The next item of business is a members’ business debate on motion S6M-11518, in the name of Rhoda Grant, on the Bank of Scotland ending mobile branch services across Scotland. The debate will be concluded without any question being put.
Motion debated,
That the Parliament regrets the recently announced end of mobile branch services from the Bank of Scotland to several towns and villages across Scotland, including several in the Highlands and Islands region; understands that the end of these services will take effect in May 2024; further understands that, although the Bank of Scotland notes that there has been low use of its banking vans, some rural residents will be left without local banking services and will have to travel several miles to reach such services; believes that this will disproportionately affect elderly people and disabled people who potentially cannot travel or access mobile banking services, and notes the calls for the Bank of Scotland to reconsider these plans or implement alternative plans so that everyone can access suitable bank services easily.
12:48
The Bank of Scotland is ending mobile banking branches in 50 locations across Scotland, 13 of which are in the Highlands and Islands. Those mobile banks were a compromise when local branches were closed, and yet they, too, are closing.
In Caithness, there are only seven branches left of any bank at all. Since 2015, Caithness has seen a 72 per cent decline in branches. It is the same story elsewhere. In Moray, there has been a 66 per cent decline. In Ross, Skye and Lochaber, there has been a 65 per cent decline. In Inverness, Nairn and Badenoch and Strathspey, there has been a 50 per cent loss. Indeed, across the whole of Scotland, 60 per cent of branches have closed since 2015.
When branches were closing in rural areas, we warned that mobile banking vans were not an alternative, yet they were the compromise that was agreed at the time. Mobile banking branches are not great. They are in a village only for a short time, sometimes only for an hour at a time. That time is not always the right time for people who have to work, who have caring responsibilities or who are dependent on public transport. Who wants to queue for a mobile bank in the cold and wet, and in the winter? There is no disability access, and there is no privacy for anyone who is using those banks. It is no surprise, therefore, that they are used only by people who really cannot access banking facilities in any other way, and those people are now being abandoned by the banks.
Lairg is losing its Bank of Scotland mobile bank, and the nearest alternative branch is Golspie, which is 18 miles away—that is a 36-mile round trip. Lairg is often seen as a hub for the smaller communities surrounding it—places such as Kinlochbervie—and people from those communities will have even further to travel. In addition, if someone is trying to get to Golspie from Lairg by public transport, that is not easy; I believe that there are only three buses a day that run between the two places. That will be the case for many of the locations that are affected, and some will even have no public transport at all.
These are the banks that were bailed out during the banking crash by the people—the very people whom they are now abandoning—and yet they renege on their promises and pass the buck.
The banks say that there are alternatives. They suggest online banking, but in many remote and rural communities, there is no broadband, so people there cannot access online banking. Many people are uncomfortable with using online banking because they are not confident that the banks will deal with scams. Age UK estimates that 40 per cent of over-75s do not use the internet at all and so will not access internet banking. There are also people for whom doing things online is absolutely inaccessible. They include those who, for reasons to do with skills, disabilities and costs, cannot access online connectivity. The Digital Poverty Alliance, a group of charities that was formed to tackle digital exclusion, estimates that as many as 11 million people in the UK struggle with technology.
The banks also suggest using the post office, but access to the post office cannot be guaranteed. It is often very difficult to identify a business in a local community that will take on the post office role, and now, with the Horizon scandal, it will be even more difficult to identify people who would be willing to take on that role. It is poorly paid, and it is taken on only as a way of increasing footfall in an existing business.
The banks talk about LINK, PayPoint and cashback at local businesses. However, those very local businesses are dependent on the banks in order to have cash to be able to give cashback, and cash machines are even less likely to be available in those areas.
That has a huge impact on rural communities, and it makes doing business in rural areas more difficult. There is also a security risk—we hear that, as businesses become more cash based, they become a greater target for theft. There is anecdotal evidence that there are more break-ins in areas where banks have shut, as it means that people carry more cash because they cannot access money quickly.
We are all concerned about depopulation in rural areas. If these services are discontinued, it will make it harder to do business. That makes it harder for people to live in rural areas, which adds to depopulation.
