 Welcome to the 14th meeting of the Economy, Jobs and Fair Work Committee for 2018. I may ask all in the public gallery to turn off any electrical devices so as not to interfere with proceedings. I have apologies from Fulton MacGregor, committee member. The first item on the agenda is a decision by the committee to take items 3 and 4 in private. Are we all agreed? Yes. Today, we commence our evidence for this part on bank closures. We have with us five witnesses today, so welcome to all of you this morning. First of all, we have Pete Chima, who is the chief executive of the Scottish Grocer's Federation. Tim McCormack and Ferhan Ashik, both of them shopkeepers, no doubt will hear about your businesses in the course of evidence. Barry McCulloch, who is senior policy adviser to FSB Scotland and Phil Prentis, chief officer Scotland's town's partnership. Welcome to all five of you. In the interests of transparency, I should mention that Gordon MacDonald, committee member, is the convener of the cross-party group in the Scottish Parliament on independence convenience stores. Both myself and John Mason are members of that cross-party group. If I might start with a general question to the panel members, and I think probably to our two shopkeeper guests today in particular, have your businesses been affected by bank closures or other businesses in the communities where you yourselves operate, and if so, how would you like to start? I should say that if you want to come into the discussion, please indicate by raising your hand, and I'll try to bring any panel members in at that point. Don't feel you have to answer all or particular questions. The sound desk will operate the mic system, so you don't need to press any buttons. Tim McCormack? As it happens, I've been involved in two bank closures. I've had two businesses over the last few years, and one of them was a post office in Duns, and the Bank of Scotland was only a few doors away, and it decided to close on a Tuesday and Thursday, so I had the opportunity to see the effect in my business, because I also sold cards and stationery. I could see the effect in the business during those days where it was closed, and it was remarkable. Retail takings, on the days it started to close, were down considerably up to 50 per cent, and then when I moved to Coles, I managed to get out of the post office business and moved to Coles two and only 10 miles away, and bought a little news agent there, and only a few doors down from the Bank of Scotland again, and it decided to close last August, closed completely. Sales went down overnight by 20 per cent, not just because of the actual branch being closed, but the removal of the external ATM was very significant, and significant not just for me, but for the pub opposite and for the businesses near me. It had a tremendous impact, and to the extent where now I've had to lay off, well, they've left, they managed to find other jobs, but the two girls that worked for me have had to go, and I'm going to end up working six hours a week just to keep the business going to pay off the loan that I rather stupidly undertook. It's had a significant impact on me. In terms of bank closures, I want to look at this a little bit more holistically. Bank closures are one thing, but the new ATM charges are potentially coming in as well that we're going to discuss further down the line, and potential post office closures holistically will have a negative effect. In my town, in Preston Pans, the Royal Bank of Scotland, which was the only branch that was shut down about a year and a half ago, there was no consultation at that time. We did find out about a few weeks prior to it closing that it was closing, and the banks did give us some sort of support in terms of how we could mitigate our travelling to branches further afield. However, from my case, it turned out to be a much more painful transition. It took me about three months to overcome that first barrier, and that was primarily because it happened to me, my relationship manager, at that time went on to long-term terminal sick leave, and the replacements didn't have a clue what the actual way to circumvent. My biggest problem was the change-giving aspect. My business uses a lot of change every week, and I needed to run my business effectively. Otherwise, it just comes to a crash and it stands still. I had to go down to Musselbrach and constantly go through a 20-minute traffic jam. I don't know if you guys have ever been to Musselbrach. The high street is horrendous for the traffic. Then you go into the branch, and because everyone is now trying to come to Musselbrach, their cubes are horrendous. Then you've got Trinent on the top side as well. Now, getting into Trinent was easy. Parking was a massive problem. When it was happening to me, I was taking pictures of the cubes and constantly tweeting RBS and telling them what a nightmare they're putting me under. Over a three to six months, I had mitigated that, using the post office as a way to get the change. However, the problem with that is that it's only the one post office you're designated to. That is your post office branch. If I've come to this committee hearing and I need a change, I would have to go back to that post office to get the change, as opposed to being able to go any post office using my card. That is a service that I've lost whereas in the previous branches with RBS, I could have just gone into any branch. The same with money deposits. It's a cash-rich business. The FSB and the SGF have done reports that 75 per cent of businesses still use cash. For a convenience store, it's as high as 85 per cent. I've got some stats here from my own business. That's how high it is, and only 15 per cent is used by a card. Because that's happening and I have a second store in Levinhall, I forced to put a self-filming ATM machine so that I don't have to go over to branches to deposit my cash. Given what Link is saying at the start of this year towards the end of the year, that is going to come under a threat again. It will be devastating to my business. I won't really know how to overcome this issue. Sorry, I went a little bit further. No, that's very helpful, thank you. If you do have further information you would like to submit to the committee, you can do that in writing. You may not want to submit the account that you're referred to, but if there is anything that any of the witnesses wish to submit after this hearing in writing, then please feel free to do so. Pete Giman. The current, as Fernand has said, is having an absolute devastating effect on local businesses. The reason for that is that they're having to travel, in most cases, about an hour back and forth. That causes security issues as well as anything else. It causes insurance issues, the extra man hours, especially in a time when businesses are having to cope with cumulative cost pressures such as auto-enrollment and the extra pressures that the Government has put on businesses such as a living wage and the extra rates that have come through. For small businesses to take on extra people to cover when they're away to the bank is a huge issue. Travelling, car parking fees is all an issue. The fact that they're having to bring change and carry that in full view from a high street location back to their store is another issue. It's taken the basic fundamental rights of a business to do banking away from them. Fernand's absolutely right. Our survey shows that 76% of all cash handling is still done in retail stores. Yes, London is down to about 55%, but this is Scotland, and if you look at some of the rural locations, it's over 80% the amount of cash that is handled on a daily basis. Also, the fundamental point that banks are making in terms of bank closures, they've never really looked at the commercial aspect. They've just looked at the overall aspect. If you look at the overall aspect, yes, personal banking is definitely on a decline, but not commercial banking. Commercial banking is still going at the same rate, but they've never actually done the full analysis, and that's where they've actually failed. I think that given this is the committee's first session on bank closures, it's only right to understand the scale that Scotland has seen in the past few years. Since 2013, there's been a whole host of closures. In 2013, there were over 1,100 banks operating in Scotland. That figure, according to our own research, is set to drop to under 800 by the end of this year. I will preface that by saying that there are figures, because there are no official up-to-date figures available since the CMA published its report in 2015, so in part we're staring into the dark somewhat. However, what that means in practice is that there's a number of towns that have no banks, such as Gwric, Press and Pans, Luck Gaeli, Kilmachome, and those places are growing in numbers. As people mentioned before, they have a range of business impacts. I'll just talk about one or two for the moment. The impact on cash flow is significant. Cash is still the most popular payment method for consumers. Business owners need to be able to deposit that cash safely and securely. If they can't, that hits their cash flow. Secondly, the closures lead to a range of additional costs and hits their productivity. Time spent travelling to distant branches, if you're in a remote and rural community, is time taken away from the business. If you're someone like Fairhand and Press and Pans, that could be up to four hours a month. We have members in the Highlands where that's 12 hours a month, you have to cover. There's a significant opportunity cost there for the business owner, which he would rather not have to deal with. Lastly, the replacements put in place are poor substitutes, whether that's online banking, mobile banking units or, indeed, post office access. They are no substitute for a functioning fully capable bank branch, and our members frequently report problems with the substitutes that have come into place. Phil Prentis? I might be going to come at it from a slightly different angle. Most of these guys will be on either our board or in our membership. Scotland's Towns partnership was created by the