The next item of business is a members’ business debate on motion S4M-10936, in the name of Neil Findlay, on RBS takes communities for granted. The debate will be concluded without any question being put.
Motion debated,
That the Parliament notes the proposed closure of Royal Bank of Scotland (RBS) branches in Armadale, Fauldhouse and Harthill; is concerned at the apparent arbitrary nature of the closures, which are inconsistent and set by RBS alone; believes that there has been no engagement or consultation with local communities or RBS’s largest shareholder, the UK taxpayers; understands that, by the end of the third quarter of 2014, RBS will have closed more small branches, over 150 in nine months, than it has closed since it acquired NatWest in 2000; is concerned that there are no guarantees that the criteria for closure will not be broadened to include larger branches in future and sees the RBS commitment of two years ago to maintain branches where they were “the last bank in town” as completely worthless as these branches identified for closure are indeed “the last bank in town”, and notes calls for the RBS management to immediately withdraw its plans to close these branches.
12:36
The Royal Bank of Scotland is a bank that we, the taxpayers, own and control, with an 81 per cent stake; a bank that we had to bail out to the tune of an eye-watering £37 billion; and a bank, of course, where Fred Goodwin—I do not think that he is Sir Fred any more—and his band of merry men, because it was largely men, almost brought a once great institution to its knees through reckless mismanagement. They played fast and loose with customers’ money and took the bank—a bank that previously had a global reputation—to the brink. It is a bank that caused panic among its loyal customers, who feared that their money would no longer be there; it is a bank that almost failed.
I would have thought that the senior management of that bank would now be doing all that it could to win back the faith of its customers; all that it could to apologise to the people who have loyally banked with it; and all that it could to show humility for what it did—but apparently not.
This year, the true extent of the RBS closure programme was laid bare when it was revealed that RBS has earmarked 154 branches for closure this year—roughly a whole 5 per cent of its network. As of today, more than 100 local branches have already been closed. What we have seen, not just in my area but across Scotland, is branch after branch after branch being pulled. In April, 44 branches were earmarked for closure, from Castletown in the north, near Thurso, to Berwickshire in the south, as well as branches in England and Wales. Of those 44 branches, 14 were the last bank in town, leaving local people and local businesses with no banking facilities.
That is significant, because in 2010 RBS published a glossy “Customer Charter” in which it gave a series of long-term commitments. In commitment 9 it stated:
“We pledge to stay open for business if we are the last bank in town”
and also noted:
“We have identified over 100 ‘Last bank in town’ locations where we will continue to provide local banking”
facilities.
In “Our Customer Charter: The first progress report—February 2011”, RBS boasted:
“We have continued to provide banking services in 146 locations where we are the last bank in town.”
This year, however, the commitment was ripped up and put into Fred Goodwin’s famous shredder. What a way to treat loyal customers, many of whom, along with their families, have been customers for generations or have run businesses that have banked with RBS for decades. The “last bank in town” commitment is not worth the paper that it is written on, and neither is the RBS customer charter.
In West Lothian, the Fauldhouse and Armadale branches are closing—the Fauldhouse branch locked its doors for the final time on Tuesday. It was the last branch in town, and now a community of 5,000 people no longer has a bank. Armadale, which is a growing community of 10,000 people, with a school, a nursery, a new railway station, jobs and retail facilities and 2,000 new houses being built now has no bank in town for people to use.
Just over the border in North Lanarkshire, the village of Harthill no longer has a bank either. So much for the promise to keep the “last bank in town” open. Of course, RBS says, “Oh, it’s okay—we will replace that provision. You can go online and use digital banking.” However, for many people in those communities—certainly for many older people—that is not an option.
To some of the communities, RBS says, “It’s okay, because we will have a replacement service—there will be something else.” In some communities, there is Post Office provision, but in other communities the provision is a twice-a-week, half-hour mobile service. We have a better service than that from the local ice-cream van.
Over the summer, I, along with my United Kingdom Parliament colleagues Graeme Morrice and Michael Connarty, met senior RBS officials. We put forward the social and economic case for keeping the branches open, and pointed out the needs of the community and of business.
All that we got was an attempt to hide behind statistics that showed a fall in customer visits. RBS conceded that the fall in customer numbers at the branches that it was closing was lower than the average fall elsewhere, yet some of those other branches were being kept open. The officials would not tell us what their strategy was, or describe their plan for rolling out the closures, but they said that RBS would be continuing the programme.
When I asked them whether they had consulted customers and whether they would come to a public meeting and speak to people in the community, their answer was no. Instead, all they did was send a letter out advising customers that their bank would be closing in a few months’ time. They did not talk to people or address local concerns; there was just a “Dear customer” letter saying that the bank would close.