The member is making an excellent speech. In America, in the 1970s, it was recognised that banks would withdraw from the poorest and most rural communities in a practice known as redlining. At the time, the Carter Administration introduced the Community Reinvestment Act, which enabled banks to be forced to pay into supporting community co-operatives and community banking services. Does the member feel that similar provision is needed in this country to ensure that we maintain the footprint of banking services across the country?
Yes—that is something that has to be explored, because people need access to banking services, and they should not be left to flounder in the way that they currently are.
I know that the Financial Conduct Authority has been given greater powers to protect access to cash in the United Kingdom. I also understand that the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy is to meet with the FCA to explore ways in which we could tackle the issue, and I hope that, in summing up, he will update us on what is possible in that regard.
I would also be interested if the minister, in summing up, would tell us what interaction he has had with the bank and whether it is looking to change its mind or have a change of heart on the issue, because it is so important. Withdrawal of the services is simply unacceptable. Rather than cutting them, the bank should be looking at ways of serving its customers better.
The Bank of Scotland plans to withdraw the mobile banks by May this year. I urge it and Lloyds Banking Group to think seriously about whether that is really the way to serve their customers. I urge them to cancel the closures and reinstate local banking in our communities.
12:55
I congratulate Rhoda Grant on securing this debate. I will be brief in my remarks.
I support Rhoda Grant’s motion and completely agree with her that mobile banking services are highly important. She highlighted very well the issues that are faced in remote and rural areas. The Bank of Scotland’s decision to remove mobile banking services will leave many people in some of our most remote and rural communities, including across Dumfries and Galloway in my South Scotland region, without direct access to banking. It is also clear that the decision will disproportionately affect elderly people and disabled people. I join Rhoda Grant and others in calling on the Bank of Scotland to revisit the decision and ensure that people in rural areas are not penalised.
I have been contacted by many constituents who are extremely concerned about the withdrawal of the Bank of Scotland services across Dumfries and Galloway, including the mobile branch services. Constituents report that they feel that it is a betrayal of the promise that the Bank of Scotland made when it previously closed branches, citing that mobile services would be made available. The withdrawal of the services will leave many older and vulnerable people, including those who do not and cannot use online banking, without access to services.
Mobile branches were introduced in many areas that faced the closure of traditional bank branches, and they visit many communities fortnightly. The Bank of Scotland says that most people use the service to pay cash in or out. That shows that the mobile branches are incredibly important. The services are vital for communities that have already suffered many closures. We are seeing that in towns across Dumfries and Galloway.
Connectivity remains a major issue for many people who live in rural and remote parts of Dumfries and Galloway. For example, if a constituent in Wigtown or Whithorn is forced to travel to Newton Stewart in order to bank, it is a one-hour round trip. If they do not have a car, it is a three-hour round trip, given the infrequency of local buses.
The banks must treat people in rural areas with equity and, above all, respect. As I indicated, mobile branches were already a compromise, and there are issues to do with their accessibility. Rhoda Grant highlighted that. For example, my mum couldnae manage the steps on to the mobile service and she was told to bank on the pavement. When she told me that, I found it unbelievable.
I have written to the Bank of Scotland’s public affairs department with my constituents’ concerns, and I have requested an urgent meeting to discuss how the bank will support people from rural areas to access lifeline banking services.
In closing—I said that my remarks would be brief—I support Rhoda Grant’s motion and I call on the Bank of Scotland to revisit the decision.
12:58
I commend Rhoda Grant for lodging her motion and congratulate her on securing the debate. She outlined her constituents’ concerns and, like her, I have constituents across my region who have concerns about the withdrawal of mobile banking.
Over the years, I have been involved in supporting a number of campaigns to try to save bank branches in different parts of my region. I well remember standing in the square in Aberfeldy on a very cold day a number of years ago with a large group of people from the local community who were trying to ensure that the last bank branch there remained open. Unfortunately, it did not. At the time, the sweetener was a promise—Emma Harper made this point, too—that, if the physical bank branch closed, a mobile bank would be provided as an alternative. It is very concerning that, just a few years on, that alternative is being withdrawn.
The issue affects a wide range of communities across Mid Scotland and Fife. The list of communities across Perthshire that are currently visited by the Bank of Scotland mobile branch includes Aberfeldy, Bankfoot, Errol, Scone, Methven, Dunning, Blair Atholl, Auchterarder, Luncarty, Coupar Angus, Murthly, Stanley, Kinross and Killin. A huge chunk of the population in the area that I represent will be affected.
