Closure of Santander Banks

Motion made, and Question proposed, That this House do now adjourn.—(Iain Stewart.)

I thank those Members who have stayed behind for this important debate. The Lanark High Street branch of Santander is just one among 15 branches in Scotland that will be closing their doors. The Lanark branch will close on 4 July this year. That news has come as a shock to many of my constituents who rely on their local branch.

For the people and businesses in Lanark who depend on the face-to-face service they get in their local branch, especially those who are elderly, vulnerable, or live in the rural parts of Clydesdale, the nearest bank is in Lanark, so the closure of the branch is not just an inconvenience but a blow to the community, bringing new challenges for a town centre that is already struggling. Many local businesses depend on having quick access to their bank, and the closure will cause difficulties for many businesses in not only the town centre but the surrounding areas. For some customers, without the branch there will be no reason to visit the town centre at all, which is ultimately bad news for the local economy—footfall in shops, restaurants and cafés on Lanark High Street will drop.

I am sure I am not alone in this House in trying to tackle the decline of town centres, and I am sure many Members will agree that bank closures will only worsen the situation on our high streets.

I congratulate the hon. Lady on securing this debate. For customers, as she says, it is not just the banks but the other shops on our high streets that will be affected. Taking away this resource does not help older people or people who do not want to use internet banking.

That is exactly why I have secured this debate. It is important that the Government provide answers on how they hold these businesses to account, especially big businesses like Santander.

I have continued to campaign actively on town centre decline and regeneration in areas such as Hamilton and Carluke. The consequences of further closures of banks and high street stores in the Clydesdale area cannot be overestimated. The wider impact they would have on Lanark are all too obvious and cannot go unrecognised.

Santander wrote at the end of last month to inform me of the decision to close its Lanark branch, with the rationale being that its internal review had found the branch to be no longer viable. However, anecdotal evidence suggests that it had already removed key services such as specialist mortgage advice and financial advice from many of its branches during the internal review.

According to the letter, 89% of customers using the branch are also using additional ways to complete their banking. That includes 26% using another Santander branch and 53% using online or mobile telephone banking. I fully accept that the changing nature of the digital economy and the increased use of online banking have changed how we use branches. However, Santander’s own figures suggest that it is content to let down the nearly three quarters of customers who are unable to travel to another bank and who rely on that service, and the nearly half of customers who do not or cannot access their bank online or through their phone.

The Santander branch on Renfrew High Street is the sixth bank branch to close in the last three years across Renfrewshire. Does my hon. Friend agree that it is simply not good enough for banks to up sticks and leave without taking account of the digital and geographical constraints that are a reality for far too many of our constituents?

I wholeheartedly agree with my hon. Friend, who drives home the point of this debate. In my constituency of Lanark, the rural issues go to the heart of why these closures are so impactful and, ultimately, why we are calling on the Government to do something about it.

This Government have stood on the back of the financial industry for years, yet they have done little to regulate it, to the point where banks are now closing right, left and centre and nothing is being done to improve local economies. None of the measures being taken has considered the impact on rural economies.

I am grateful to the hon. Lady for securing this important debate. It has been announced that the Santander branch in Middleton in my constituency will close in July and that customers can use the Middleton post office, but the Middleton post office is earmarked for closure as well. I am grateful to her for bringing up the effect this is having on our town centres, which are dying.

The hon. Lady is absolutely right, and this is why we are drawing this issue to the Minister’s attention. I am sure he is cognisant of these issues, and I am keen to hear what he intends to do about them.

As I explained earlier, I am using Santander’s own figures, which show that 10% of customers exclusively use face-to-face services in the branch. They also suggest that Santander has used this internal review to make a series of decisions at board level that will have a huge impact on local economies across the country and on the livelihoods of the staff working in the branches marked for closure.

It is regrettable that Santander chose not to undertake a full consultation with staff and the local community. Instead, it will follow a process of writing to customers to tell them when their bank will close, without adequately consulting the customers and staff who will be hardest impacted by the changes. Clearly, this decision has been taken behind closed doors, in the hope that no one would try to challenge it. I have spoken about only one story of a bank closure in my constituency, but this picture has been replicated all across the UK, as we have heard from other hon. Members.

Santander has announced its plans to close 140 branches across the UK, of which 15 are in Scotland. I wrote to the Secretary of State for Scotland, who is in the neighbouring constituency, so he is only down the road, asking him to meet a cross-party delegation of MPs to discuss how he and his Treasury colleagues could come together to mitigate the effects these closures will have in Scotland. Unfortunately, he has written to me today declining our invitation and laying the responsibility squarely with the Treasury, so it is all on the Minister here today—he can blame his pal. I hope he will have no more platitudes for me today and will give my constituents real answers on how the Government intend to hold big business to account for its rupturing impact on local economies and towns.

I commend the hon. Member for Lanark and Hamilton East (Angela Crawley) for securing the debate. Just before I came over from the Treasury, I noticed that there will be a three-hour debate on the matter next Thursday, in which rather more Members will be able to contribute. I know that bank branch closures can be difficult for the communities affected, and particularly for the most vulnerable customers. The Government are keenly aware of that, and later I will go into more detail on what support is in place for those customers. After lobbying from SNP Members, I had the opportunity to visit Scotland last autumn, when the Royal Bank of Scotland was carrying out a review, so I am very engaged in this matter.