I am afraid that we have now reached a situation in which RBS is Longniddry no more, Cumnock no more, Lochwinnoch no more, Harthill no more, Armadale no more, Fauldhouse no more—and many other communities up and down the country no more.
That is not the way that large companies that have received eye-watering levels of public money should be treating the people whose taxes bailed them out. RBS appears to have failed to learn a single lesson from the banking crisis.
12:43
I thank Neil Findlay for bringing the debate to the chamber. I realise that his motion focuses primarily on West Lothian and North Lanarkshire, but he has mentioned a wider spread, and the scenario that he describes is very similar to the one that we experienced in Shettleston in June 2013 and in Bridgeton—also in my constituency—in March 2013.
I suppose my constituency has roughly the same population as many other members’ constituencies, but we have only one RBS branch for the whole constituency. The Shettleston branch was relatively small, but it was very busy: I used it on several occasions and almost invariably had to stand in a queue before being served.
As Mr Findlay said, RBS argued that more people are banking online and fewer people are using the branches. I accept that that is a trend. However, most people still need to go into a branch from time to time. That is especially the case for folk who are less comfortable using the internet, banking by phone and using other methods. Such folk tend to be in poorer areas.
Neil Findlay was being somewhat generous to RBS in his motion when he referred to
“the apparent arbitrary nature of the closures”.
I do not think that the closures are arbitrary. I think that they are targeted at places where people have less money.
It might be argued that RBS is a business and must follow the profit. However, I have a few problems with that. First, businesses are allowed to have a conscience. Corporate social responsibility is seen as a positive attribute, which makes companies more sustainable in the long term.
Secondly, as Mr Findlay said, the Royal Bank is owned by the public and owes its continued existence to the public’s generosity. Some of my poorer constituents—I suspect this applies to some of Mr Findlay’s constituents, too—have gone through considerably hard times in recent years because of the stupidity of decisions by RBS and other banks.
Thirdly, banks have continued to pay excessively high salaries and bonuses. They seem able to cut some costs and not others.
Fourthly, as the motion says, there has been
“no engagement or consultation with local communities”.
That was our experience in Glasgow too. The first public statement that we got was not that the bank was thinking about closing the branch but that it had already decided to do so. The bank agreed to meet me and other elected members, not to discuss the options but to explain what it was about to do.
I was so annoyed by the decision and by the way in which it was carried out that we set aside party differences in the east end of Glasgow, for once, and had a joint Labour and Scottish National Party campaign, which was headed up by Sandyhills community council. However, I am afraid that even then the bank did not listen.
On a personal note, I have got fed up with the larger banks for a number of reasons and have switched my main account to one of the smaller banks, which should probably remain nameless but has its only Glasgow branch in my constituency. I urge other members to think about switching, too.
I am not arguing that RBS should not make itself profitable; a loss-making bank is not much good to any of us. I am arguing that banks need to look at the bigger picture. They are, to a large extent, a public service, albeit one that is generally privately owned, and serving the public must come into their thinking somewhere. That should surely mean a little more listening and a little more consideration for our poorer citizens and communities, be they in West Lothian, Glasgow or anywhere else.
12:47
Ross McEwan, the chief executive of RBS, told us:
“We need to remember—and then never forget—that the customer is why we are in business.”
He should try telling that to customers in Lochwinnoch, in the east end of Glasgow, in Armadale, in Fauldhouse and in all the other communities where the last bank in town is being withdrawn. Neil Findlay mentioned the worthless pledge that RBS made. Where was the pledge when Ross McEwan said what he said?
Lochwinnoch is a mixed community. People think that it is an affluent community, and many people who live there are relatively affluent, but there are also many people in Lochwinnoch who are elderly and are on lower incomes. Those people rely on having access to a bank.
As members have said, figures have been given on the reducing number of customers. We have been told that there are alternatives, because more people use online banking. However, internet access in Lochwinnoch is poor and online banking cannot always be relied on. We are also told that the Post Office offers an alternative service. However, the Post Office is being relocated to a Spar store, where an extremely limited service will be on offer.
What about access to the nearest alternative branch, whether it is provided by RBS or any other bank? The nearest settlement is Johnstone, which is more than 7 miles away. Lochwinnoch also has an extremely poor bus service so, for those without a car, it is difficult to get to an alternative branch. In addition, for those without internet access, it is difficult to access a service; even for those who have such access, it is still at times difficult to access a service.
