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A report wants the government to obtain reassurances from banks that they will not close “the last bank in town”
A group of MPs have called for legislation to stop banks leaving Scottish towns without a single branch.
A report from Westminster’s Scottish Affairs Committee wants the UK government to seek commitment from banks that they will not close “the last branch in town”.
If they refuse, legislation should be introduced to stop them, they said.
In the last eight years, Scotland has lost about a third – 610 – of its total number of bank branches.
The committee has been holding an inquiry into access to financial services in Scotland and has previously issued warnings over the number of branch closures.
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ATM closures have not helped the situation in local communities
MPs suggest Scotland has suffered proportionally more bank closures than in the rest of the UK – with some towns being left with no branch at all.
Further recommendations made in the report include strengthening the regulation of bank branch closures, with public consultation ahead of any shutdown and publication of impact assessments for vulnerable groups.
It also focuses on preventing further loss of ATMs and suggests that a strategy should be put in place by the UK government on access to cash.
‘Deteriorating picture’
Committee chairman, Pete Wishart MP, said: “It is disgraceful that banks think they can abandon Scottish towns with no access to essential financial services.
“Last year, my committee demanded that RBS halt their march of bank branch closures, but since then the picture seems to have just deteriorated further. In 2018 in Scotland, 355 ATMs were shut down, and bank branches continue to close at an alarming rate.
“Scottish communities are becoming ‘cash free’ against their will and it is time the government stepped in to intervene.
“My committee is calling on the government to stop banks from closing the last remaining bank branch in town.
“It is essential that towns are left with at least one bank, so if the banks won’t make this commitment themselves, the government should consider legislating.”
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Banks across Scotland, including in Beauly, Stonehaven and Dalbeattie have closed
On the day the committee released its report, ATM provider Link announced funding to protect free access to cash for every high street in the UK.
The company said that should a high street be threatened with the loss of an ATM or Post Office, Link would step in to ensure that a cash machine was made available and was paid for with funding from all the UK’s main banks and building societies.
Link chief executive John Howells said: “Link is determined to defend free access to cash across the UK in the face of very rapidly declining cash use.
“Link will take further steps to ensure that the free ATM footprint is safe in Scotland and extend its commitment to cover every high street.”
‘This time must be different’
Andrew McRae, from the Federation of Small Businesses (FSB), said: “Losing a local bank branch makes it more difficult to run a business in an area, as well as leaving another ugly gap on a high street.
“MPs are right to underline the impact of the withdrawal of the banks on people and businesses. Swift action is now needed from policymakers to defend our remaining local financial infrastructure; to bring empty premises back to use; and to oversee the deployment of alternative facilities for left-behind places.
“The Scottish Affairs Committee is right to argue for action – including legislation – to retain our remaining local banks, as well as our cash-machine network. However, the big banks have shrugged off these sorts of reports before. This time must be different.”