My Lords, the Government are disappointed by the withdrawal of Barclays from the renegotiated banking framework. None the less, the new banking framework will enable customers to access their cash from 27 high street banks. The Government will continue to ensure that communities receive support and have choice about how they manage their finances.
I thank the Minister for his reply. Rural communities rely on access to finance, but in many rural areas where there is poor broadband or weak mobile signal, online banking is impossible. This is a fundamental issue for our rural areas. What representations have Her Majesty’s Government made to Barclays Bank, and what will we do if other banks decide to follow its lead?
The right reverend Prelate asks an important question: does this set a precedent? I certainly hope not. I would like to think that customers affected will reflect carefully on whether they should continue banking with Barclays. I am fully aware of the issues faced by those in the rural communities of which he speaks.
My Lords, is the noble Lord aware that other countries, including France, the Netherlands and New Zealand, have saved much of their rural post office network by supporting their role as deliverers of financial services? Is he further aware that there are now more post offices in rural England than all the banks put together? In some areas of rural England, only post offices are serving the financial needs of local traders. Will the Government please offer some financial or fiscal incentive for Post Office Counters Ltd and all the banks to work together to ensure that the future of their local traders and communities is safe?
The noble Lord is correct. Since 2010 we have invested £2.3 billion in the Post Office network, stabilising the number of banks. There was a 27% decrease in the 10 years before 2014. The decrease since then has been only 1%—the money is making a difference.
My Lords, does the Minister agree that the idea of changing a bank is a bit more daunting than he has suggested? Particularly if you are struggling on a daily basis to stay out of the red, the idea of going to a new bank can be intimidating. It seems that some banks are interested only in big cashless customers who have large deposits and not really anybody else. Will the Minister raise these concerns with Barclays Bank and ask it to think again? The banks are making life difficult, not only for people in rural communities but for those in inner cities and the peripheral schemes where paying cash machine charges is extortionate.
The noble Baroness and the right reverend Prelate asked what representation we have made. My right honourable friend the Secretary of State for Business, Energy and Industrial Strategy has spoken to Barclays in words of only one syllable, I am afraid. She has made this point very clear to them: this behaviour is not acceptable. This is not about corporate banking; this is about rural communities and, sometimes, these are the most important aspects of rural communities.
My Lords, I understand that some of the major banks are making it extremely difficult for small organisations to retain their bank accounts when, for instance, they change their bank mandate. Can the Minister tell the House whether the banks have a responsibility to serve their communities in this way, or will these accounts be treated in the same cavalier way that Barclays has treated them in rural communities? If they are, where will these organisations go for their banking?
The noble Baroness puts her finger right on it. Banks are not just about serving customers; they are about serving communities as well. When small organisations are unable to secure that banking, they will struggle. If she has specific examples, I welcome them being raised with me and I will raise each of them directly with the individual bank concerned.
My Lords, does this Question not also raise the problem about access to cash more generally? I am sure the Minister is familiar with the Access to Cash review. I wonder whether the department is in a position yet to respond to that. In that excellent review were six recommendations, which focused on the fact that new fintech is often designed for mass markets and does not reach out to the poor, those who live in rural communities and the vulnerable. Of the recommendations, the fifth and most important was for a clear government policy on cash, supported by a joined-up regulatory approach that treats cash as a utility, which I think is what the noble Lord was saying at the end. Is this in progress?
My Lords, is the Minister aware that we inquired into this subject in our report on financial exclusion a couple of years ago? When faced with the question of closing banks, the banks virtually unanimously said, “We consult widely”. We did not find one single branch that had been left open as a result of consultation. They are merely ticking boxes. They then faced us with the fact that the post offices would take on their business, and now they are withdrawing it. As much as we condemn it here, we have to do more than that. The banks are letting communities down and it is no good simply condemning them. Will the Government not take some action that forces them to be part of our communities?
The noble Viscount is right: a consultation matters only if its results are taken forward. I will reflect carefully on what he has said. I believe there is an obligation that should fall on banks to respect their customers and treat them with the decency they deserve.
My Lords, while we can deprecate the actions of certain banks in this sense, should we not also congratulate those commercial and retail outlets, such as petrol stations and others, that are installing ATMs and providing these services in rural areas as well as in urban ones? I think particularly of the Co-op and other owners of garages around the country, which are doing just that.
My noble friend is correct. Banking is changing and we need to reflect on how our future banking needs will be met: perhaps not through the traditional means of marble-fronted buildings but in a much more diverse way, both in reality and online. We need to consider how banking will look in five, 10, 15 and 20 years’ time.