I suspect that many of our constituents across Scotland would accept that there must be service cuts if there was a real problem and everyone faced those cuts equally and they together shared the pain and the grief. However, that is not the case. At the same time as pennies are being saved by branch closures, over the past four years RBS has paid out bonuses of £3.4 billion. A taxpayer-owned bank can afford to pay £3.4 billion in bonuses but cannot use some of that money to keep branches open in communities such as Lochwinnoch.
That same chief executive, Ross McEwan, is in line for a £1 million-a-year share allowance that sidestepped the European Union bonus cap, which effectively doubles his salary. He also received shares of almost £1.5 million as part of a £3 million signing-on deal when he was first hired from the Commonwealth Bank of Australia. We are not all in it together. It is not right that my or other members’ constituents should be asked to bear the burden, so that a handful of people can continue to exploit the generosity of not just the customers, but the British taxpayer.
What we are seeing is just cynicism and a continuation of the greed that brought the British banking system to its knees. We are not seeing a level playing field where people are sharing out problems and responsibilities. RBS has not consulted, as Neil Findlay said; it has ignored its customers, despite Ross McEwan’s promises and commitments. We are seeing a taxpayer-owned bank cynically treating its customers badly, caring not one jot about the consequences.
I hope that, even at this late hour, RBS will think again. However, if it chooses not to do so, the very least that it can do for the communities is to look at what it is doing with its assets and see how some good can be put back into the communities that it is damaging.
12:52
It is fair to say that any branch closure is a matter of regret because, no matter where the branch is located, that has an impact on customers, staff and the wider community. The smaller the community, the deeper the impact is likely to be. Therefore, any institution, whether it is a bank or any other organisation, must think carefully about the consequences of any closure and, if it decides to close an office, must consider how it can ameliorate or reduce the consequences as much as possible. It should be an absolute last resort for a bank or other institution to close its offices, particularly in a smaller community where it might well be one of the last remaining institutions in the town or village. Therefore, I agree with some of the sentiment that has been expressed. However, some parts of the debate have been unfair towards the bank; other parts have ignored the realities of what happens out there on the ground.
John Mason said that he accepts that times and technology are changing but that he wants branches to be kept open, so that—I wrote down what he said—people have a place to go to “from time to time”. It is not possible for institutions to keep every branch or office open so that people have a place to go to from time to time. Although I do not want to see any closures in my region or, to be candid, in any other region, we must also listen to what is happening on the ground.
There has been substantial change in how banks and other businesses interact with their customers. It is not right to say that such organisations ignore their customers; they must follow the trends in what their customers are doing. The statistics that I have been given are from the bank—obviously I cannot verify them myself.
Will the member take an intervention?
In a second, Mr Henry.
The bank says that since 2011 branch transactions are down by 30 per cent and online transactions are up by 232 per cent. If those statistics are correct, then any business or institution would surely have to invest more of its resources into what the 232 per cent are doing, which in RBS’s case means that it will inevitably invest less in branches if their footfall is dramatically reduced.
Does Gavin Brown not agree that a very small part of the massive bonuses to which I referred would be enough to keep open the branches that are threatened with closure? Would doing that not be justified and would it not enable RBS to keep its pledge to keep open the “last bank in town”?
I have not seen inside the bank’s books and I do not know the internal workings of the bank or how much is saved from every individual closure. I suspect that Hugh Henry does not really know either. It is very difficult for an MSP to suggest that they know better than an organisation how to run that organisation.
Will the member take an intervention?
I think that I have only a minute left, Presiding Officer.
You can take the intervention if you want—it is up to you.
As long as I am given some additional time, I am happy to give way to Mr Findlay.
Mr Brown was speaking about customers. I can quote directly from RBS’s progress report on its customer charter, which states:
“Dear Customer,
Last June, we made a public commitment to becoming Britain’s most Helpful Bank. As part of this, we launched our Customer Charter, a set of 14 promises based on what you - our customers - told us was important from your bank. To show we’re taking this seriously, we promised to be transparent and share progress along the way. So here we are: our first official progress report.”
The bank then goes on to list all the successes in implementing the charter, with big ticks for being the “last bank in town”. What does Mr Brown say about the bank stating that it is listening to customers, then completely ignoring everything that has just been said?
You can have extra time, Mr Brown.
Mr Findlay is perfectly entitled to express the view that the bank completely ignores customers, but I do not think that any organisation that wants to succeed can ignore customers and I do not accept that the bank does entirely ignore customers. Mr Findlay is perfectly entitled to his view on that; I simply disagree with him on it.