Scottish Government to take forward new approaches to repurposing the high street, and we represent a very broad church. As part of this process, we came to it belatedly, so I've yet to collect in all of the opinion, and I'll send that in due course. By and large, we're actually not against branch closures, because if you take a look at how society is moving on and how we transact, the bank is no longer seen as an attractive footfall generator in the heart of town centres, but I would caveat that with two conditions. We can see why branches have to shut. You can't argue against the fact that less than 1 per cent of banking customers regularly use a branch. Any business model can't stack up against that, but the two preconditions that I think we need to interrogate much more thoroughly is, as the guys have pointed out, some form of last branch in town, whether it's a multiple solution across the brands, whether it's one of the disruptors like Unity Bank, that's coming to the fore. There has to be something. I've got a conversation going with RBS, the co-op bank and Unity, to have a look at how we could potentially build in some resilience. For example, in a lot of rural and remote communities, you've already got a co-op, so could the co-op bank actually be integrated into the convenience store to make sure there's some form of local bank. By and large, I think we have to just see that we are moving towards becoming a cashless society, much more transactions via contactless, etc. The second thing that, again, would need to be a condition, and I think this is probably where some of the anecdote and emotion comes to the fore. Banks traditionally have got a big footprint in the high street, and RBS in particular, you know, they're the most characterful and dominant buildings in the heart of the town. Whenever they decant very quickly, it just leaves a sense of decline and despair, because very often there isn't a use promoted to come in at the back of that. So I think it's more to do with a toxic legacy for the branch, for the bank. If people in three or four years' time are coming into high street and seeing a big RBS sign on a dominant building that's now vandalised and people are paying empty rates on, so there has to be something around last branch in town on what do you do with the banking estate. There are so many opportunities for community enterprise, for startups, for restaurants, for childcare, provision, and I think that the bank should be put in a position where there have been more proactive and not just walking away. I just wonder about that last point, if I could come back to you on that. I think that the comment from some of our other witnesses was that cash is what tends to be used in retail. Now, if it is the case that bank branches are being closed and small businesses have to travel quite far to bank cash and so forth, does that put them at a disadvantage to large operators who operate out of much larger businesses and also to small shops in town centres? If that is the case, what is to be done to ensure that town centres don't end up with all those closed shops if, in fact, the way things are set up is simply to the advantage of large retailers? I would counter that. Again, a lot of this is sort of smoke and mirrors and a lot of it is emotional and that is probably just down to the fact that people see in a very quick space of time lots of branches have closed very quickly and I think that we collectively have let that run away to a certain extent because I still think that there is a need for some form of last branch in town provision. However, Gwyrwch is my local town and it functions very, very well. In fact, Gwyrwch is the most highly independent niche retail town in Scotland so it sort of counters that argument. These guys are able to function because they've got ATM so whilst the bigger branches have shut down some of them have been repopulated with craft food and again high quality niche retail so it's actually created a space in the town for new investment. The ATM provision allows the businesses to bank their cash so they can put checks in, they can deposit through ATM so there is a sort of mobile solution still left in the town. I genuinely think that we need to explore this in much more depth because at the minute the banks are sort of almost waiting for a good day to release bad news and then just to sneak away quite quietly I think we need to get them into a room and say this has to be based on demographic, it has to be based on the make-up of the SME population so our ageing population but again if you dig deep into that when my mother's 80 she lives in a very remote Irish town I do all her banking for her online and she doesn't ever need to go to a branch so I think we need to move away from okay yes in a short period of time we need to come up with some form of interim solution and collectively the banks should be put in a position to deliver that that meets the needs of these guys but long term I think we should be more concerned about the estate and the future of the high street and what those properties could do to actually repurpose and reinvent so there's two conversations there but again these guys are sort of stuck in the middle just now where it is quite difficult The larger organisations, the larger shops have their own cash and transit pick-ups their own security pick-ups it's the smaller shops like ours dealing cash primarily that are required to deposit it into well I use the post office now which is quite handy but even those are closing and moving and particularly when they move somewhere else for checks I wouldn't put a check near a post office because they lose them so I'd have to travel by bus to Kelso to deposit my customer's checks so one net effect of the local bank closing is that I will stop taking checks in my business which is upsetting to the older generation who use them Pete Chewman wanted to come back in there I mean to some points I would agree with Phil but if Phil if you're trying to encourage retail to move into high streets there has to be a solution and the majority of money taken over the counter is still cash so we can't get away from that it has to be banked somewhere in terms of ATMs taking cash and that being the alternative it's only the internal ATMs that are taking cash the external ATMs that are provided by all the big players whether it's RBS, whether it's Bank of Scotland whether it's Satander whether it's Cash Zone whether it's YourCash, Hanco whoever it might be they're external ATMs and they don't have a facility to input cash the shop cash into those ATMs and the interlink charges that are being reduced from 25 pence to 20 pence which will mean in future and it's already happening that some retailers are being told well you've either got to charge for these ATMs or we're going to take your commission rates away now that's in a time which has been exacerbated because banks for example charges for inputting cash now predominantly in the past we used to have fixed charges and by having fixed charges we used to be able to pay say about £100 a month or £150 a month but the average turnover of a convenience store at the moment is somewhere around about the £14,500 mark but taking into account lottery, pay point and everything else that probably goes to around about £22,000 so by the time that money is banked that's going to cost them £143 a week that's nearly £7,500 a year so the banks are not only closing banks but what they're also doing is making them go on to the maximum fixed charges which is roughly between 65 pence to 67 pence per £100 I want to move on slightly so come to follow-up from Jamie Halcro Johnston and then further questions from Gillian Martin you will have a chance to come back in and you may want to pick up one or two of these points in your other answers so Jamie Halcro Johnston Thanks very much, Covina it was just actually in the points that you were making there and I think that P.G. Mo has kind of answered some of the questions that I was going to ask but in terms of you will all hold business accounts with the bank is your business account held with that local branch or is it from a more centralised branch? My branch has been moved to Trinent so my local branch is Trinent that's where it's held I am same with Long Nydry in Port Seaton now there's an issue right there in itself if you were a resident in Long Nydry in Port Seaton you would travel to Preston Pans there was a direct public bus that goes there and you would get off now your local branch is Trinent and you would go to Preston Pans get off the bus, get on to another bus going to Trinent now that's £1.71 one way then £1.70 going to Trinent then back down to Preston Pans that's nearly £5 just to get access to your cash again so I think that's disadvantages a lot of people I'm lucky I have a car so it doesn't affect me personally but it's a lot of people that does affect It was just rather how the bank looked at those individual branches whether they looked and said right well there were customers out of that branch and a number out of that or whether it was all centralised we weren't told how that worked we were just told that was your branch the only thing we were allowed to do was whether we could keep our sort code was still a Preston Pans sort code or did you want to change it to a Trinent sort code that was the only thing they asked us and was there any discussions with that branch was there any consultation in terms of this is what we're thinking of doing this is how we're going to we're looking at losing this branch yes and no there was initially no consultation eventually Ian Gray MSP kicked up a fuss within the community and they offered us offered Ian a meeting which was scheduled about a week or less a week before the branch was actually going to close so what that actually was going to actually benefit in any way it was negligible and none of those discussions kind of involved well would you be willing to pay you know what I know you mentioned already large charges would you be able to pay a slightly increased charge to make that local branch more sustainable no we weren't given that option either okay