PARLIAMENTARY DEBATE
RBS Rural Branch Closures - 18 December 2017 (Commons/Commons Chamber)

I begin by declaring an interest as a customer of the Royal Bank of Scotland. I hold an account in one of the branches that has been slated for closure.

The Proclaimers might put it this way: Bannockburn no more. Beauly no more. Biggar no more. Carnwath no more. Castlebay no more. Comrie no more. Douglas no more. Gretna no more. Inveraray no more. Kilwinning no more. Melrose no more. Stepps no more. Tongue no more. Those are 13 locations that RBS is clearing out of in Scotland—abandoning its customers and leaving those places with no local bank. We do not accept that those and the other branches of which the closure has been announced should be shutting their doors, and we demand that RBS reverse its plans.

In those 13 communities in which RBS has announced closures, it is the last bank in town. RBS made a commitment that it would not close the last branch in any location, but here it is, isolating 13 communities that will be left with no branch banking facilities. RBS now says that the commitment not to close the last bank in town no longer applies. The pronouncement that RBS would not close the last bank in town was right when it was made in 2010, and it remains the right thing to do in 2017.

In addition to the towns and villages that my right hon. Friend has just mentioned, branches in Grantown, Aviemore and Nairn in my constituency—they are vital to the tourism industry—are also scheduled for closure. One fifth of the highlands economy is made up of tourism, and it is mostly cash-based. Does he agree that it is not good enough for the UK Government to stand by while what the Federation of Small Businesses calls a “hammer blow” is delivered to small businesses in the highlands?

I absolutely agree with my hon. Friend. Of course, it is not just about those 13 branches. There is justified anger in many communities surrounding the 62 branches signalled for closure in Scotland and the 259 in the United Kingdom. RBS is turning its back on communities throughout the United Kingdom, and it will find that those communities call on it to think again.

RBS is a bank that we all have a stake in. We collectively own just short of 73% of the company. We rightly bailed the bank out in 2008, at a cost of £45 billion. We own RBS. We saved RBS in order that it could continue to offer banking services to our communities, to individuals and to businesses.

I thank my right hon. Friend for the powerful case that he is making. Is he aware that the closures that were recently announced are not the only ones? Some months ago, many of us campaigned against closures in Cupar, Leven and Anstruther, which have also been left without RBS branches.

I absolutely agree with my hon. Friend. The closures have a cumulative effect.

I know that many people want to intervene, but I will try to make some progress because of the time. I will take some interventions later.

Just before my right hon. Friend makes some progress, will he give way?

Nice try. Having a bank on the high street that collects and issues cash and provides other banking services is instrumental to the economic wellbeing of all our communities. Individuals and businesses rely on the access in person to banking services. Why did we save RBS, if there is no recognition that there is a liability on the bank to serve its customers and communities? Customers who have been loyal to RBS for generations find branches being closed on them. That is happening to people such as Cyril French, who lives in Plockton and is a customer of RBS at the Kyle branch. Cyril is 87 and has Alzheimer’s. The staff at the RBS branch are of enormous assistance to him when he goes on his weekly visit to the branch. What is Cyril to do if the bank closes? The next nearest RBS branch would be in Portree on the Isle of Skye, more than 40 miles away. On highland roads, this would take more than an hour, and he would have to be taken there either by family members or by his carer. Is that what Cyril should have to endure to visit a local bank?

Let us think about the local businesses that rely on the bank for depositing and collecting cash. Where are they to go? Let us take businesses such as the thriving Eilean Donan Castle in Lochalsh, which uses the Kyle branch. It is 43 miles from the next nearest RBS branch in Portree. Eilean Donan Castle is a thriving tourist destination, with over 540,000 visitors a year. It deposits millions of pounds of cash a year at the Kyle branch. Its insurance policy demands that it has as many as three staff members to take the cash to the bank. The impact on it of their having to drive to Portree rather than Kyle would be considerable in terms of time and staff resource.

