constituency and in Edinburgh more widely that the issue is causing great concern locally.

As I indicated in my letter, we strongly support the credit union movement and it is quite right to point out that banks are not the only organisations that can provide local banking services. Scotland is currently well serviced by credit unions—there were 99 credit unions in Scotland at the end of June last year. The Scottish Government is working with credit unions to grow the movement in Scotland, so there may be opportunities in localities such as those affected by the recent raft of branch closures to look at a credit union alternative.

At this moment in time, Scotland has a proportionately higher level of credit union membership than England and Wales—it is a well-established movement here. According to the Bank of England’s most recent quarterly statistics, approximately 7.2 per cent of the Scottish population are enrolled in a credit union compared with only 1.5 per cent of the population in England and 2.6 per cent in Wales. Clearly, it is an area in which we could do more work, but we are starting from a good base of support for credit unions.

By this summer, the Royal Bank of Scotland will have reduced the number of branches that are available to my constituents from six to zero. The nearest branch will be at least two bus journeys away, which will impact on the elderly, the disabled and those constituents who prefer face-to-face banking.

Would the Minister agree that, at the very least, large banks such as RBS that completely withdraw from communities should extend their mobile branch network to provide a service to those who are unlikely or unable to take advantage of online banking?

If members make their questions brief, I will take three supplementaries. I call Kenneth Gibson first.

Clydesdale Bank has announced that it will close 40 branches in Scotland—including two of its three branches in my Constituency, at Beith and Saltcoats—thereby cutting jobs and greatly inconveniencing customers.

What representations is the Scottish Government making to Clydesdale Bank regarding the closures? Does the Minister share my view that the bank has not complied with the British Banking Association’s “Access to Banking Protocol”, which requires that community engagement is undertaken and an impact assessment is published prior to any closure?

I am particularly interested in the latter point, and I will look into whether the protocol has been considered in the particular case that we are discussing.

Members on all sides of the chamber have expressed concerns about the degree to which there has been meaningful consultation. In my original answer, I stressed the importance of the banks undertaking genuine consultation with the community and local customers who are affected before taking such a step, which should be seen as a last resort.

We respect commercial decisions when they have to be made, and it is clear that such decisions are necessary in some cases given the changes in customer preference for using bank branches, but there is an onus on us to try to protect those who are most vulnerable.

With regard to engaging with the banks through the Financial Services Advisory Board, the First Minister, the Cabinet Secretary for Finance and the Constitution and I engage regularly with the financial services industry, including one to one. I will raise these issues when I have the opportunity to do so with Clydesdale Bank and other banks on behalf of Kenneth Gibson and other members who have expressed concerns.

I declare an interest as convener of the cross-party group on towns and town centres. I am certain that the Minister is aware of the rapid withdrawal of banks such as Clydesdale from Troon in my Constituency and Cumnock in Jeane Freeman’s constituency, in addition to the closure of the branches in Mr Gibson’s constituency, which reduces their presence significantly in Ayrshire and elsewhere.

The minister will also be aware of the banking sector’s proposals to end the free use of cash machines.

Noting those two facts, can the Scottish Government take specific measures to reduce the impact of the reduction in access to banking services, particularly for the elderly and our least well-off town-centre users?

I certainly note the impact on John Scott’s Constituency and on other parts of rural Scotland. The impact of such closures is particularly hard when a branch is the last in town; closure in that case can have a big impact on the business community and on customers.

It is important that we think through how we can support people in that situation. We will listen keenly to any suggestions for Government action that could help, although I point out that regulation of the industry is still reserved. As I said in my response to Mr Lindhurst, we can consider alternative services such as post offices or credit unions where those might help vulnerable groups, in particular, to access local banking. I give Mr Scott an undertaking to listen to any options of which he is aware that we could undertake in respect of his constituency.

The Minister mentions post offices. It was with deep worry that I heard the recent announcements about the closure of Crown post offices, including the Morningside Post Office in my Constituency. Will he join me in condemning that announcement by the Post Office and the UK Government?

The Presiding Officer:

Please be brief, Minister.

We share concerns about the contraction in the Post Office network and we are making representations to United Kingdom ministers on the issue. My predecessor Fergus Ewing was very active in that regard. The issue is of concern and we will look closely at whether we can do anything to support communities that are affected. Where credit unions and post offices are available, they are important alternatives to bank branches, and I hope that the Post Office will take into account the wider impact of what it is doing on access to key services.

I certainly agree with the sentiment that there is an onus on banks that have reduced branch coverage to try to make sure that they maintain access to banking services as best they can. Mobile banks are very successful, particularly in rural locations, so there is no reason why that service could not be rolled out in suburban and, indeed, urban Scotland where it is required. I am grateful that RBS has delayed closure—going from three months to six months—to give more time to train and to assist customers with how to use digital banking.

As I said in my initial answer to Gordon Lindhurst, digital banking will not be a relevant means of access for all customers, and mobile banking may be a more acceptable option for many who prefer face-to-face contact.