I have called on Bank of Scotland to rethink that. It has said that it is looking to use community bankers as an alternative at three local sites—Aberfeldy, Auchterarder and Kinross. We await more details about how that will operate in practice, but I am not convinced that it will be a satisfactory alternative.
The wider context is that there have been changes in banking practices. That is understood. A lot of the bank branches that ended up being closed had very low footfall as people moved to banking online—as many of us have done. However, banking online is not for everyone, as Rhoda Grant has fairly said. Some people are physically unable to bank online because of particular disabilities, and others, for various reasons, do not trust the internet or do not have access to the internet because of the quality of their local broadband. Others—perhaps because they are elderly—are vulnerable and just do not have the capability to bank online. There are also small businesses that still deal in cash and that want to have somewhere to physically bank their cash, which they are unable to do online.
It has been suggested by the banks that close their branches that post offices should be used as an alternative. However, as has already been pointed out, post offices, too, are disappearing in many of our towns and villages. In Aberfeldy, which I referred to, there is currently an issue about the future of the post office, because the owner wants to relocate it from its current premises to other premises that he owns in the town, and it is not clear whether permission for that will be forthcoming from the Post Office. There is therefore a concern over whether that facility might also be lost.
The key point is that there has to be access to comprehensive banking services for all sections of society, including those who struggle to use online banking. If banks are to withdraw the services that currently exist—whether in physical branches or through mobile banking—they need to make sure that an appropriate alternative is in place for their customers. I appeal to them to do that. At the very least, they need to rethink the withdrawal of mobile banking.
13:02
I thank Rhoda Grant for bringing the debate to the chamber. As she and others have said, when branches started to close, we were all promised that the last branch would be kept open; when the last branch closed, we were all told that there would be at least a mobile branch; and now, for bank users in Fortrose, Kingussie and Beauly, even that is going. This year, on 13 May, the mobile branch will no longer frequent Fortrose; on 28 May, Kingussie will be without banking facilities; and, on 29 May, Beauly will also be left in the lurch.
Often, in such rural areas, the distance to the next automated teller machine or banking facility is huge. Who remembers the threat about five years ago to close the branch on Barra, with the local users being told that the closest ATM was about 15 miles away—ignoring the fact that it was on the other side of the water?
Cash still matters. It is always going to matter. The key fact is that it matters more to those who are least able to travel to the new banking sites. That includes small businesses that are trading hard to stay afloat. They have no time to travel for up to an hour to get to their closest bank to deposit cash.
It is the same for families and households, for whom every penny matters in order to make ends meet. It has been well documented that those who are most affected by poverty and those who deal the most with fragile finances will be left behind by these decisions.
Last week, as I queued in a supermarket, which shall remain nameless, to use an automated checkout, I was struck that one of those was free but was card only and, of the six people waiting, I was the only one who could use it.
I join others in appealing to the banks to think again. We have in front us the figures, provided by the banking companies, about how usage is declining. However, I totally agree with Rhoda Grant that, so often, that is because they are open for only an hour or at inconvenient times—in other words, they are open to suit the banks and not the users. It is therefore no wonder when footfall declines because of that very reason.
Given that I have stood where the cabinet secretary is right now, tearing my hair out, it is important to say that there is a challenge for the Scottish Government, recognising that banking is completely reserved in relation to accountability and enforcement.
That is illustrated by an example in Aviemore, where there are plans for a banking hub to fill the gap that has been left by the closures of the RBS and Bank of Scotland branches. The town has been classified as not rural enough to secure the support and authority to go ahead with a banking hub, but that hub is essential. Although there is a post office, anyone who knows Aviemore will know how popular it is among tourists. Particularly during big events, the post office sometimes has to take deposits or provide cash in the region of thousands of pounds.
LINK and Cash Access UK have assessed Aviemore. I met them just before Christmas and, although they were very helpful, they concluded that, according to their rules, they could not classify Aviemore as being able to open a banking hub. It might be worth reminding members that the nearest bank is therefore in Inverness, which is at least 45 minutes’ drive away, with limited public transport.