thanks Julian Martin just in the interest of declaring everything as other members have done I should mention that I'm the deputy convener of the towns and town centres cross-party group and I'd like to ask follow-up on some of the things that Phil Prentis has talked about about the town centre you've already alluded to what you think broadly could happen to vacated premises of banks when we have a situation that a large building as you mentioned Royal Bank is vacant for a long period of time in a town what impact does that have on the town centre probably it's more of perception rather than economic problems albeit we want to see as much property in the town centre work hard for the town centre as long as it's a short term churn you'll always have some sort of vacancies and voids as things chop and change but I think it's more of it's more of a psychological blow to the town when you walk in and you see a large branch that used to be the hub albeit 20 years ago of a lot of commercial activity being allowed to live follow and I think there has to be some sort of prerogative put on to these banks to say look engage with your local community planning partners engage with your local community because with changes in legislation that are coming around CSOs compulsory sale orders etc local communities will be able to come in and almost agitate for improvement we've got a lot of issues around repopulate town centre so why aren't we looking at transforming some of these vacant buildings into accommodation for people to live but also just thinking about how high streets need to think beyond retail and that's really important whilst we're very supportive of all the retailers we work with big and small the future of the high street will not be dictated to by retail only solutions it's much more comprehensive and I think the Scottish Government have got the right approach in terms of view on how towns can be repurposed around housing around digital around quarrying up public services town centre first principle etc so it's not nice to see that the branches land empty very quickly in vibrant cities they tend to just get sold off in a commercial deal and very quickly you'll see something like a pub or a gym or something like that move in but that's different whenever you get out to the peripheral secondary towns where you've got a sort of sub-prime market on a lack of confidence dysfunction in the property market and I think that's where the banks need to show some sort of social conscience and actually step up to the plate to be honest enough to say they've probably written the capital value down as part of the financial crash so these are just windfalls to the banks why can't you do your societal duty and meet the needs of that local population it could be something for older generations coming with younger generations it could be co-working environments incubators hatcheries start-ups business centres there's a whole range of particular uses that a bank would lend itself to and then you'll start to see the footfall coming back into the town because it'll be honest I mean hands up around the table today when's the last time you physically walked into a branch I was on the radio this morning once in the last year because it was a large transaction that it couldn't do online but we are as a population deciding that we want to transact our banking business in that old format in terms of the bank's reputation as Willie mentioned that too there's a lot to be said for banks who could be sitting with a state empty for a long period of time and not actually becoming a I suppose a burden on them actually maintaining it and that they could do a lot for a community by gifting it to a community there's a lot of conversations that are under way to be honest very quietly behind the scenes because you can imagine RBS in particular have been having a very difficult time in Westminster around treatment of SMEs et cetera just the wider context but we're having these conversations behind the scenes about the biggest issue for the bank is not having to pay a punitive rates on an empty property it's not about the insurance it's not about the maintenance and the vandalism it's about 3-4 years down the line and there's a big sign of a toxic legacy it's damaged to the brand and they're aware of that so how much better would it be if that RBS sign could be put inside the building and it becomes a childcare facility and everybody in that community actually thinks you know what they put something back after all they give us something back so we're having those conversations but it's a very delicate time for the bank just now but at least they're engaging which is important and the cooperative bank as well coming in I won't surprise committee members that the FSB has a slightly different take to this than Phil Prentis and I think if we do take the emotion out of the situation and we analyse the facts we'll find that between 2016 and 2018 there will be 258 empty units that weren't there before and in vibrant property markets and city centres that will be filled I think the market will kick in and alternative buyers' attendance will be found however in the rest of Scotland these closures will thwart attempts to regenerate towns and high streets that will undeniably impact confidence and have a devastating impact on the local economy and if we go back to the points that were mentioned earlier cash remains the most popular payment method for consumers and as the heralds mentioned yesterday if you look at Lot Gaeli who lost her last bank what the traders have seen in Lot Gaeli is that shoppers and visitors are now going to town and beef simply because that's where a bank exists so there will be a distortionary effect on football some towns will lose out overwhelmingly and I think we worry about the long-term impact this will have because we know the empty units and the high streets we know that it has a massive economic and psychological impact and given the transition that we are in between bricks and mortar retail and the future we have big concerns about the impact that these closures will have because if you think about some of the units they are historical buildings that will be expensive to maintain and if you look elsewhere in Scotland they've had an empty bank for some time and it's been a real problem site and the impact that that's had in a largely affluent town is considerable and that bank has been empty that's been an empty unit for many many years The SGF has carried out some work with a bill payment service company that indicates £175 million worth of rent and council tax payments are made through convenience stores and that really keeps everything going if that's the inability being taken away local councils really could come to a standstill but we mustn't just cloud over just the cash element we've got to look at the other services you know whether we're taking cash out so it's about cashing it's about cash out, it's about the change element but it's also about the other services if we're really going to fully regenerate the Scottish economy and Scotland's high streets then bank lending pays a big part so if you look at coming closer to Creef if you look at Dumblane there's no bank there look at Bridge of Island, the next town along there's no bank there look at Bannockburn, there's no bank there look at Allowa, there'll be no bank there so all of these places, all of these retailers where do they go for their lending if they want to really get that contact so it's not only about cash element it's also about the other services that the banks provide in terms of lending, in terms of growing the Scottish economy and if we look at productivity in terms of a time when Scotland's productivity and the UK's productivity as well is weak compared to the rest of Europe how are we going to grow that it's just to follow up from what Phil was saying in terms of bank closures and obviously he said in Edinburgh the turn is quite quick and in the outer towns it isn't and Prestonpans is a good case an example, we've had the bank being shut for a year and a half now a planning application was put in place for a restaurant to open up there with some housing on top but it was rejected because poor parking space now I feel a lot of the applications such as this would be rejected because the parking facilities aren't there so what is really going to go into that empty building empty building in a prime bit of land secondly to that it has had a direct impact on one of the convenience stores on the high street who's shut down in November of last year and this has been there for 30 odd years he had to close I planned on taking on that premise myself I did my due diligence I sat in my car on the high street just to see what the footfall was in one hour I counted 10 people that is horrendous and that was a high street that used to generate a lot of footfall a lot of people that would be there another thing that Phil said earlier on that we're as a population we're moving to a cashier society potentially online banking etc but you've got to remember elderly can't do that Pat O'Brien he struggles using a computer never mind doing online banking how can you expect someone like him to be able to transition without punishing him with the closures sorry well just one specifically for the organisations that are represented whether any research has been done into footfall as a result of any decline in football I know we've got anecdotal evidence and Tim McCormack made a point about how it affected your business directly but general footfall into the city centre as a result of a bank has there been any analysis done? that's a very very good example I would use because I've got some background with the post office in the early 2000s when the first round large round of post office closes Manchester City undertook a huge survey on the effect of post offices closing there and the footfall so it's a good report to go and have a look at because it shows the loss in revenue to the businesses beside the post offices in general and they put a figure on it it was a massive figure just for that one city post office branches in one go so that's a