When customers visit their local branch, they will often do other shopping, go for a coffee and such like. The closure of the last branch in Beauly in my constituency will drive valuable business away from the town. Personal customers and businesses will go to Dingwall or Inverness and will more than likely take their other business with them to these places. Closing the last bank in town has a similar effect to the removal of services such as local schools, and it undermines the sustainability of our communities.

As my right hon. Friend knows, there are three Royal Bank of Scotland branches in my Argyll and Bute constituency—in Campbelltown, Inveraray and Rothesay—which are earmarked for closure. Is he aware of the profound anger and the sense of betrayal that is felt by rural communities across Scotland at these brutal closures? The bank closures are completely undermining the great work, being done by so many, of saying to the rest of the UK and the rest of Europe that rural Scotland is open for business. These bank closures must stop.

I agree with my hon. Friend. That is why I say to the Royal Bank of Scotland that it should please listen to the justifiable anger that there is throughout the country. RBS has been a much-loved institution, and one that has been cherished by our communities. We are appealing to RBS to think again, to stop and to reverse these closures.

I congratulate the right hon. Gentleman on bringing this matter to the House for consideration. I have had five banks close in my constituency: three Ulster Bank branches, one Trust Bank branch and one Bank of Ireland branch. Does he agree—many in the House will suspect this to be the case—that people, especially elderly people, will not use banking services, but will keep their money in their house? Is there not a fear that that will lead to more robberies, more violence and more unrest?

I hope that that is not the case, but the hon. Gentleman raises a justifiable concern about the safety of our elderly citizens in their community, and it is another good reason why RBS should think again.

I think all of us want to make sure that small branches in our rural and semi-rural areas are kept open. Does the right hon. Gentleman agree not only that, when these branches close, funds for small businesses shut down, but that, when the last bank in a community closes, as in Bawtry in my constituency, it is a major blow to the community the bank serves?

The right hon. Lady is absolutely correct. The bank manager, in particular, is a valued member of the community. He understands the community he works in and he understands the businesses, and that link is a vital one to retain.

Will the right hon. Gentleman give way?

Will the right hon. Gentleman give way?

I must make some progress, but I will try to take interventions later.

The scale of the closure announcement is breathtaking, and RBS needs to think again. It simply goes too far. I say to RBS tonight: let us work together and put these closures on hold. Let us work with RBS to sustain its ability to do business in its branches in the rural communities. Let us understand the challenges that it faces and rally community support to enable RBS to remain an integral part of our communities.

RBS is trying to create a picture of these branches as a relic of the past, saying that demand for branch banking has declined and that customers are not utilising the branches. Let me tell the House about the reality for the branches in my constituency that are earmarked for closure. I obtained these figures, which are for the last calendar year, from RBS: Mallaig has 1,001 customers with 10,098 transactions; Kyle has 2,436 customers with 25,000 transactions; and Beauly has 3,439 customers with 29,000 transactions. These are not small numbers. Almost 7,000 of my constituents in Ross, Skye and Lochaber rely on RBS providing branch banking services in branches that are earmarked for closure.

I congratulate my right hon. Friend on securing this debate. RBS has closed the Shotts branch in my constituency and is about to close the Airdrie branch, having given customer numbers that many in my constituency dispute. He is making a very important point. If my constituents are to have any confidence in the closures, RBS needs to be transparent about the number of customers using the branches.

I will come on to that aspect, but I must apologise that to get through my remarks, I will not take any interventions for the rest of my speech.

I received the numbers that I issued a couple of minutes ago from RBS two weeks ago. I have asked repeatedly for the relevant figures for all the branches in Scotland that are earmarked for closure. RBS has refused to release the figures. It has published figures for bank use detailing only those that use the bank every week of the year. According to RBS, only 11 customers use Mallaig on a weekly basis, 27 visit Beauly and 51 use Kyle. We know the reality. As opposed to the 51 regular customers trumpeted for Kyle, there are actually 25,000 transactions. If we focused on the so-called 51 customers, we might be sympathetic to the demands from RBS to close the bank, yet the fact that there are 25,000 transactions a year allows me to conclude that the branch is still relatively busy.