The Financial Conduct Authority is currently consulting on the rules surrounding rurality and where communities can establish banking hubs. That consultation closes in February. My one ask in the debate is, in essence, an open invitation to everyone to respond to that consultation. I would also be grateful if the cabinet secretary could ensure that the Scottish Government responds to the consultation to appeal for further discretion in order to truly take into account the rurality and distances that many of our Highlands and Islands communities are grappling with. It is about ensuring that, where a community wants and comes together to open a banking hub—which, by the way, is not just a replacement for branches, but usually a replacement for the last branch, and now a replacement for the closure of banking hubs—the rules allow for that, rather than standing in the way.
13:07
I thank Rhoda Grant for bringing this important motion to Parliament.
Let us be absolutely clear: mobile bank branches were introduced into rural Scotland as a sop to cover up a deeply unpopular and widely opposed bank branch closure programme. According to the consumer organisation Which?, the Lloyds Banking Group, the owners of the Bank of Scotland, who are behind these proposals, has shut down over 1,000 local branches since 2015, 144 of which were Bank of Scotland branches. Another 16 Bank of Scotland branches are scheduled to close in 2024. So this latest sting, to withdraw these mobile banking services the length and breadth of rural Scotland, is nothing less than a double-cross—it is a con trick.
It is the job of this Parliament to remind the people who we are talking about today, so let us be absolutely clear on that, too. In the banking crisis, £137 billion of public money—of our money; of the people’s money—was injected in the form of loans and capital to stabilise the financial system, to support the banks, including HBOS, and to bail out their shareholders. On top of that, £1 trillion of public money—of our money; of the people’s money—was put up to provide shareholder guarantees. And on top of that, the UK Government bought shares—over 40 per cent of the shares—in HBOS and Lloyds TSB to recapitalise the bank and so rescue it from total collapse. That is who we are talking about today.
On top of that, as the National Audit Office has reported, even when those shares were sold back, brokered by Morgan Stanley, it was at a catastrophic loss to the public purse of between £3 billion and £6 billion. So these banks owe us in every sense, and that is why it is right that, today, this Parliament of elected representatives calls out the unelected bankers, bosses and bureaucrats who were responsible then and who are responsible now.
My friend is making a very powerful speech. In relation to his point about the main banks in the UK, does he note that the five main clearing banks in Britain account for 85 per cent of all current accounts whereas, in contrast, in Germany, there are 400 Sparkasse banks and more than 1,000 co-operative banks? Even if the powers of financial regulation are reserved, there is clearly an opportunity for us to further diversify the financial footprint in Scotland for the development of credit unions and other such co-operative organisations in Scotland.
Yes—I am greatly in favour of much more diverse ownership of the banking sector, as well as of the economy. That may take the form of co-operatives, mutuals and regional and publicly owned institutions as part of the tapestry of that.
However, let us deal with the situation as we find it. To the Lloyds Banking Group and its chair, Sir Robin Budenberg, one of the instigators who contrived the bank bailout scheme in 2008; to his deputy, Alan Dickinson, the chief executive officer of RBS UK when that bank collapsed and had to be nationalised; to Lord Lupton, the deputy chair of Baring Brothers bank when it collapsed, and a former Conservative Party treasurer; and to the rest of the executive and non-executive directors who are behind this shameful proposal, we say: search your conscience, do the right thing, do not come down with selective amnesia, do not abandon our oldest neighbours, do not cut off rural Scotland, and do not desert our most vulnerable and our very poorest citizens.
Let me finish with the words of Jean-Paul Marat, which echo down the centuries:
“Do not be taken in when they paternally pat you on the shoulder and say there’s no inequality worth speaking of and no more reason to fight, because if you believe them they will be completely in charge in their marble homes and granite banks from which they rob the people”.
The people are not taken in. They are not going to be patted and patronised. They will not be robbed. They know there is a reason to fight this rigged economy, and fight it they will. I hope that, as they do that, they will get the full and unconditional backing of this Parliament.
13:13
First, I thank my Highlands and Islands colleague Rhoda Grant for securing this important debate on an issue that is having an impact right across our region, including in Fortrose, Beauly and Kingussie, as Kate Forbes mentioned and as I have highlighted in the past. There has also been an impact in Moray, and I know that my colleague Douglas Ross has secured a meeting with the banks to discuss the lack of and reduction in services there.