very good research into the effect of what happens not just when a bank closes but when a post office not this latest network transformation thing they've got their post offices that are closing their outlets in the high street they may be moving to a retail unit nearby which minded I moved my post office into a news agent where my retail outlet then closed so there was a loss of a retail outlet because of the post office network transformation programme and that's happened with thousands throughout the country over the last few years so Phil Prendis just to pick up jelly on this point no we haven't done any specific research but we have a very unique data tool in Scotland which is called usp.scot so understanding Scottish places this is a tool that was built by Scottish Government academia university college London we've got all the information around how towns function so it's a typology tool kit so for the first time ever you can actually see what type of town you are what other towns in Scotland you're virtually identical to just about to launch a further iteration of that that builds in green space health and wellbeing data digital connectivity house price analysis the second phase of that in 2018 we're going to be deploying a whole load of sensors across Scotland's high streets in a partnership with the Institute of Place Management and that will for the first time ever give us real time footfall data but I don't think there would be any value in this something for you to consider I don't think there would be any value in just specifically looking at the banks and the impact on footfall it's much more complex than that there's been such a churn and change in retail which was always the key driver for footfall in the town centre and until that actually sort of works its way through just picking out retail services banking in particular wouldn't really give you an accurate measure for footfall so I think the message I'm trying to say is that we are moving towards having much more real time data which will encompass all of that churn and churn around bank inclusions around retail moving about trying to repopulate et cetera putting core services back into the heart of times and I have to say that some local authorities have done really really well by investing using the town centre first principle to put a range of public services in the heart of the town generated confidence from the commercial sector to come in on the back of that so it's where you see collaboration sort of public-private partnership you see a lot of success and I think sometimes we concentrate too much on the sort of the challenges rather than looking at some of the really good examples a big role for the planning departments of local authorities in bringing people back into town centres not necessarily just retail More proactivity in the planning system is one of the key planks of the town centre action plan so we have seen things like simplified planning zones to try and remove some of the bureaucracy change of views so we can move from one thing to another we put it more quickly and I think it's the duty of local government to start thinking about what investments can we make in our town centres that will actually then generate confidence for the wider private market to come in and capitalise on the country you know people are gradually starting to see the town centre first principle because towns are the beating heart of the community and every work from West Dunbartonshire we are seeing Dunbarton, big investment, public sector in the town centre and on the back of that a lot of new commercial interest people asking about the artisan centre what else could come from this 200th year anniversary coming around the corner so it starts just by the council actually initially making a good investment moving from a headquarters out in the middle of nowhere to actually bring that back into the heart of the town in a very historic building so there are really good examples across the country where football is being driven back into town and I think we need to sort of pick up on those good examples places like Kilmarnock, Dundee where that sort of collaborative approach has led to significant improvement Barry McCulloch wanted to come in on that question In our submission to the committee we referenced research that we published at the tail end of 2016 looking at the economic impact of branch closures specifically on small businesses but also the wider economy one of the big implications which will not be a surprise is reduced footfall and reduced spend in the town centres but I think it's important to reflect on Phil's points and looking at closures in the round so it's not just banks and it's not just big business it's the public sector as well and the role that they play in generating footfall and if you think about the last three or four years and the closures that have been presided over across Scotland have been significant so just to name but a few we've had police stations courts, police counters local government buildings colleges, HMRC and that's just to name but six and what these all do is they're sticky units that generate footfall and so what we're seeing from an FSB perspective is a range of bodies both public and business investing from the town centre which is making it much more difficult to breathe new life and to some places which have seen better days. Okay, move on now to questions from sorry Pete Chimmer did you want to come in on that and then we'll move to questions from Colin Beattie. No, very well, Colin Beattie. Thank you. I'd like to go over one or two points that have already been made particularly in the connection with the cash transactions. When everything I read from the banks indicates that cash is dead that very few customers are actually crossing the threshold of the banks anymore and yet you're telling me that from the retailer's point of view they use banks frequently and that cash as far as you're concerned is the primary medium for payment. Why is there such a disparity? Why do we hear from the banks that cash is being phased out and that they're encouraging this and that less and less people are using it but you're still it's a vital part of your business so how is this disparity? Why are the banks not highlighting this? It's a question that you guys need to ask the banks how is their football because right now I'm seeing independent analysis at odds with what Arby is saying and I've been told and I need you to find out whether this is true or not suppose you're living in Trinet now but your local branch is a muscle bra and you visit your Trinet branch regularly but apparently they don't count that in their statistics now if that is true that in itself will let you know of the mischievousness of the football calculator that they've put out in the press let you guys know and let us know as well I don't understand why there's such a disconnect every time I'm there at the branch it's busy a lot less that's only because I can't afford to waste an hour every week going to the branch I have a lot of things I'm the chair of an area partnership community councillor, I've got a lot of community commitments and I have two businesses to run I cannot be spending an hour going to the branch doing basic banking which I used to be able to do in five minutes now there was a suggestion earlier on Bank of Scotland have set up which allows you to have it's not a mobile van but one of those pick-ups which costs £14.12 per pick-up this is an extra charge previously it just cost me my petrol to go into my branch now I'm expected to pay an extra £14.12 having said that on the caveat I'm not a Bank of Scotland customer but those who are that's an extra charge that wasn't there in the first place so they actually come round to your business but they charge you £14.12 for that pick-up which wasn't there before so it could have cost you a pound in petrol or the walk, whichever was how you did it in the past from the retailers point of view just to add to the question I asked how often do you go to the bank I mean I'm trying to gauge what your footfall really is do you go every day, is it every other day or does it just depend on what kind of business you've got twice a week on Mondays and Fridays I go I try to do it once a week that's also no armed robbers watching then it's Tuesday and Thursday don't give us times would someone else like maybe to give us something on the cash side you mentioned how do we square this circle and it's impossible because on the one hand you have the bank saying cash is dead we're living in a cashless economy and then the business community is saying it's absolutely essential to the operations and that's why we absolutely welcome this committee's inquiry to shed a bit of light because our members tell us that three quarters of them regularly visit their branch for a whole range of banking services and we honestly were finding it difficult to digest the bank's perspective here because it just directly contrasts both with our own view and with the views of our members and I think moving moving forward we have to establish the facts because there has been far too much emotion in the debate so far and the mere fact that we do not know how many banks will be open after the closures programme in Scotland in 2018 is unacceptable how will we establish that we have a minimum banking provision and we don't know how many banks are open we've produced this report for the past three years and it's produced every single year we do provide it to all the MSPs and I'm sure you've all received the 2017 report and it actually states in there what the cash turnover the percentage cash turnover is and it is actually 76% so there's no question about that cash is still king in retail but also convenience stores are predominantly low margin, high turnover stores and companies often levy high charges on car transactions as well so it makes it difficult for retailers really to move away from cash to non cash transactions as well but also retailers can't put any surcharges on cash transactions because the EU payment services directive came to force in January so if we talk about cash pickups