The petition of residents of Corwen,
Declares that the loss of local branches of national banks is having a dramatic effect on local communities; further that it is leaving towns and villages cut off from local financial services; further that the loss of banking services in Corwen is forcing people to travel to other towns to use their banking services; and further that this is resulting in the reduction of visitors to Corwen and a decline in income for local retail businesses.
The petitioners therefore request that the House of Commons urges the Government to develop a community banking system incorporating local government legislation in order to ensure residents of local villages and towns such as Corwen continue to have access to a bank or financial services.
And the petitioners remain, etc.—[Presented by Susan Elan Jones , Official Report, 16 November 2016; Vol. 617, c. 355.]
Observations from the Economic Secretary to the Treasury (Simon Kirby):
The Government thank the hon. Member for Clwyd South (Susan Elan Jones) for her petition on bank branch closures.
The Government are sorry to hear about the disappointment of the residents of Corwen at bank branch closures in their local vicinity. Although we can understand their concerns, decisions on opening and closing agencies are taken by the management team of each bank on a commercial basis. Banking service providers will need to balance customer interests, market competition, and other commercial factors when considering their strategies and the Government do not seek to intervene in these decisions.
However, the Government believe that banks should act in the best interests of their customers and continue to serve the needs of the consumer as well as the wider economy. In March this year, the major high street banks, consumer groups and the Government signed up to an industry-wide agreement to work with customers and communities to minimise the impact of branch closures and put in place alternative banking services. This protocol commits the banks to:
work with local communities to establish the impact of the branch closure, prior to its closure
find suitable alternative provision to suit individual communities
put satisfactory alternative banking services in place before a branch is closed. Options for this will include free to use cash machines, the proximity of alternative branches, and Post Office branches and mobile banking arrangements.
The British Bankers’ Association appointed Professor Russel Griggs to carry out an independent “one year on” review of the protocol. The review was published on 10 November and made a number of recommendations to improve how the Protocol operates. The Government welcome the review and are pleased to see the industry commit to further improvements to protect those affected by closures. While the decision to close a branch remains a commercial judgement for banks, the impact on communities must be understood, considered and mitigated where possible.
Corwen residents may find it helpful to know that many bank account providers already have an arrangement with the Post Office to provide access to their bank accounts. The arrangement allows customers to withdraw money, deposit cash and cheques and check balances at all 11,500 Post Office branches in the UK. While the range of services offered by the Post Office may be more limited than that offered in a traditional bank branch, the services provided through the Post Office’s extensive network ensures that essential banking facilities remain available in as many communities as possible.
The Government recognise that more can be done to improve the consistency of banking services that are available to customers at Post Office branches. In 2014, the British Bankers’ Association and the Post Office began negotiations to agree a standard set of services. The agreed services will be made available to banks’ personal and business customers at Post Office counters across the country. The negotiations are ongoing, but the Government consider completion of that work to be a priority.
If other banks in the wider local area have more extensive facilities, residents may wish to consider moving to an alternative bank; if so, they may be interested in using the Current Account Switch Service (CASS). The switch service is free to use, comes with a guarantee to protect customers from financial loss if something goes wrong, and redirects any payments mistakenly sent to the old account, providing further assurance for customers. This means that customers are more able than ever to hold their banks to account by voting with their feet, and that banks are incentivised to work hard to retain their existing customers and attract new ones. There is more information about CASS at: www.currentaccountswitch.co.uk.