In my final minute, let me just take issue particularly with the heading of the motion, because I think that Mr Findlay has just used a lazy soundbite for it, to be candid. I was aghast at John Mason describing it as “generous” to say that RBS takes communities for granted. I do not think that that is correct, certainly not from my experience of speaking with the bank’s employees and from looking at the work that they do in communities as employees of one of the largest employers in the country.
On a personal level, I have seen the work that the bank has done with the Prince’s Trust and Entrepreneurial Spark—eSpark—and have observed the RBS moneysense tutorial that goes on in secondary schools, when bank staff take time out to go and try to help pupils across the country. RBS staff make donations through the payroll and give up time to volunteer, and there was RBS support for the recent STV appeal.
I think that anybody who saw what is going on across Scotland on the ground would think that it was unfair to say that RBS takes communities for granted. That is where I disagree with some parts of the motion.
12:58
I speak in support of Neil Findlay’s motion. Having lodged a motion regarding an RBS bank closure in my constituency, I will address the local circumstances, but many of my concerns apply to the closures that we are seeing across Scotland.
The Royal Bank of Scotland has earmarked more than 5 per cent of its branch network—154 branches—for closure this year. Although customers have been told that branches will close, there has been no formal announcement of the programme. The closures include branches where RBS is reneging on its promise—yes, that promise—to keep the “last bank in town” open. Will these be the last closures? Who knows? No commitment has been made to the remaining 2,000 branches. With the bank’s recent announcement of a third successive quarter of profit and with a pre-tax profit of £4.2 billion forecast for the year to December 2014, customers and staff are understandably angered and incensed by closures and job losses against a backdrop of rising profits and share prices.
RBS is 81 per cent publicly owned and it is not unreasonable to expect it to be controlled and operated in the public interest. Like other members, I find it extremely difficult to see that that is the case when it is the public and the staff, not the 19 per cent of other investors, who are disadvantaged by the closures.
The bank has a responsibility to be prudent with its finances after Fred the Shred’s reign, but surely that needs to be tempered with corporate social responsibility and by taking into account the interests of the public and the staff. The bottom line should not be solely about profit and the share price. We would not think that that was ethical in any other company, so it is much less excusable when the company is public property, having been rescued at public expense. I am sure that there are circumstances in which we would be prepared to wait a little longer to recover that public investment for the sake of other priorities, such as financial inclusion.
In my constituency, the impending closure of the Cleland RBS branch means that constituents will have to travel further afield for banking provision. As alternatives in the area do not offer the same range of services, closure will significantly add to costs and inconvenience for local people and businesses. I have been in touch with RBS, which initially gave me a picture of a bank branch that had little custom. It transpired that the picture was somewhat busier than it had first been painted. I have called for an extensive consultation and questioned the rationale and adequacy of the alternative facilities that will be available to the people of Cleland. RBS has now said that it will provide a mobile banking service once a week, but that is a poor substitute. It also underlines RBS’s determination to press ahead with the closure.
I have sought to engage with RBS to discuss what can be salvaged from the closure. I have asked about the possibility of the building being made available for community use, perhaps to host a credit union or another voluntary organisation. RBS is willing to explore that possibility but it insists that part of the discussion should be about its responsibility to the shareholders. The bank needs to understand and accept that the public are the majority shareholder and that they should be the priority. At the very least, the bank should help to rescue something for my constituents who, through their Government, rescued RBS.
13:03
I thank Neil Findlay for lodging the motion. We have debated the issue on several occasions. John Mason reminded us that he raised the issue of a branch closure in his constituency, and alluded to the fact that he did so on a cross-party basis. The parties who are represented in today’s debate have made a number of valid and salient points.
I confirm that the Scottish Government shares and understands the concerns that have been expressed today about branch closures in our local communities. Bank branches have always played a huge part in communities throughout Scotland and we rely on our banks so that we can conduct our daily lives and businesses and pay our bills. We are clear that customers must be at the heart of what banks do. The decision to close branches will affect everybody in the local community, as Mr Findlay outlined and as other members said when they talked about branch closures in their areas. Mr Henry, Mr Pentland and Mr Mason gave specific examples and there are many others around the country.
I want to say a bit about the staff who are employed at the branches. For many people, they are the branch. When I ran my business, the Victoria Road branch of the Bank of Scotland was excellent. I can still remember Dorothy, who was one of the friendliest people I ever encountered; she cheered me up on many a day of travails of running a small business in Scotland. The staff have played an integral part and I pay tribute to them. I understand from RBS that the redundancies resulting from this programme of closures have been on a voluntary basis.