It is clear that the way we bank is changing. More and more of us—the process is very rapid—are choosing to bank online or through an app, and fewer people are choosing to visit a traditional branch, as we used to. Between 2011 and 2016, branch usage declined by 42%, whereas mobile banking usage increased by 354% between 2012 and 2017. That is unprecedented consumer change, and banks have obviously had to adapt to remain competitive in the circumstances. That adaptation has involved virtually all the main banks taking tough decisions about their respective branch networks.

Decisions on branch networks can be unpopular, and I understand why, but they are not ones that the Government can make. To be fair, the hon. Lady recognised that in her observations on the Santander decision. Branch network decisions are commercial decisions for the bank’s management team, and the Government do not intervene in them because we believe that commercial firms are best placed to make commercial decisions. The flexibility to respond to changes in the market is what makes the UK’s financial services sector one of the most competitive and productive in the world.

The closure in my constituency will be the fourth bank that my town has lost, and the town has a high proportion of retired people who do not bank online or use their phone for contactless payments. My mother will never bank online. It is really two decades too early to withdraw these banks. Their ATMs go, too, so there is a problem for people who want cash in our town.

I will talk in a few minutes about the ways in which we have intervened to try to find solutions to the circumstances in which the hon. Lady’s constituents find themselves. As I am sure those Members who have spoken are aware, the UK financial services sector is a whole-UK phenomenon, and Edinburgh in particular is important to financial services. The Government want to protect the sector, which is why we do not make the direct intervention that some may be looking for.

The Government firmly believe that the impact of branch closures should be understood, considered and mitigated, where possible, so that all customers, wherever they live, can continue to access over-the-counter banking services. The first step is to ensure that customers feel informed and supported when a branch closes, which is why the Government support the industry’s access to banking standard. All the major high street banks have signed up to the standard, which commits banks to a number of outcomes when a branch closes. First, they commit to give at least three months’ notice of a closure and explain their decision clearly; secondly, they commit to consider what services can still be provided locally, and communicate alternative ways to bank clearly to customers; and thirdly, they commit to ensure that support is available for customers who need extra help to bank online or, where that is not possible, to access services at the local post office. The standard is not just a checklist that banks need to go through; it is about being considerate of customers’ concerns when a branch closes.

In the case of Santander, I am pleased to inform the House that it took a number of steps when announcing the restructure of its branch network. Not only did it proactively contact all customers, as per the requirements of the standard, but it set up a dedicated phone line for customer queries about the changes for the duration of the closure programme. Furthermore, its branch teams will be proactively contacting known vulnerable customers to ensure that they are properly supported and advised on how to continue to bank locally. This includes all customers over the age of 75 who have visited the branch in the past 12 months, as well as those customers who have sight impairments or mobility issues, power of attorney, or are known by the team to be vulnerable. Where needed, this support can include: walking customers to the post office to introduce them to the post office team and demonstrate how they can carry out their banking; introducing them to staff in a neighbouring Santander branch; or helping customers to switch their account to another nearby provider. The teams will also take the time to talk to vulnerable customers about how they bank, changing the frequency of their statements and ordering cash cards, and to demonstrate how to use ATMs and contactless cards.

I appreciate what the Minister has said about the measures that Santander has taken. It is very noble of the bank to offer to walk someone to a post office—or to take them on the train to Glasgow in my case—but I am not hearing from him what the Government are doing to regulate financial services when they continually close branches across the UK. That is what I want to hear from the Minister.

I promise the hon. Lady that I will come on to talk about that. It is about the relationship between the banks and the post office in the instance where it is the last bank that is closing. I am not here to defend the commercial decisions of banks, but I do think that the measures taken in this case look quite comprehensive with respect to dealing with vulnerable customers.

I am grateful to the Minister for giving way. He paints a rosy picture of what Santander is doing to help vulnerable customers, but the fact is that it told my constituents in Middleton that they could bank at Middleton post office, which is earmarked for closure and will be moving into a branch of WHSmith, so in my constituency it most certainly is not in touch with what is going on in the town centre.

I am not seeking to paint a rosy picture. I am setting out plainly the facts about what the bank has undertaken. I obviously cannot account for the way in which every single branch has handled things. I note the hon. Lady’s observations and I am very happy to look into what she says, or to make a link to Santander for her.

I hope that the hon. Lady will agree that this support demonstrates that there is a commitment to the spirit, not just the letter, of the standard, which is warmly welcomed. To ensure that all banks meet the requirements of the standard, the Lending Standards Board monitors and enforces it. Last year, it published its annual report on banks’ adherence to the standard and found that, overall, firms’ engagement was positive and genuine. However, there were some areas where banks could do even more, and the Lending Standards Board is using the full range of tools and sanctions at its disposal to work with banks where they fall short.

I thank the Minister for giving way. I wish to raise again the kind of work that Santander is doing in introducing people to post offices. Is he aware of the appallingly low rates of pay given to sub-postmasters for doing banking work, especially in places where there are no banks left?