The debate highlights a worrying trend of vital services across a number of sectors being downgraded or withdrawn entirely from our rural communities. I remember, when I was a pupil at Orphir primary school in Orkney, how the bank van used to come round to the parish. In visiting the school, it distributed its largesse of branded piggy banks to excited schoolchildren. That was not without ulterior motives, of course, as we were encouraged to sign up and deposit our hard-earned pocket money into a Super Squirrel saver or some such account. That reflects a time, however, when banks were very much part of our communities, working to bring services locally and to deliver the best services for their customers.
How times have changed. I was part of the Parliament’s Economy, Jobs and Fair Work Committee, which looked into bank closures across Scotland in 2018. In the same year, I spoke in a members’ business debate that was secured by my former colleague Dean Lockhart, which focused on the removal of cash machines across Scotland, including many in rural areas.
More and more banking services have been removed from our local communities, with constituents being forced to move to the last bank in town. As Kate Forbes highlighted, though, that bank later goes as well. In the committee’s 2018 report on bank branch closures, we recognised the role of mobile banking, although not as a direct replacement for local branches. However, we also highlighted that
“most people did not seem to know exactly what services the alternatives to bank branches offer (such as post office, mobile banking vans), indicating perhaps a lack of adequate communication from banks in this regard.”
I have a similar motion in the system, for a debate raising the plight of customers of bank branches that have closed in my region, for example in Arran and Cumbrae. I thank members who have signed that motion. I encourage others to do so, so that we can continue the debate.
On the member’s point about communication, I add that the response to my communications with many of the retail banks has been completely insufficient. The notice given to members and the wider public has been extremely poor, and the justification and rationale provided have been completely lacking. Does Jamie Halcro Johnston agree that more needs to be done to ensure that all retail banks hold not only to their legislative and regulatory commitments but to their social and moral obligations to their communities?
I absolutely agree with Jamie Greene. One of my concerns is how the banks came to such decisions. Did they adequately promote the services that were available? If banks were to be honest, would they prefer to have fewer branches and have everyone banking via computers and smartphones? I recognise those concerns. Therefore, when banks argue that mobile services are not being used, I ask how those services have been advertised to bank customers and local communities, and how they have engaged with them to ensure that the timings and locations of the visits are what the communities need.
Who is being impacted most by the withdrawal of mobile banking services? As other members have done, I suggest that it is largely people who already have limited ability to access increasingly distant physical branches and also the many who find it difficult to use online banking, because of either the technical issues that members have highlighted or the fact that broadband can be so unreliable, as it is in parts of my region.
What happens when there is a problem with online banking, which is a situation of which I have personal experience? Despite my spending hours on the phone and online, my problem was solved only with a visit to an actual branch. Even with mobile banking vans, face-to-face engagement can often be key to solving issues or at least providing some reassurance for customers that their issue is being dealt with. For many, that possibility will now be lost.
There are, of course, other options. My parents have recently started using the pop-up post office in our parish, where limited banking services are available. However, that just highlights another issue that has already been raised in the debate. It is all very well for banks and others to suggest that services can be accessed at the post office, but it seems that, every week, we are losing local post office services across Scotland, often in some of our most remote and rural areas.
As I have said, such closures reflect a worrying trend that has seen a downgrading and removal of important rural services, which risks driving people away from our remote and rural communities. Although I know that times are changing, they cannot change so fast that communities, and in particular their most vulnerable people, are left behind.
13:18
I thank Rhoda Grant for securing this important debate and for highlighting the issue.
I echo calls from members across the chamber for the Bank of Scotland to reconsider its decision. Communities across rural Scotland will feel its impact disproportionately. Although my Shetland constituents will not be directly affected by the bank’s announcement, the decision contributes to the ever-growing narrative that because the population of our rural and island areas is decreasing, services can be cut under that guise. It is precisely those communities that most rely on such services so, when they are gone, the impact is deeply felt. We have seen the closure of local bank branches due to the decline in footfall and the increase in internet banking. Mobile banking was introduced decades ago, in recognition of the fact that people in rural and island areas could not easily access physical banks in towns and cities.
