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Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I congratulate the hon. Member for Western Isles (Mr. MacDonald) on presenting the subject for debate. It is topical and timely that we put pressure on the banks to recognise the needs of their customers. Although there is a market out there, inertia among customers gives the banks a great opportunity to make considerable profits out of their customers.
The quality of service to the community from which the banks make their money depends, in part, on the public perception of the banks and the climate in which they operate. They have a golden opportunity to step in at a vital time for the Post Office, which is the last
remaining focus for many communitiesthe last remaining source of a service in that community. The banks have an opportunity to provide a service to rural communities that they are at present unable to provide.Last Friday I visited Strathdon in the constituency, where there is a shop and post office, and right next door is a Clydesdale bank, which is open one day a week. The customers of that bank could access their money five days a week if it had a deal with the Post Office. The Clydesdale bank should think carefully. It has quite a large rural network, which it is looking to rationalise. The public relations advantage and the benefit of the message that it would send about its commitment to rural areas if it maintained a deal with the Post Office would be vital.
These issues arise at a time when the Department for Work and Pensions is seeking to migrate pension and benefit claimants into receiving their payments by direct payment, rather than through the giro book at the post office, as they have traditionally done. Many people who have a bank account that they traditionally use only for savings purposes are being pressurised or persuaded to give the account details to the customer migration centre, and then finding that their payments are going via their bank. At the moment, they are not clear whether they can still get their money through the post office. They are led to believe that they can, but that would be the case only if they opened a basic bank account.
Most of our constituents' bank accounts are not basic bank accounts, so there is no access through the post office. Ministers and the banks sometimes tell us that constituents who want to access their money through a post office can do so if they have a basic bank account. However, that is an illusory account that exists only on paperanybody who tries to open one will find themselves rapidly steered towards opening a standard traditional bank account. People who tend to use their bank account only for savings use their benefit book to collect the money from the post office for their day-to-day living expensesthey need ready access to that cashand will be in for quite a shock when they find that cannot do that any more. So there is a timely and significant pressure on the banks to provide this transfer service and to do the necessary deal with the post office.
Although these are Scottish banks, they are also major banks throughout the United Kingdom, and I think that colleagues south of the border will be behind us because if we are successful it will make a big difference.
I should like the Minister to address two matters. First, although many hon. Members approach the issue from a rural angle, from the point of view of the future of the Post Office the deal would be most effective if it applied across the whole post office network. Is there any technology that would enable those in areas not served by the banking network to deal with the post office? I suspect that that would not be possible, given the way in which the banking system works, but perhaps the Minister could consider it.
Secondly, the banks often use the defence that they have made their public service commitment by investing in setting up the basic bank account. However, if that exists only on paper, so that if customers try to open one they find themselves steered towards another kind of
account, it is not delivering the public service commitment that it was supposed to. The Government should make it clear to the banks that far more effective would be a straightforward, effective connection with the Post Office so that the conventional accounts that people are using, and being persuaded to get their pensions paid into, can be accessed through the post office.That would benefit not only customers, who would get a better service, but the banks, which would maintain their customer network for the other products that they want to offer. It would also provide a vital lifeline to the Post Office at this crucial time when it is losing income from conventional pension books and there are only a few years left of the guarantee provided by the Government to try to keep rural post offices open. New forms of business are required that will bring income into those sub-post offices and help to sustain the range of services that they provide, such as shops.
I urge the banks to listen carefully to the growing concern and to pre-empt the need for this campaigning by getting on with negotiating with the Post Office to come up with a sensible deal whereby our constituents, especially in rural areas, can have ready access to bank accounts on the same terms as those in urban areas.
Mr. Alex Salmond (Banff and Buchan) (SNP): The hon. Member for Western Isles (Mr. MacDonald) rather alarmed me by saying that all flights from Heathrow are cancelled, as I am booked on to the 5.40 pm to Aberdeen. I booked that flight when I realised that the Adjournment debate was going to take place slightly earlier. If we use up the full time until 6.30 pm, that flight will go by the board as far as I am concerned, whether it flies or not.
As the hon. Gentleman said, I was formerly an economist at the Royal Bank of Scotland. I do not know whether that constitutes declaring an interest as a Royal Bank pensionerif so, I willingly do so. My former colleagues are fond of telling me that the bank, which is now the fifth or sixth largest bank in world, depending on how it is measured, has grown rapidly since I left its employment. I like to think that the foundations were well laid before that date.
This is an important debate. We should understand more about the misgivings of all three Scottish banks, who argue that in seeking to maintain and develop local post offices, we might be jeopardising rural banks. However, as the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) sensibly points out, those banks often open only for one or two days a week. The priority should be to ensure proper banking services, particularly in rural communities. I hope that the matter can be resolved, because for the life of me I cannot see why an element of good will in negotiations could not bring about a satisfactory settlement.
As regards bank closures in rural communities, the Bank of Scotland and Clydesdale bank have been particularly innovative in looking closely at the provision of services such as cashline machines, or other money dispensers, in community centres, but it has to be said that those initiatives have been quite limited. When
I worked at the Royal Bank of Scotland, all the Scottish banks had portable rural banking services; I seem to remember that the service in the Western Isles was operated by plane. Those services were well advertised by the banks as part of their community facilities. Now, they are not provided at all, or certainly not to anything like the same extent. As a result, many rural communities throughout Scotland have a post office that offers only basic financial transactions and some rural communities have no banking or money transaction services available to them.The initiative to set up money dispensers in post offices is somewhat limited by the continuing confusion about the charges that are made depending on the type of account that one has. Although a warning is displayed on most machines, it is certainly not clear to me whether I am being charged, and I suspect that many people are in the same position. Money dispensing machines are therefore very limited for that purpose.
It would be ideal if an arrangement could be reached between the Scottish banks and the Post Office. That would consolidate the position of the Post Office and make a right for rural customers much more widely available than it is at present. It is strange, in a new century in which technology is widely available in so many forms, that a basic banking facility that many of our constituents still wish to conduct on a person-to-person basis is being denied to so many of them. I wish the hon. Member for Western Isles, and other hon. Members who are pushing this issue, well in forcing it to a satisfactory settlement that could be in the interests of the Post Office and the Scottish banks, and which would certainly be in the interests of our constituents.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): I, too, congratulate the hon. Member for Western Isles (Mr. MacDonald) on securing the debate. I apologise to him, and to you, Mr. Deputy Speaker, for not being in the Chamber for the first couple of minutes. I had anticipated that the Adjournment debate might start earlier than is normally the case, but I had not realised just how much earlier. Those of our number who are responsible for ordering the business of the House may wish to reflect that, not for the first time, it will be rather more substantial than the main business of the day.
Sir Robert Smith: We have more time.
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