The bigger picture is that the bank is one of the major businesses in Scotland. It employs 11,500 people, supports 122,800 businesses and has nearly 2 million personal customers. As a matter of balance, it is reasonable to say that the bank contributes some positives, such as the eSpark programme and the microfinance fund. It plays a part in financial education in schools and gives grants to 47 charities. Its staff have donated nearly £1 million through payroll donations and raised a lot of money for the STV appeal, which helps children. We all recognise that there are positive points. However, the focus of this debate is on branch closures. I will make a few remarks on that topic.
Will the member take an intervention?
I want to make some progress. I am just coming to the meat of the topic, but I thought it only fair to set the matter in context and I have done so.
RBS says that the decisions that have been taken have not been taken lightly or arbitrarily. When a decision is made to close a branch, there is a three-month period between announcement of the closure and the closure itself. I was keen to understand whether the process was of the nature of a consultation or engagement. My understanding is that the three-month period is not really to decide whether a decision should be overturned, but rather to allow customers and staff to deal with the consequences of closure, to give customers of the bank an opportunity to make other arrangements and to assist them there anent.
The period of consultation has been mentioned. As Mr Findlay rightly said, it is absolutely essential that, when the Royal Bank of Scotland or any other bank decides to close branches—others do, too; the RBS is not alone—customers’ interests are placed at the heart of the issue. A time period is required. I want to know from RBS whether it is sure that all its customers can make other arrangements within three months.
Mr Henry suggested that the opportunity be given to explore the possibility of buildings’ use by local credit unions as an alternative. I will pursue that suggestion with the Royal Bank. I chair a credit union working group and I think that credit unions need more help from the British Bankers Association and the Government to continue to expand their operations throughout the country. Many, though not all, credit unions are effectively operating as banks. However, they cannot get access to a sort code so they cannot offer proper banking facilities. That is an important hidden and detailed point, which is directly relevant to the debate. If customers wish to make alternative arrangements, it should be not just with the Royal Bank but with others. I will most certainly pursue that with the Royal Bank.
Most members recognise that action needs to be taken to deal with the financial damage that the banks sustained as a result of some monumental failures of decisions in relation to investments, about which we all know and about which none of us can do anything. The banks have to deal with the consequences of that. As all members have recognised, that means that difficult decisions have to be taken. However, it is correct to point out, as Mr Findlay did, that the customers’ interests are paramount.
Increasingly, customers are using other facilities, such as mobile apps. The Royal Bank has informed me that more than 2.1 million customers a week use the RBS mobile app, with more than 50 per cent of customers actively using mobile phone and online banking. RBS expects that 4 million customers will be using those facilities by the end of 2014. In other words, this is a rapidly changing scenario. The uptake of online and mobile facilities is massively increasing and, at the same time, the use of traditional bank branches is massively reducing. That is the reality. I think that most, if not all, members recognise that that means that, as customer practice changes, so, inevitably, difficult decisions will have to be made.
As for the three specific branches highlighted in the debate, I understand that the decline in transactions since 2011 has been 16, 22 and 25 per cent respectively at Armadale, Fauldhouse and Harthill. One point that I think Mr Findlay raised and which I will pursue with the Royal Bank is the suggestion that the percentage reduction in footfall at those branches was somewhat less than at other branches that had not suffered closure. I will specifically write to the Royal Bank after this debate to get an answer for Mr Findlay on that point. Points of that nature made by members in the chamber deserve to be answered by the bank. I am not here as a critic or defender of the bank; I am here to answer questions and ensure that this Parliament and elected representatives get responses.
Does the minister agree with me and Mr Henry that if the asset is considered as the community’s he should insist that the Royal Bank takes on board the public rather than the private priority?
I am strongly of the view that the Royal Bank must consider the interests of its customers, the community and its staff in all these matters. We take that very seriously, and I think that the member’s point is well made.
I do not want to shirk the point about bankers’ bonuses. I think that that is one of the topics that most irks the public in Scotland and the UK. It has existed for several years now, and I do not think that the public feel that the response to it has been satisfactory. Quite what that response should be is a legitimate matter of debate, but my personal view is that as long as the matter remains apparently unresolved the rehabilitation of the reputation of banks will be a difficult task.
In conclusion, Mr Swinney, the First Minister, the Deputy First Minister, I and other colleagues in the Scottish Government engage with the Royal Bank of Scotland on all sorts of matters, and we have raised the issue of branch closures with it at such meetings over the piece. We welcome the alternative investment in mobile van branches; some of the alternatives that the Royal Bank is coming up with; and the increased use of post offices as alternative locations. We are pleased that the bank is engaging in consultation and, as I have undertaken to members, I will raise their points on specific matters after this debate. I am determined to continue to engage closely with all the main banks in Scotland as they seek to implement fundamental change and seek to restore customer trust and confidence.
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