We now see a decline in the use of the mobile service, with fewer mobile services being provided compared with those from branches. Perhaps timings on the mobile route are inconvenient, as others have suggested, and perhaps online banking has become the default way for many to manage their personal finances. However, cutting the mobile banking service will leave those who do not or cannot bank online with more costly and time-consuming trips to do their banking.
I thank Age Scotland for highlighting its findings from the big survey 2023, which received more than 4,000 responses from over-50s in Scotland. A third of older people do not use the internet for banking, and only 29 per cent of over-65s said that they do so.
Internet connectivity remains an issue for many communities; it is not as reliable for some as it is for their counterparts in other parts of the country.
The big survey also revealed that 37 per cent of Shetland respondents did not use the internet for banking.
We know that there is greater reassurance in having an in-person service for those who are worried about scams or for people to feel more confident in dealing with personal finances. Scotland-wide, 43 per cent of older people who responded to the big survey 2023 had been targeted by a scam, and 39 per cent stated that the scam was something to do with accessing banking details or financial services.
Compared with the rest of the United Kingdom, Scotland has a high rate of people who mainly use face-to-face banking services. The figure is 34 per cent, compared with a UK average of 27 per cent.
Why should those who do not bank online be impacted in this way? My Liberal Democrat MP colleague Jamie Stone has been vocal about the announced cuts to services in the far north of Scotland, and has highlighted the impact on remote communities and older people. He said:
“It’s only a few years ago that the UK Government stepped in to pay out the banks. I feel that this development goes against any notion of public service, especially for the elderly and those living in the remotest areas.”
I could not agree more. Accessing a bank is a basic necessity. It should not be merely a case of putting profit before service.
It seems to me that it is always the most vulnerable and those who live on the peripheries whose service are the first to get the chop, yet the impact is significant. Greater investment in service provision needs to be focused in rural and island areas to improve connectivity, whether digitally or through improved transport links.
To conclude, communities can survive only where viable services exist to support them. If we continue with the narrative that a decreased population is ripe for service cuts, we will reap what we sow, and the vicious cycle and downward spiral will continue.
13:22
It is a pleasure to follow Beatrice Wishart. I agree with her. She was absolutely right to raise the issue of the rising tide of scams in this country. I also agree with Kate Forbes, who talked about the need for the regulatory framework to be revisited and for the realities of the geography of our part of the world to be a greater consideration of the FCA and, indeed, the banks.
I congratulate Rhoda Grant on bringing the debate to the chamber. It is vitally important that the issue keeps coming back to the chamber.
I want to mention one specific aspect of the debate in my remarks: the freedom to access and use cash. In my view, that is an essential right that people have in relation to how they manage their financial affairs. A preference to use cash does not make a person a dinosaur, and it is not only about being unable or unwilling to use technology; it is also about financial dignity and choice. It is about the fundamental right that we all have to choose how we deal with our financial affairs. I believe that we have a duty to conserve the right to access and use cash, that that right is under threat, and that the service reductions are undermining it.
The reality is that people who are as far removed geographically from banking facilities as many of our constituents are having their choices curtailed. They are being punished by geography. They are being severely disadvantaged because they live in a rural area or in one of Scotland’s many bank branch-free towns. Things are simply going to get much worse.
Richard Leonard will have to stay in his seat at this point, because I agree with what he said about the events of 2008. Many banks—the Royal Bank of Scotland and the Bank of Scotland—were bailed out by the taxpayer because of their incompetence, ineptitude and greed. Slowly but surely, those very banks are doing away with their branch networks.
That debt of obligation to the taxpayer has been conveniently shelved and forgotten—but not by the taxpayers. Rather than remembering that they owe the public a debt of gratitude for keeping their institutions alive when they nearly wrecked our economy, the banks across Scotland are slapping communities in the face by removing local access to cash.
It is right to recognise that it is cheaper for banks to operate digitally rather than physically. It is also correct to acknowledge that more people than ever before are using digital banking services. That said, those facts do not mean that digital banking is universal, or even that it should be universal. Rhoda Grant made an excellent point about connectivity, which is another issue that we should continue to debate and highlight in this Parliament. The removal of the physical banking infrastructure is leaving behind people who are not skilled in technology or who have no desire to become digitally engaged. It is also reducing the choice that people have over their own money.
