Westminster must stop bank closures

Following a damning report by Holyrood’s economy committee I had the opportunity to speak in a Scottish Parliament debate highlighting the negative impact of branch closures on communities across Scotland.

Figures show that the number of bank branches reduced by a third across Scotland between 2010 and 2017 and, while the UK Government is responsible for the regulation of banking services and owns a controlling stake in RBS, it has failed to use its influence to represent Scottish communities and reverse these closures. Perhaps this is no surprise, though, given the Tory obsession with Brexit at any cost, to the detriment of the communities they are supposed to represent.

In 2017 RBS announced a series of branch closures that would impact upon every part of Scotland and would result in the loss of the last branch in town for many communities, contrary to the commitment given by RBS in 2010. In my constituency three branches of RBS – in Alloa, Bridge of Allan and Dunblane – were earmarked for closure.

Various explanations have been offered by the banks to account for these closures, on the whole pointing to a decreasing need for face-to-face banking interactions. They argue that simple banking transactions have decreased as cash transactions have been replaced by the use of debit cards and that technological advances in the industry have increased the viability of automated bank transactions.

However, it is clear that little thought has been given to the impacts that these closures have upon communities. The report highlighted that the worst impact of bank closures will be felt by the most vulnerable members of our society, for whom going into a branch may be the only feasible way to conduct their banking.

It also found that bank closures across Scotland have had a negative impact on people and businesses across the country, with communities experiencing a reduction in footfall for businesses and tourism on their high streets, and the claims by the banks that the closures were driven by demand are not backed by evidence, considering customers were not consulted.

As has been the case across Scotland, the reaction in the Clackmannanshire and Dunblane constituency has been overwhelmingly negative –and that includes amongst business owners who rely on the convenience of local banking services and from customers who want or need to continue to carry out their financial business on a face-to-face basis.

It is clear that the failure of banks to consult with communities, particularly in the case of RBS which is majority-owned by the taxpayer, before making definitive decisions regarding closure of an unprecedented amount of branches lies at the heart of the discontent expressed.

Decisions to close important local branches within our communities have been made in an effort to increase profitability at the expense of faithful and loyal customers and this represents the clear failure of a current system and a stilllargely unregulated banking system – the legacy of a Labour government which not only rewarded the likes of Fred ‘the Shred’ Goodwin but patronised him through the honours system for his sterling efforts.

The committee’s report correctly identifies that regulation of the banking sector is reserved and that the Scottish Government is unable to compel banks towards any particular remedy or course of action and I fully endorse the committee’s recommendations, many of which call for action to be taken by the UK Government or by the banking sector in response to the issues identified.

The worst impact will be felt by the most vulnerable members of our society