Why doesn’t RBS come clean and tell us the number of transactions in all the threatened branches? I ask the Minister to put pressure on Royal Bank of Scotland to come clean and tell us the truth about the number of transactions in all the branches in Scotland and throughout the United Kingdom. It is a disgrace that RBS has not released the full figures and I stand here asking RBS to do so publicly: do not hide behind so-called commercial confidentiality; it simply will not wash.

Will my right hon. Friend give way?

One last time.

I have been contacted by extremely vulnerable constituents regarding the closures that are planned for Strathaven and Lesmahagow, including those with learning disabilities and disabled members of the community who find it difficult to travel or use the internet. Does my right hon. Friend not think that RBS is letting down the most vulnerable in our constituencies?

My hon. Friend makes a valid point. That brings me back to why I hope RBS reflects on what it has done. It has simply gone too far. Let us work together to protect the interests of our communities, and particularly the vulnerable citizens within them.

RBS has given the figures for three branches in my constituency. It should publish the others and let us see the full picture of the demand for branch banking. Let us have an honest debate. RBS needs to be transparent. I can tell RBS that people in all the affected communities are angry and want it to engage properly with them. RBS has simply not thought this through properly.

There has been no public consultation on the closure plans. Why not? Yesterday in the Sunday Mail, RBS stated:

“We are not required to consult with communities in advance.”

It went on to say:

“We find that many customers wished they had used other ways to bank earlier when they get comfortable.”

The sheer arrogance of those statements is breathtaking. Let me say clearly to RBS: customers want to use branch banking; stop spinning and treat customers with respect.

I thank the Unite union, which has been in touch with me over the past few days. I state publicly that I will work with Unite and the workforce to seek to limit job losses. Here again, RBS has to come clean. I am indebted to an RBS whistleblower who has contacted me in the light of public statements that RBS has made. It is claimed by RBS that the full-time equivalent job losses in Scotland are 165. I am informed that the actual number of workers being cut is 321. I am told UK-wide the figure is 1,446 jobs against the 685 on a full-time equivalent basis that has been published. The expected redundancies across the UK in a worst-case scenario are 971, including 97% of the 216 customer service officers in the branches affected; 86% of the 246 associate personal bankers; 84% of the 126 customer service managers; and 49% of the personal bankers. It is clear that the chances of redeployment within the RBS network will be slim for a lot of staff members.

Those figures are in a paper forwarded to me in a document about restructuring the branch network. I have told RBS I have been given details of the figures contained within the report. RBS is not only turning its backs on its customers—it is turning its back on its staff members. We are talking about valuable jobs in the rural economy. We are talking about a loss of opportunities for young people in rural economies. The leaked report goes on to say:

“Our personal banking strategy is to give our customers choice and offer outstanding service that is effortless every day and brilliant when it matters.”

I do wonder who could write such meaningless management-speak. When branches are closed, there is a withdrawal of service. Spinning to say outstanding service is being delivered is simply unacceptable. RBS has even had the gall to say customers would get a better service. How? One suggestion from RBS is to use post offices. In Munlochy on the Black Isle, RBS shut its branch. “Not to worry,” it said, “you can use the post office.” The only problem was that the post office shut six months later. Somewhere along the line, RBS has to take responsibility for its own customers and not pass the right of service on to a third party. They are RBS customers.

The intended closure of the branch in Castlebay in Barra would be funny if it was not so serious. There will be no bank on the island of Barra. It reminds me of the line from “Whisky Galore”, the Ealing comedy: “There is no whisky.” The cruelty in this case is that there will be no bank. The journalist Rita Campbell of the Press and Journal made a trip last week from Barra to the nearest bank in Lochboisdale, a journey of 62 miles, including a six-mile ferry crossing. It took seven hours and 10 minutes to reach Lochboisdale and return to Barra. How can RBS treat its customers in such a shameful way? RBS must reverse the closure of the branch in Barra and elsewhere.