Some people enjoy using cash. There are people of my generation and older who feel that tangible cash in the form of banknotes in their wallets or purses somehow gives them an additional level of financial freedom and security. The fact is that cash can be exchanged independently of the digital infrastructure, which is viewed by some people with suspicion and distrust, with regard to both cybersecurity and privacy. It is the right of the citizen to use cash.
Preserving the accessibility of cash is not about resisting progress but safeguarding inclusiveness and autonomy in personal financial management. Cash signifies freedom of choice and is a lifeline for certain demographics and for activities that are not best suited to digitisation.
Banks benefited from public support in their time of crisis, and yet their withdrawal of physical banking infringes upon the very communities that supported them when they needed the public purse to bail them out. Although digital banking offers efficiency, it cannot replace the versatility and dignity that cash grants to individuals. Upholding access to cash defends the rights of those who are less adept with technology and upholds the fundamental freedom of choice that we should all enjoy in relation to our financial matters.
Let us not forsake the accessibility of cash for expediency but strive for financial dignity through the choice of cash for all the people of Scotland.
I call Neil Gray to respond to the debate.
13:28
Before I take the opportunity to respond on behalf of the Scottish Government, I thank Rhoda Grant for lodging today’s important motion and members for contributing to an excellent discussion. There have been brilliant speeches from Emma Harper, Murdo Fraser, Kate Forbes, Richard Leonard, Jamie Halcro Johnston, Beatrice Wishart and Stephen Kerr, which have contributed to building a consensus through the Parliament on the importance of banks to local communities and on the social responsibility that banks have to those communities.
The Scottish Government is acutely aware of the frustration and concerns that are felt by many about the overall decline in in-person banking services across Scotland, which have now been exacerbated by the Bank of Scotland’s recent decision to withdraw its mobile banking branch services, which as Rhoda Grant described, were supposed to be a compromise. Murdo Fraser made that point, too.
I assure Rhoda Grant that the Government shares those concerns—as I do, not least because, as someone who grew up in Orkney, I understand the impact that that decision will have on the most vulnerable individuals in our rural and island communities, who might struggle to access alternative services.
Rhoda Grant gave the example of the 36-mile round trip from Lairg to Golspie to access services. It is an area that I know well, so I understand the challenges that she articulated. That example and the example of the three-hour round trip that Emma Harper gave and, even worse, Kate Forbes’s example of having to cross the water to access banking services, demonstrate a lack of consideration by banking institutions of individual needs, the geographical issues that people in remote, rural and island communities face and the impact of those closures.
The discussion that we have had today is essential because Lloyds Banking Group’s decision to withdraw services has not been made in isolation. It continues a trend that has been witnessed across the banking sector in recent years. Since 2015, more than 60 per cent of Scottish bank branches have closed and, since 2018, more than 20 per cent of Scottish ATMs have closed. Those numbers are consistent with those in other regions in the UK, and it would be naive to assume that no more closures will follow.
That is of great concern to the Scottish Government, as we believe that the ability to access cash is essential in our society and that in-person banking still plays an important role in our communities, not least because of the points that Rhoda Grant made about concerns for people with digital literacy challenges and for businesses, which need to be able to bank. I have raised those issues with Lloyds Banking Group, and I will go into more detail about that shortly.
As Kate Forbes set out, the closures have a clear social impact, because those who are most likely to be affected are those who are most likely to be in poverty. Our concerns are not solely about having access to cash and services, as Emma Harper said. The point has not been raised thus far in the debate, but bank branches are often seen as anchors in our smaller communities. That is something that I recognise from the closures in my constituency or in towns such as Kirkwall, where we have seen branches close. Their closure will have wider impacts on the dynamics of our town centres and high streets, particularly when it is the last bank in town.
Despite our concerns, the Scottish Government’s regulatory power to act—as Kate Forbes said, although I suggest that she has more hair to pull out than I do, sadly—is extremely limited, because financial services are wholly reserved to the UK Government. I was therefore pleased to hear Stephen Kerr make the point that not only is it important for us to debate the issue despite it being reserved, but it is critically important that there is change at the UK Government and FCA level.
