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Flawed appeal to halt RBS branch closures

Terry smiling headIan Blackford , the SNP’s Westminster leader, was in thundering form in the Commons, accusing the Royal Bank of Scotland of betraying taxpayers who bailed it out back in 2008. It’s an admirable gesture that will receive widespread support, even though it betrays a little naivety.

As an RBS customer I have some sympathy with the SNP’s position. I use branches quite a lot and I also queue more than before as more customers are forced to use the few left available. They were queuing into the street at one in Corstorphine the other day. So much for no one wanting to use them anymore.

Bank staff will tell you this is more about staff cutbacks and saving money than customers going online. A survey by Accenture showed that customer use of branches is at its highest level since 2010. It found that more than half of bank customers – 53% – regularly access branch bank services compared to 47% seven years ago.

Yet there is an undeniable drift to online banking, or at least greater use of technology. The cash dispensing machines of the future will enable customers to do more transactions so that if there is a branch at all it will be occupied only by rows of keypads and screens.

Mr Blackford, and his MSP colleague Kate Forbes who echoed the Westminster call at Holyrood, are, of course, standing up mainly for rural communities. They are concerned for the elderly and those simply struggling to get online, either through their own limitations or the frustrations of poor connectivity.

But RBS is not a social service. No more so than any other business selling its products and services in a competitive market place.

Should the UK government have a blanket ban on all the banks closing branches? Should it order Boots to make sure there is a chemist in every town and village to ensure there is an available supply of pills and hot water bottles? Or B&Q to open local plumbing and electrical supplies stores in case someone needs a bag of nails? Where does it stop?

Mr Blackford and Ms Forbes believe that because RBS is 73% owned by the state it is obliged to “repay” the taxpayer. But what happens once it has been returned it to the private sector as the Treasury intends? Would that release it from these obligations and allow it to resume its branch closure programme?

It is one thing for the government to intervene to keep the bank afloat, but it is quite another for it to play a part in how it carries on its business.

So long as RBS performs within the laws governing companies and the markets and within ethical guidelines the state has no reason for further involvement.

While I agree with the SNP’s sentiments and would love to see lots of independent shops and trades return to towns and villages, the campaign to stop bank closures just ain’t going to happen.

Just as bookshops have almost disappeared because of online competition she must also recognise that RBS (notwithstanding earlier comments) is responding to the simple rules of supply and demand. In this case, the internet is the real culprit and that opens up a whole new argument.

 



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