We must also press the UK Government to accept their responsibilities. Collectively, we own RBS. Above all else, RBS was saved to provide banking services to our communities. We paid a heavy price to bail out RBS. There are taxpayers in every community that is threatened with the ending of banking services. Can I ask the Minister what notice the Government were given, as the majority shareholder, of the closure plans? What discussions have the Government had with RBS? Will the Government summon Ross McEwan, the chief executive officer, to the Treasury and tell RBS that in the interests of all our communities the closure plan must be stopped? It will not wash.

The Government have to accept their responsibilities as the majority shareholder. I say to the Minister: do not rise to your feet and tell us it cannot be done, it is a commercial decision and the Government cannot intervene. The Government have intervened before. When it was announced that Stephen Hester, the previous CEO, was leaving RBS, the then Chancellor George Osborne was interviewed on the “Today” programme and said the following:

“Let’s be clear, it was a decision of Stephen Hester and the board but, of course, as the person who represents the taxpayer interest, and we have got a huge stake in the Royal Bank of Scotland because the previous government put a huge amount of taxpayers’ money into it, of course my consent and approval was sought.”

Just dwell on the words:

“my consent and approval was sought.”

It was right for the Government to give their approval on a member of the management team and it is right for the Government to give their approval or not on decisions that would remove access to branch banking from many of our citizens. It is clear that the Government can act. The Government must act. A failure to halt is a failure to act in the national interest and the interest of our citizens. It would, Minister, be an abrogation of responsibility.

Yesterday, the Secretary of State for Scotland—I can see him sitting on the Front Bench, and I welcome him to the debate—was quoted in the Sunday Mail. He said:

“Branches are a lifeline for many people, especially in rural areas. RBS needs to remember its responsibilities to customers and reconsider these harmful moves.”

On this occasion, I agree with the Secretary of State, and I hope that he will join me in asking the Government to take their responsibilities seriously. If the office of Secretary of State for Scotland has any authority, this call from the Secretary of State must result in a halt being called to the plans. Does the Secretary of State for Scotland have any authority with the Treasury? Will the Minister act tonight? Call in the RBS management and put a stop to these closures.

Tonight, the Minister has it in his gift to listen to these calls and act. Stand up and be counted or, like RBS, the UK Government will be turning their back on our constituents.

I commend the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) for securing the debate. The strength of feeling generated on both sides of the House by this announcement from RBS is evident from the high attendance at a relatively late hour.

I will happily give way, but obviously the right hon. Member for Ross, Skye and Lochaber has taken 22 minutes of a 30-minute debate, so time is somewhat limited.

I appreciate the fact that the Minister has given way, and he is absolutely right to focus on the interest across the House. The leader of the Scots Nats has tonight managed to unite this House—Unionist, nationalist, Conservative and Labour—on an issue that affects all our constituents, from the highlands and islands to the west of Ulster. Many banks are closing. Ulster Bank, which is of course a sister company of the Royal Bank of Scotland, is closing many branches. Is it not time for the Government to put in place a special measure to have a national review of where banks that they own—and that the taxpayer owns—are situated?

The hon. Gentleman is right; this is an issue on which many Members of the House from all parties have strong feelings. Indeed, I have been lobbied extensively by many of my colleagues who are in the Chamber this night, including in particular my hon. Friends the Members for Berwickshire, Roxburgh and Selkirk (John Lamont) and for Ochil and South Perthshire (Luke Graham), who have been vociferous in speaking up for their constituents on this issue.

As my hon. Friend knows from our representations, we do not believe that the Royal Bank of Scotland is serving our constituents or its customers appropriately. Furthermore, the mitigating factors it is proposing, such as offering digital online services and post office services, do not work in our communities where the broadband is poor and the post offices are too small or insufficient for our local population.

As a rural constituency MP, I recognise the importance of bank branches in our communities and, specifically, many of the challenges of travel in rural communities. Of course, RBS will have noted the comments about the staff impact made by the right hon. Member for Ross, Skye and Lochaber, and he will be well aware that RBS has a duty to consult its staff. I expect that it will be keen to respond to him on the specific allegation he made in the House this evening.

I am alarmed this evening to hear the number of staff who might be made redundant, but I am also concerned about the staff in the remaining branches. There have been six bank closures in my constituency and businesses are contacting me to say that in the local branches they are now going to they are waiting more than 30 minutes to get to the counter. Obviously, there is now a massive impact on the staff in those branches. Does the Minister share my concerns?