The UK Parliament recently legislated in this space by passing the Financial Services and Markets Act 2020 . We are encouraged by the access to cash provisions that are contained in the act. Most notably, the act gives the Financial Conduct Authority, which is the regulator of financial services in the UK, greater powers to protect access to cash by ensuring the provision of cash deposit and withdrawal services for personal and business current accounts across the UK.
Kate Forbes pointed out that the FCA has launched a consultation, and I also encourage colleagues to engage with it. The Scottish Government will certainly engage with the FCA in the coming period. I will meet the chief executive, Nikhil Rathi, next week to discuss the issue. This debate is incredibly timely, because I will be able to raise the concerns that have been well expressed today directly with the FCA to explore what can be done to ensure that the unique banking and cash access needs of Scotland’s communities, people, small businesses and charities are being considered.
I hope that the corporate comms and Government relations people of our big banks are watching the debate and squirming in their offices, because the cross-party consensus is powerful. The regulation of the industry is a reserved matter, and I know that the debate has been had in Westminster and that MPs from all political parties will say the same thing. In his meetings with the FCA or in any conversations that he might have with the UK Government, can the minister press the importance of not just the removal of physical banking but the fact that, when banks take away the last opportunity for banking—mobile banking, which is the substance of the debate—and squander their obligation to communities, they will lose their trust and possibly even their business as a result.
I have met Jamie Greene previously, because he has raised some of the concerns with me directly, and I have been able to use them in my interactions with Lloyds Banking Group. I can give him and other colleagues the assurance that I have made those very points. I met Lloyds Banking Group in November to discuss a range of topics, including branch closures, and to express to it my concerns and those of fellow MSPs with whom I have spoken.
Lloyds Banking Group has said to me that it has proactively sought to engage with Government when announcing closures, and it has provided assurances that, before it decided to withdraw the Bank of Scotland mobile branch service, thorough assessments were conducted across every impacted location to ensure that suitable alternatives were available for its customers.
Will the cabinet secretary give way?
If Richard Leonard will hold on, I will come back to him.
I note the intervention that Jamie Greene made about prior consultation and information for constituency and regional members. I encourage the banks to ensure that there is early discussion with representatives and communities. The earlier that information is available, the better able communities are to bring about a banking hub or alternative options.
Do we have time for an intervention, Presiding Officer?
Mr Leonard can make a brief intervention.
The cabinet secretary uses the word “assessment”, which is the one that I have seen Lloyds Banking Group use. If there had been a genuine assessment, would that not mean that some of the mobile branches would stay, as well as some perhaps going, whereas the whole fleet is being taken out?
I share Richard Leonard’s scepticism about that, and I have expressed it directly in the conversations that I have had with Lloyds Banking Group.
As Murdo Fraser and others outlined, the number of alternative options for people and businesses to bank are limited. They are not like-for-like or an improvement; they are a derogation of service. They might mean that it is not possible to access advice and, in some cases, the post office might be closing as well.
Although the Scottish Government welcomes the engagement that we have had and is encouraged by some of the support that has been offered by Lloyds Banking Group, the debate demonstrates that the substitutes or alternatives are less than ideal and often short term. It also provides an opportunity for colleagues to explore what more can be done collectively across the industry and Government to ensure that individuals and businesses can access the banking services that they require.
In our conversations with it, the sector has expressed a willingness to continue engagement with Governments on branch closures and an openness to hearing from elected representatives about specific concerns from their constituents. There is an opportunity for better collaboration across all parties so that we can have constructive conversations with the sector and work together to understand the impact of closures and better support the banking needs of individuals and businesses across Scotland.
Therefore, we are working to set up a cross-party round table with the sector. We already have agreement from Scottish Financial Enterprise, Lloyds Banking Group and the FCA to convene that. We will look to invite colleagues from all parties to participate and take forward the points that have been raised here today.
I extend my thanks again to all members for contributing to this important debate and congratulate Rhoda Grant again on bringing the motion to the chamber. I look forward to continuing to work closely with colleagues across Parliament to ensure that the banking sector’s rapid transition to digitised services leaves nobody behind and that Scottish communities, businesses and individuals can continue to access the critical financial and banking services that they require.
That concludes the debate.
13:38 Meeting suspended.
14:30 On resuming—
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