if we move on to that when somebody comes to pick up your cash at cost of whatever it is 14-15 pounds that's on top of the cash charges to input into the bank that I said earlier so that's another 7.5 grand on an average per year as well and then obviously cash pickups depend upon your turnover and how you use that turnover so I sold my last store in June 2017 and we used to have a number of stores up and down the country now we used to have to bank every single day because of insurance but it depends upon what kind of level of your safe is covered on how much can you actually take in cash to go along to the bank do you need two people to go along with you you know that there are all these considerations as well it's just not that simple but as I said before it's about other services as well and those other services being taken away and it's going to cause the Scottish economy big issues you know if we're not careful the question of cash is it driven by the retailers or is it driven by the clientele clientele there's an issue here as well the reason my store is 85% cash is because I don't allow people who buy purchase gas and electricity to pay by car now why do I do that it's because car charges cost me more transaction now the commission I make on £20 to £100 whatever it could be is £7 and that's it so I'm in effect losing 10p now over the course of the week that's £20 a week you add that throughout the year that's an extensive amount of money so because of the holistic picture this is still cash is always going to be strong and especially I represent a community that's in a bottom 20% social deprivation in the county both stores actually at Wimpey 11 hall and Impreston pans as well now this well we can move on to the ATM I was going to bring that in right now with the charges coming in potential charges the caveat I should add will have a devastating impact on both communities this is already the most deprived communities and now we're going to charge them to take cash for their own money but as a small business owner I'm not saying that the likes of ScopMid and Tesco's etc they'll be able to facilitate that because they generate multi million pounds so their charges the card charges will be a lot lower than what mine is so they can afford that cost but our businesses we can't afford that cost your charges will be I was going to come on to ATMs in a minute anyway ATM charges is you can see it as a good way of looking at or a bad way of looking at or retailers if you've got self-filling machines we're we're told that we're getting a bigger slice of the pie however if you're charging your customers to get the money out A they're going to less likely to take the cash out and B that's going to have a direct negative impact on your store in terms of reduced purchases having an ATM in my store has increased my sales by about 20 odd percent so people who come to take about 200 pounds or 100 pounds out spend at least 10-15 pounds in my store and take the rest with them and taking that facility away I'm next door to a Scotland store and I'm sure the Scotland store has a higher churn of cash so my store may be the one that's earmarked to be on the chopping block because they don't want too many ATM machines within a certain location I was going to ask about access to ATMs is it adequate has there been changes that have been significant in the market that are impacting there will be huge changes going forward and the bank closures have seen that the ATMs have been taken away and nobody wants to take them on because predominantly these larger companies now are saying to the retailers well you've got to charge them you've got to charge your customer because we're no longer going to be able but on top of that because it's zoni predominantly in most stores you're now having to burden with the rates issue of that as well and that's huge You want to come in on these points Well there are from my perspective as a news agent I knew the bank was closing next door and I knew that obviously the ATM was going so to card machine so up until last August my business ran successfully without a card machine so it's all cash and checks and since then I've had a card machine and remember as a news agent a son is 50 pence and the average spend is much less than £5 cigarette sales are next to nothing these days so the majority of sales so they don't use cards obviously they use cash my customers had the opportunity to use a card machine since August last year and it's now stable at £1000 a month which is like 5% of my turnover so it's it's just not used the cards in my shop I wanted to come in as well A free to use ATM network is a key component of a healthy local economy we'll take it for granted but maintaining that free and easy access for consumers was absolutely essential for business growth there are some stats which suggest more than a third of high-street spend is contingent on the availability of a cash machine if that goes then that will have a knock-on effect for the local economy and as you alluded to all is not well with the current ATM network I think on the whole it probably hinders rather than helps with the availability of cash in other cases where towns run out of money where the ATMs are unreliable and where they're poorly maintained and I think as Farhan and others mentioned the situation could get a lot worse if plans put forward by link go ahead and this could lead to the closure of many free to use cash machines we don't know how many because the payment regulator hasn't stepped in as yet and ourselves and which have joined forces to bring this issue to attention and to make sure that consumers have that access so far we've got 60,000 people who've signed the petition there'll be a debate in Parliament soon we just urge all committee members to raise this attention with their constituents because not many people know about it and it's likely to have a big impact on urban areas rather than rural areas given the proposals put forward by link but we're just trying to highlight the economic necessity the ATMs provide and if we're not careful we may lose them Just one question for Farhan you mentioned that both your stores are in low income areas you mentioned also about people coming into the shop and drawing £100 to £200 is that the sort of sums that they normally draw? No, no that's not I was trying to emphasise the point that they could draw whether it would be £100 £200 but they would still spend that £15 in the store now if you remove that ATM I've noticed and I think I mentioned it I don't know if I spoke to you in the past about this in the last six months what we've noticed at the end of the month it always happens to be where coinciding with payday for a lot of companies people would draw their money and the ATM and ScopMid next door is always out of cash and that has a direct impact what I'll notice is if we've both run out of cash there will be 25% drop in my business right there and then so not everyone has that ability to use cards but you've got to remember in social and economic deprived neighbourhoods they get the poorest accounts to begin with so they don't have the cards that you and I take for granted they won't have your contact less payments either they only get those old really really basic accounts so it does put them in a much more restricted ability and they don't know any better because they've not been given that facility so they don't know what facility they can actually get whereas you and I will be able to we can walk into any branch any bank right now and be given the best account because we're in a different different financial level that was the point that I was trying to make Dean Lockhart follow-up thanks very much we have a couple of ATM operators with us so I'd just like to get your practical experience if fees are cut as proposed by the link network does that mean operating an ATM becomes unprofitable does it mean that effectively you would have no other option but to close the ATM available or what other options might be available no, in theory if anything it's operating an ATM it's supposed to be more profitable because you're going to end up getting a lot more however in practice if you're coming to my store and you're going to be charged £1.50 per transaction are you going to withdraw £10 or are you going to withdraw that £100 just because you don't want to be constantly paying £1.50 now what if you're again in a socially and economically deprived situation you may not even have that £100 you may only have £10 or £20 to begin with and that means three pounds extra charges for them so that means a reduced spend within the store as well so the sorry I wanted to answer the question that Dean put through what's happening at present is that we've been contacted by a number of members who have been put on them where they've got two choices either the ATM goes or they have to charge for the ATM and the commission the whole of the commission is being taken away that's happening now and that's happening because of the interlink charges being reduced that's absolute fact and I just want to answer one of the questions earlier on our average spend in a store is only £6.28 and on average about three and a half times a person comes into our store a week so and 55% of our customers come from the lowest social economic groups just follow up you mentioned the fee of £1.50 to be charged a pair of use of ATM is that a fixed fee or is it within your discretion as to what you might charge? The fee shouldn't be taken as the £1.50 they haven't set the fee but I'm just basing that on what existing ATMs right now they charge £1.50 but the fee hasn't been set but I would surmise right now if you look at my ATM stats I have a lot of people using my ATM but that will decline substantially you've got to realise I've put in that ATM in my store to save me having to deposit that cash so I don't actually go to the bank to deposit cash at all it just goes straight into the ATM and it gets recycled straight back into the economy and stays within Preston Pans Can I have a final question on this point how often is the machine replenished and topped up and money taken away as