Read my article on bank closures for the Yorkshire Post here.
As the argument over bank closures resurfaced in Parliament, two glimmers of hope appeared. One from RBS and one from the Government.
Yorkshire small towns have good reason to worry as the rate of closures increases in 2018. Bawtry and Hornsea are set to lose their last bank. Wath-upon-Dearne lost its last two banks in 2017. Guiseley will have lost four of its five banks. Penistone will be left with no banks, and just one building society.
Since 1989, around 300 bank branches across Britain have closed annually. In 2015, the Government announced an “Access to Banking Protocol,” a few months before that year’s general election. Despite the Protocol, over 1,000 branches had closed in 2015 and 2016, and a record 802 branches in 2017.
The accelerating pace of closures appears relentless. In November 2017, RBS served notice that the busy towns of Thorne and Bawtry NatWest branches will close; a story repeated across Yorkshire. Yorkshire is the UK’s fifth largest region with over 1million people living in outlying rural communities.
It is now clear that the Access to Banking Protocol laid out a timetable for consultation about impact and the provision of alternative banking, but no mechanism to stop a branch closing. Communities have no more chance of stopping a closure today than they did in 2015.
Government Ministers say it “It is a private matter; it is a commercial matter” and don’t even collect statistics on closures or distribution of branches. It is as though closures were an inconvenient truth.
The banks would have us believe that this is a story of enlightened pensioners managing their ISAs and direct debits on their smartphones. Yet 5million British people don’t even use the internet.
I’m not nostalgic, nor opposed to telephone or smartphone banking. But the selective data RBS-NatWest use to justify closures in my area is meaningless. RBS reported that 88% of Bawtry customers and 86% of Thorne customers now bank in other ways, and that only 48 customers in Bawtry and 69 in Thorne attend the branch on a weekly basis.
Sounds like sleepy hollow? Anecdotal perhaps, but in mid-week, mid-January, a quiet post-Christmas week, a queue formed outside of Bawtry NatWest before it opened at 10 am. At 10.45am customers were still queueing more than 10 deep in the bank, with several counters in use.
When asked how many transactions took place at the Thorne and Bawtry branches in the first hour of each day, RBS refused to disclose. It was “commercially sensitive” information. As was the proportion of pensioner customers, how many transactions took place at each branch in the past year, or why neither branch opened on a weekend (which might improve footfall)?
Consultation over closure must include providing meaningful information, even if it demonstrates that small businesses, pensioners, or the community generally, may need branch services more than RBS care to admit.
And what of shared premises? RBS advise me that the banking industry reached the conclusion that the post office is now “the shared premises”. Ridiculous! Instead of small counters in corner shops, why cannot post offices be located in secure bank premises? Why can’t several banks have staff on different days of the week, sharing overheads and creating a community banking hub? Now that is shared premises.
Banks frequently lobby MPs about their latest wheeze to provide for financial inclusion, about wanting to do more in schools and communities to give people the skills beyond pressing a clicking on an app, but to build real financial literacy. Yet, little effort is made to attract young people into branches to help them with financial decisions. Indeed, many people do not have a bank account at all, and there remain many who still do not know quite how to go about getting a mortgage, run an ISA, save regularly, or reduce debt.
One would think that banks did not really want to foster demand for real branches, so the case for closure is made for them. They are creating a self-fulfilling prophecy.
I mentioned glimmers of hope. There are. First, RBS has announced a stay of execution for ten Scottish branches, some small communities, like Comrie, in Perth and Kinross, a community of around 2,000 people and one of the highest proportion of pensioners in Scotland. The key criteria for staying open was that customers would travel more than 9 miles to the nearest branch.
Time for Yorkshire’s outlying towns to marshal their arguments. Bawtry’s 4,000 residents will travel 10 miles! For Hornsea’s 8,000, it will be 12.9. We cannot let the banks claim that the average customer lives just 2 miles from a branch. What good is the “average customer” to 1million people in rural Yorkshire?
The second ray of light was the Minister’s promise to look at the banking protocol. So they should. The Government cannot be neutral on closures. Their mandate derives from the British people, not UK Finance.
If the Government wishes to support our small towns, banks must be sustained. Despite a tough few years for many Yorkshire towns, some are seeing a renaissance, new businesses, and younger entrepreneurs. They need advice, loans and local banking. Losing the last branch makes no sense.
If we want to halt the growing gap between city and small town Britain, we need to keep bank branches open in a more creative and sustainable way.
The Government needs to act before branch networks are a thing of the past.
Rt Hon Caroline in the Member of Parliament for Don Valley
and former Minister for Yorkshire.