The reality is that the picture will be more nuanced, because RBS is investing more than £8 million in its branch network this year. It is investing more than £11 million next year. Indeed, it is relevant to point out in response to the concerns raised that customers will often vote with their feet. The right hon. Member for Ross, Skye and Lochaber mentioned Kyle twice. I understand that there is a branch of Lloyds 0.05 miles from the bank that is closing there, and another branch within walking distance of the one that is closing in Aviemore, which he also mentioned.

We heard earlier that the right hon. Member for Ross, Skye and Lochaber had united the House, and he has, but it would have been nice if he had taken some interventions from Conservative Members, because I think that they might have been helpful. The Minister mentioned customers voting with their feet. Does he agree that it was deplorable of RBS, when it was closing the Forres branch, to tell my constituents to go to Nairn, only for the Nairn branch to be closed by RBS a few weeks later? Surely, that is deplorable behaviour, which no one can accept.

As my hon. Friend will know, the decision made by RBS was an operational decision, independent of the Government. It is the RBS board that makes the strategic and management decisions, including decisions in respect of its network. That framework has been endorsed by the Labour, Liberal Democrat and Conservative parties.

I am going to make some progress. The right hon. Member for Ross, Skye and Lochaber has left me only three more minutes in which to do so.

On 4 December, I had a conversation with the Scottish Government Minister for Business, Innovation and Energy, in which he recognised that the branch network decision had been a commercial decision. In its manifesto, written only this summer, the SNP said that RBS should be returned to the private sector and should deliver as much value as possible to the taxpayer.

Will the Minister give way?

I will give way one last time.

I shall be very brief. A number of Members of Parliament find it very difficult to engage with RBS and NatWest about closures when they tell us that it is all about footfall—about the number of people who go into their branches. Employees tell us one thing and the banks tell us another. Perhaps the Government would have more influence than us in establishing what the true figures are. Let them mislead Ministers publicly rather than us privately: that would be helpful to all Members.

My hon. Friend refers to the true figures. The banking market is changing. As he will know, the use of cash has fallen by a fifth in the past decade. The number of branch visits has fallen by a third since 2011. More than a third of UK adults regularly use banking apps. Three fifths of customers are interacting with their current accounts via mobile apps, and more than 600,000 customers over 80 are registered with internet banking. The House must address the reality that the way people bank is changing, and that trend will accelerate as Open Banking comes on stream in January and FinTech progresses. I know from my recent visit to Edinburgh that a number of additional FinTech jobs will be created. The issue is not whether it is possible to prevent changes in the banking market, but how the impact on RBS customers can be mitigated.

As for the representations made by Members, RBS has given six months’ notice—more than the three months required by the access to banking standard—to hold discussions, in which I urge Members in all parts of the House to engage, about how facilities such as mobile banking can be used to mitigate some of the impacts. One of the key sources of mitigation is the post office network, in which the Government have invested significantly: 7,000 more branches have been modernised in the past three years alone. There are more post office branches than there are branches in the entire network of all the banks combined, and 99% of retail customers and 95% of commercial customers now have access to banking services at post offices. One form of mitigation will be for customers to vote with their feet—[Interruption.]

Order. Members must stop shouting. The Minister is just finishing his speech.

I was left a bare eight minutes in which to respond, Madam Deputy Speaker, and I have been generous in taking interventions. I have very little time in which to make some final progress.

At the time of the autumn Budget, recognising the importance of this issue and the concerns expressed by Members on both sides of the House, I wrote both to the Post Office and to UK Finance, which represents banks, to further raise public awareness of the banking services offered by the Post Office and, indeed, to ensure that we receive value for money from the £2 billion that the Government will have invested in the post office network between 2011 and 2018. The Government also introduced the access to banking standard, to ensure that customers are properly notified of the alternatives that are available. It is important for us to use the time that we now have in the six months between this announcement and branch closures to ensure that customers can use other services or use post offices as an alternative.