appropriate? This is a public forum can I give this to you as a sorry of course Do you have a general percentage that perhaps Pete Chima could assist us with? It normally depends upon turnover but in general about twice a week John Mason Thanks very much Going on to the question of closures specifically I had a Royal Bank of Scotland in Shetleston that was very busy the bank announced they were going to close it and then had a consultation after the decision was made was that an unusual experience for me or has that also been your experience have the banks consulted before they made a decision or is it only after they've made a decision? I'm not aware of the closures around us whether they've done any consultation at all it's just been announced we had a meeting in London with the head of retail of RPS we had another meeting with them yesterday in fact and we've highlighted the fact that there's been no consultation standing in fact there's not been no back-up plan either if retailers where are they going to bank their money what are the banks doing? Second, if I could specifically start on the consultation side and then we'll look at the alternatives afterwards if that's okay because there's meant to be this banking protocol now that says lots of nice things about community engagement impact assessment publication of impact assessment et cetera but that's not been your experience I had a look at that this morning again none of that protocol has been followed Anyone else on that point? I think it's a mixed bag to be honest I think the access to banking protocol is a very nice document but does it govern the closures that happen locally? Not particularly I think that we still see a lot of variability on where the banks are closed the decisions that the bank make in that locality whether or not they consult and generally if they do consult before the closure is announced which often they can't because of commercial reasons they will quite often Could you explain that to me? What we've heard from some of the banks is that because a number of staff are made redundant or redeployed they are limited in what they can tell people whether that's true or not I can't say but what I think the point that I was trying to make is that the access to banking protocol has really mixed up take and what our members tell us is that there's very little ability to input into the consultation because the decision has been made and we don't know any situation where a bank has consulted on the closure there's been significant community engagement and then they've changed their mind Can I just check with all the others do you know of any situation where the bank has changed its mind about a closure? Everyone is indicating I think there was one in the Scottish Warders in Melrose that was due I understand from John Lamont who told me that that may have been down to sub postmaster which would have provided alternative banking provisioners because he was a seriously ill so that RBS decided to keep that one open Thanks so much, I mean I think we are a wee bit pressed for time Can I come back to Pichima you were about to tell me about the alternatives that the bank was maybe suggesting can you give me anything on that We had a meeting with with him yesterday and we highlighted the fact that they've done nothing to proactively promote the alternatives and when we looked at RBS they're now taking away some of their mobile branches as well so they've not talked about their mobile places they've not talked about the alternative where they can bank it or whether the pickups or anything of such and we've asked them to engage yet again with our membership so that we can actually highlight the alternatives I mean specifically on the post office I mean it seems to me if I go into a village or a town that I don't know where would I get money, where is their money the two things you would think of are the bank and the post office so the post office seems the obvious place that the services could be provided do you think the banks are not keen on promoting the post office Well there's two things there I don't think the banks have promoted and most certainly the post office hasn't promoted itself either but also if you were to go into a post office you first of all got to have made arrangements that you can bank your money at that place and if you can I think the maximum limit is only £2,000 per day so there are restrictions upon banking again Sorry Mr McCalloch I think the if you are in a community and your bank closes there's generally three main replacement services you can use online banking and you can use mobile banking units or you can use the post office and each of those have their strengths and weaknesses but given the popularity and dominance of cash they all suffer from similar flaws to take each one in turn Online, yes firms are using the facilities and technology that online and app banking offers but you can't deposit cash using an app to state a rather obvious point and many rural businesses don't have the data or broadband connections to fully use these services you often, I think it was the press and journal last year they pointed out that the majority of the closures in the north-east were in areas that had lower than average UK broadband speeds which presents a problem I think secondly mobile banking units there's been problems for a number of years with these units and we've had one FSB member who was robbed outside their business which was highly, highly regrettable and aside from the security issues there's some really practical issues that we've experienced about information on the routes when are they coming the frequency how long they stay for and the service that they offer and it has to be remembered that a mobile banking unit offers very basic banking services and nowhere they are substitute for a bank branch and I think the news last week or the week before that RBS announced that they would be reducing their mobile banking unit service is a concern because when the closure when the bank closures were announced and they're still being announced their mobile banking unit is usually held up as something that will offset the impact that the closures will have on businesses and if you have a situation as some of our members in rural areas face where they will have literally a couple of minutes a week to do their banking I think it's can you see one visit a week the mobile bank will make and you'll have 20 minutes and that's every local business trying to deposit their cash to get some useful advice from their key contact Going back to the post office thing I suppose my question is could the post office model be improved and developed to give a satisfactory service for example banks used to have a night safe some banks used to have you could put your cash in when it suited you at a different time presumably it wouldn't be beyond the stretch of imagination that somehow at post offices you could have some kind of night safe the issue that you could only use one post office surely that can be changed so that you could use any post office so I mean these seem to me practical improvements that could be made if the post office is the best model and it's already subsidised so it's already got a kind of public involvement I mean is the post office potentially an alternative or is it not I was a sub postmaster for a number of years and I can tell you that the post office is not the answer to the banking issues that are being raised here today nobody seems to understand the amount of money that doesn't get paid to sub postmasters for dealing with cash and no sane person would take it on but a sub postmaster nowadays for £1,000 deposit you'll get paid £20 and for that you have to count the money make sure it's not counterfeit that's a bag it up make sure put it on to your account system and all the rest of it and if he loses £20 he takes a risk of that money he kind of owns it at the time until it goes back to the post office in their security vans but if he takes in one forgery one forgery of a £20 note he's got to count out £20,000 in cash and if you're standing you're a retailer as well now you've got your little post office counter here and your shop here and customer comes in to bank £2,000 in mixed notes all over the place it's going to take him 10 minutes to do that that's way way underneath the national minimum wages meanwhile the chap behind there is wanting to buy £10 worth of groceries for which he's going to make £3 on I totally take the point that the post office system is not working at the moment and it's flawed I suppose my question is that could be sorted for example by the government saying to the banks you've got to contribute a lot more to the post offices that can only be sorted by changing the post office limited management to have ruined the post office but it could be sorted you think it can be sorted if you put somebody in there who's got an idea of how to run a business you'll get the post office sorted and back to where it should be in the high street but at the moment those people that are running this post office have ruined it over the last seven years have destroyed it completely The trouble is that under the transformation scheme that the post office has undertaken they've gone into local post offices so these local post offices only take on 70% of the original services that they once used to offer so in order for that to happen the whole criteria would have to change and there would have to be fundamental training for staff and indeed the cost structure and the payment structure to subpostmasters would have to be substantially improved in order for that to be undertaken and that is most likely to go back to what we had to what we have now I want to also take on and make a point about online banking there seems to be a perception that online banking is free for commercial retailers or commercial businesses it's not it's free for personal banking for commercial banking online banking there are charges and this is happening time in time again it's commercial businesses that are having to bear the brunt of all charges Can you give us just an indication of what that cost is we've