Customers of Virgin Money, including myself, recently received a letter from the bank informing us that our branch at Vicar Lane will be closing permanently from 26th January 2022 and that if we need to visit a branch we would now be expected to travel to Sheffield city centre.
I met with senior managers from Virgin Money to express my huge disappointment, both as the town’s MP and as a customer of 25 years and more, at the proposals to close this branch. We had a detailed and candid exchange of views and I have to say that there was not the slightest suggestion that the bank was consulting on this decision, simply notifying people of the fact that the bank will close. I feel strongly that it is a kick in the teeth for Chesterfield and their customers here and I intend to go through the hassle of moving my account in the light of this decision as it appears clear that there is no possibility of the branch remaining open.
I am very concerned about the impact this will have on older and more vulnerable customers, who may not be able to travel to Sheffield, and requested that they consult with customers, as well as inform them, to discuss whether mobile units or satellite branches would help.
I also feel for the excellent staff there, who are now facing redundancy, and who I have always found extremely helpful. There have been a number of bank branch closures in Chesterfield over the last few years, forcing many constituents, particularly older ones who do not use Internet banking, to have to travel several miles to access their bank. Across the country, we have seen a 22% reduction in bank and building society branches and, whilst I appreciate that these decisions are commercial, there appears to be a lack of concern from the Government about these closures. The removal of branches is not just bad for local residents, but also for businesses. Evidence from a recent report on the Financial Health Exchange website states that:
“Before a branch closure, lending for SMEs within a given postcode grows from one quarter to the next by 2.13% on average. But after a branch closure in that postcode, average Q-2-Q growth in SME lending drops to only 0.79% – a staggering 63% reduction. This reduction in the growth of SME lending both reflects and drives lower demand, meaning businesses have less opportunity to sell, grow, and provide employment. This weakens local business confidence, and ultimately results in higher rates of business failure”
The relationship between banks and small businesses will be vital in our efforts to recover from the economic effects of the pandemic and we need to see the Government taking a proactive approach to protect bank branches. I have written to the Business Secretary and the Chancellor regarding my concerns, but the responses have been extremely disappointing. The Government state that “they cannot reverse the changes in the market and in customer behaviour; nor can it determine firms’ commercial strategies in response to those changes. Having the flexibility to respond to changes in the market is what makes the UK’s financial services sector one of the most competitive and productive in the world, and the Government wants to protect that.”
Whilst we can all understand the change in demand as more people use online banking and use less cash payments, bank and building society branches are vital for local businesses and residents. Post Offices are already stretched, and they cannot offer the full services that people require from their bank. The Government cannot simply leave this to market forces, or we will continue to see the closure of more and more branches.
I will continue the fight to keep as many bank branches open as possible, but with such a laissez-faire attitude from the Government, I fear that Virgin Money will not be the last high street branch to be lost from our town.