had £17 for our card transaction before what's online? Directly, standing orders are predominant they could be anywhere from £13 to £17 depends on what you've managed to negotiate with your own branch so for example if you've got bank line with RBS you could be charged £40 a month to have that facility if you've got bank line light then it's £20 a month so it all depends upon what you have what kind of structure you have how many accounts you have and then in between that every time there's a standing order a check goes out or credit card or cash in even cash out it's all charged for Thank you I think Barry McCulloch and Farhan Ashwick wanted to come back in on that I think just to focus on Mr Mason's points there are a range of practical improvements that could be made to the post office network in a way gently in here given Tim's expertise but one, increase cash deposit limits two, standardise the service there's a lot of variability three, provide an enhanced service for business customers quite often the expertise that a business owner will expect from a bank branch they will expect that to be delivered in the post office that currently isn't the case four, ensure that inter-account transfers are available and five, ensure that currency exchange services are available and that's a critical point particularly given the importance of tourism to the Scottish economy if that facility doesn't exist and if it doesn't exist then we're really missing a golden opportunity there I would agree with everything that Barry has just said and just add when I used to branch with the RBS and they forced me to go to telephone banking I used to call up a day in advance and then get my change the next day now that I'm with the post office still through RBS even though I'm supposed to call up a day in advance and get the change in the next day, I've got a good relationship with my local post office that I can call up in the morning at 9 o'clock and by 10 o'clock I will have my change so that's an exception, that's not generally the rule but I would say the post office model at this current state isn't right but it could be made to be better Pete Sheehan then on to questions from Gordon MacDonald Just to add on to Barry's points another two things that need to happen one faster payments need to need to happen so for example at the moment if you bank into the post office your cash be it under £2,000 at present it still takes two days to hit your bank account it's not whereby if you went into your own branch it would show up straight away so there's a cash flow issue the second point is and it's going back to Tim's point earlier there needs to be a substantial increase in the payment that's been made to sub-postmasters because at the moment if you have a look at their hourly rate it's probably around about £2.50 Gordon MacDonald We've talked a lot this morning about the additional costs to businesses of the changes in banking and the loss of the branch network I mean we've talked a lot about the convenience stores there's also the licence trade there's also cafes and tourism businesses is anybody aware of any analysis that's currently taking place on to the impact and the economy of all these additional costs whether it's security, insurance or the cost of travel etc because I think Peter was you that said there was big issues for the Scottish economy because of these changes any analysis going on at the moment to what the cost of the economy of this would be A layer of one research programme that's currently organised by Highlands and Islands Enterprise we're trying to take that wider overview of what impact bank branch closures will have for the Highlands but otherwise I'm not aware of any other pieces of research and I think we've lately been stuck in the headlights a little bit with just the sheer frequency of the bank branch closures and we haven't as yet taken a step back as a country to look at what impact this will have Is there any indication of what the cost is to an individual business of all these additional costs we've talked about the lost time having to travel to bank the cost of that travel the parking, security, insurance does anybody want to guess how much that is serving on an individual business We were talking about self-filling ATMs earlier on now that increases my insurance costs per annum I think it was a £200 increase per annum for my insurance costs before I had the ATM to after I had the ATM also it takes between two to five days for me to receive that money so once I've put it into the ATM machine once you've taken it out it'll take between two to five days depending on which day you took it out so that increases a potential for a casual crisis I could have a situation where a direct debit or a standing order has been a lot higher than what I was expecting and then not being in a position to pay someone else for goods and it has happened to me a few times and I've had to explain to them that's when the money will come back in again and so that is a cost which isn't seen but it is there One interesting thing I was just thinking about when RBS closed last year they also decided for everybody else decided to put their banking charges up to £70 per thousand from five from £50 per thousand so I looked around for an alternative because it was just too expensive and we'd normally take the money from Coldstream and my wife would bank it in Duns and I found this company that would allow me to bank it in through the post office so I'm very glad to do that and I did that and my bank charges have now halved because I and the money I put in the post office bank account interim bank account immediately and within an hour it's in my RBS bank account for half the money that it cost me before which is good for me but not really good for the people that are dealing with the money including the sub post master Ferran, you talked about cash flow issues I mean in the past small businesses we've all had a relationship with the local branch where they would have been discussed with the manager what the cash flow issues were and how they could support them or business investment getting loans to invest in your business now that the branch network is vastly reduced and there's no longer that access what alternatives are out there for small businesses to get advice about investment or cash flow issues etc I've kind of looked at it in a different way what I've done is I've gone to my suppliers and spoken to them when I've had cash flow issues I've my biggest supplier is United Wholesale and every time I've had a cash flow I've called them in advance I've let them know that this has happened it was VAT I had to pay that time it happened to be a bit higher so they've been understanding that on Wednesday I'll make that payment because that's when the money is going to go back into my account so it has I have teetered on the edge a number of times in this past year it's happened a lot in this past year than it's ever happened in the past biggest problem was it also coincided with the time with my relationship manager being ill for a long time and I wasn't confident in the competencies of the replacements so I didn't really want to be constantly calling because he didn't really understand my needs whereas my RDM knows me and he understands my needs and he could probably find a solution for me but at that point there wasn't and because I created these other networks through suppliers and again this is anecdotal to me it's not across the board I have been able to maintain that and not necessarily have to rely on the banks and given the fact that they're closing down at an exponential rate maybe this is the way where the suppliers are going to stay whereas RBS isn't Anybody else? Dangerously I was just doing some arithmetic if you knew that you would understand why it's dangerous but I was thinking about the impact on productivity and in particular the impact on our members who live in quite remote communities so we have one as we mentioned in the response we have one member who lives in Dornes who has travelled to Ollipill and that's a 3 hour and 10 minutes round trip let's see he does that once a week he'll just working out the staff costs a year that's £1,000 I'd double it if it's twice a week and that's money that could be and should be spent in the business One of the most interesting parts of the town centre review was when he went into town centre and a councillor said did you see our big shiny primary school in the skirts of town what do you think we should put in there the old primary school Malcolm Turnrown said primary school it's the same thing with the bank and probably another close analogy is churches if the banks individually have to tackle this last branch issue they'll all run away from it but if there was an imperative to get them to work together I think we can end up with a last branch in town solution which will be an interim thing but if we aspire to that we should get the banks around the table and even think of the opportunities around credit unions and some of the emerging new disruptors coming into banking because at the end of the day the banks don't want to lose the customers and there is still a desire to have that personal relationship albeit a lot of it's done over Skype or FaceTime or over the telephone as opposed to going in and speaking to somebody face to face but I think we should still aspire to have some form of last branch particularly when you hear the issues that these guys have got around all that but we've always had to pay for commercial banking so that's taken I think Just on that very point you said about the last bank in town and maybe shared banking facilities I mean that was certainly a question I raised with RBS a couple of years ago when he started closing RBS branches in my area and I took one of the community councils along to a meeting with him and their concern about that option was staffing issues security issues different protocols between the branches and competition so as far as RBS were concerned at that time it was a no no not something they would not consider I think they have to consider and if it's not RBS then it's going to be some of the other banks to see that as an opportunity I think the point in time now is the banks basically feeding us all the information from one side and now we're beginning to hear it from the other side we're not asking them to maintain branches for one percent of the population it's the same with churches you go into a Scottish town now there's five churches there's probably only the congregation for one it's a similar analogy with the banks so there has to be a step change these guys know how to run businesses they're smart people they're digitising, they're automating they're looking to the future exactly I think we're running out of time so I'd like to move on to questions from Andy Wightman I know that Pete Cheam and Fernan Ashwick wanted to come in perhaps if you could come in and combine that with the answers to the next questions I just want to follow up the point that Phil Prince has just made in a sense these banks are closing for their own commercial reasons their productivity is extremely low because no one's using the bank and yet it's critical to part of the ecosystem of the local economy not all of the ecosystem part of the ecosystem and therefore it's not a classic case of market failure and I just want to get your impression on the extent to which the private sector can deal with market failure because it's generally not very good at dealing with market failure because whilst you have bits of the economy in the cities for example that are perfectly, broadly resilient to this kind of impact as we've heard, Lachgelli, Darnes whatever the private sector's not going to step in and deliver there so if this is market failure are we not really looking at a solution at the state to come up with to provide what Phil Prince talks about which is the last bank in town to manage that transition from a cash society to a non-cash society Phil Prince I agree with that in certain circumstances the post office isn't going to be a single-ballot solution but a union might be able to help and also community-led initiatives at Collinton, Boberton, Juniper, Green Corry and Bellerno are all branch closures and they're looking how a community bank might look in the future and I think we need to explore that as well because how would a community bank operate as opposed to a private bank and I think it would be really interesting just to see where these guys get to in terms of a community study what does a community bank look like I'd just like to pick up on Phil's point on credit unions one of the things that Prestonpans our area partnership was bringing credit union into Prestonpans they sit twice a week on a Tuesdays and a Thursdays I believe the only problem with that is which is great for consumers but from a business point of view they don't offer business banking facilities because that's one of the things I wanted to do and I've been pushing them and speaking to them in the background but they're not able to now if we were able to make the credit union better make the post office better together holistically we could probably get ourselves out of the situation that the banks are putting us in I guess he's going back to the point that Phil made much earlier today we're looking at solutions when we've already got a solution we shouldn't be closing the last bank in town so I don't see that we need a solution when the solution is already there we need to go back and really talk to these people it's very very clear that these decisions have been made in London and out of the 600 branches that have closed up and down the country up in the UK it's only part of Wales and the whole of Scotland south-west of England that have suffered the most and we've got to take that into context and I wonder sometimes do they really understand Scotland's landscape picking up on that that we have the solution if you have Clydesdale, RBS and Bank of Scotland and the Clydesdale close and RBS is the last bank in town are you genuinely suggesting that the answer is to force them not to close and how does one do that these are private businesses I mean if the state tried to force you not to close the businesses that you own how would you feel? I think the UK Government whether it's down south or up here has a role to play I think if we're talking about productivity if we're talking about the viability of businesses moving forward and if we're really talking about helping local communities then I'm sorry but you guys are going to start stepping in and start talking to these people because they're not going to listen to us individually just before we move on to Jackie Bail would you view it as being correct that banks are private businesses they are underwritten with a financial compensation scheme which is underwritten by the external fund of the United Kingdom is it not? RBS is still owned and there are other banks out there as well but I think the solution is there and I think you guys need to take the action Jackie Baillie I'm curious I think you all have contended in various forms that the access to banking protocol has in effect been breached are there any sanctions attached to it or can the banks just ignore it as they appear to have done so far? Not that I've been aware of we've heard reports that after the protocol was reviewed by Professor Griggs that there be a renewed commitment to the protocol because obviously we're expecting to close many bank branches but it's in effect I don't want to belittle it but it's in effect a paper tiger it doesn't actually do anything practically on the ground and when you speak to business owners who have experienced branch closures and for membership that's about one and two they won't know the protocol has existed they won't have been consulted or won't have been the publication of open information so I think we have big questions about the viability and the effectiveness of the protocol moving forward I wonder if I can talk a little bit about the point explored by my colleague just now because it strikes me the co-ordination between banks is a key issue we've talked about RBS closures but just yesterday Santander sends out an email to Colin Smith, my colleague in the south of Scotland they're closing their branch in Lockerby it's two draws down from RBS who've already announced their closing equally Pauline McNeill tells me there's four branches going in Glasgow one in Mulgai and I'm sure that there will have been RBS branches going in exactly those same locations so I am persuaded of the need to ensure we have a last bank in town I wonder whether the other members of the panel are equally persuaded I know Pete's view but I wonder about the rest of you do you think the government needs to legislate or do something to ensure this happens How has it legislated in the past that the post office is enacted to maintain the last shop in the village they are treated separately they are subsidised heavily and notwithstanding my comments on the current post office management post office can deliver an answer because they can deliver the banking requirements which are primarily what we've all discussed here today cash really and perhaps a few cheques but that for the retail customers is all they do in a bank these days so I must say further than that it goes to lending the other facilities as well and we keep on forgetting about those facilities they are much needy to grow the Scottish economy Tys and then Farhan Ashik I think there's maybe a bit of character and stick required ultimately I would suggest getting these guys into a room and say look this is an issue we're not happy with it you've got corporate social responsibility in terms of how you support communities both residential population and also the commercial businesses and maybe the stick is what do we do with our national investment bank you know is there a role in there that goes beyond just infrastructure and is there a role that maybe perhaps we could support more widely the SME sector so if you don't move on this we can move into that space ourselves if you look at the Lloyds bank who are the owners of Bank of Scotland their pre-tax profits from 2016 was £4.2 billion in 2017 is £5.3 billion it beggars the question you know why are they actually closing this you know they're making huge amounts of profit they're forcing commercial businesses to have an extra burden of costs and they're giving them no choice I just wanted to pick up on Andy you said earlier on to Pete's point that RBS is a private company how can you force them to maintain the last branch I believe there used to be legislation on the books that first banks in town they weren't allowed to close that bank and that I'm sure expired a number of years ago also if we're thinking that that wouldn't eventually the post office be categorised like that as well they're now a private company as well could you technically force them to be the last branch given what's happening there as well just to raise a couple of questions Barry McCulloch just two brief points continue to fight against bank closures and ATM closures often hand-in-hand with MSPs and MPs and that process will continue but I think ultimately the UK Government has to step in and conduct a thorough economic impact assessment and by our estimations we think that after the closure programme there'll be around 700 to 750 banks serving a population of five and a half million and a business population of over 700,000 is that enough what replacements need to be put in place and I think if we're being realistic and accepting that that closure programme will continue which I think it will unfortunately what do we need to do to offset the impacts that FSB members and other businesses face and I think we need to be realistic but we also need to get going very quickly because this is happening now and it will happen continuously throughout the year and I don't think we've bottomed out yet I think more closures are probably soon to be announced so what is that bottom floor what is the minimum service of banking provision that should exist for the Scottish economy all right well thank you very much to everyone for coming in today I'll suspend this session at this point and we'll move into private session