Simon Read: Leaving customers in the lurch should not be the mutual way
Saturday 19 March 2011
Closing branches and leaving customers in the lurch is what we expect from our profit-hungry banks. So hearing that some 670,000 people in south-east London will lose all seven branches of a financial institution in the next two months, it sounds like business as usual. Until you discover that the firm pulling out of the area is the UK's biggest building society.
The Nationwide has announced plans to shut its branches in Blackheath, Catford, Elephant & Castle, Greenwich, Lewisham, Peckham and Woolwich by the end of May. The latter only opened three years ago in what Nationwide's boss, Graham Beale, described as "a prime example of the investment and commitment Nationwide has in its branch network".
Does the withdrawal mean that the Nationwide no longer has a commitment to its branch network? News that it is shutting branches in north London as well as two in Swindon, where the mutual has its head office, is also of concern. The society says it has advised customers of "branches nearby", but the nearest are in Bromley or Eltham. Labour MP for Greenwich and Woolwich, Nick Raynsford is angry.
"How can a building society, with cooperative roots and a supposed commitment to mutual banking, effectively walk away from the whole of the inner south-east London region?" he asks. Yesterday he took his concern to Parliament, hosting an adjournment debate on the issue in the House of Commons.
The Nationwide defended the closures by saying that the branches are "no longer economically sustainable". But the move will leave many of its customers too far away from their nearest branch. Does that mean they will be financially excluded? In all the south-east London areas affected, there remain bank banches so the short answer to that is no.
It means the building society's withdrawal won't leave local people without access to banking services. But it will leave their customers in the area with a stark choice: bus or train to their nearest branch or shut their accounts and move to one of the banks that still offers local services. I wouldn't normally advise people to close their building society account and move to a bank, but for anyone in the affected areas who needs to visit a branch, that looks like their only option.
But doesn't the Nationwide have the right to shut branches where it is losing money? How would customers feel if they were told that the cost of their mortgage was rising to cover the expenses of keeping uneconomic branches open? The short answer, I suspect, is that most would rather have better value financial products than know that their mutual was serving customers across the country, even in disadvantageous areas.
It's clear that the Nationwide has to remain profitable to continue, so closures of branches are inevitable. If it was the last branch in town, that would be a different issue, and then I would hope the government would step in to help ensure that the building society – or indeed any bank in a similar position – could afford to maintain the branch.
But accepting the loss of a few branches is a little different to accepting that the Nationwide is right to reduce its branch network. Some worry that May's move may only be the tip of the iceberg as the Nationwide streamlines its business even more into concentrating on profits rather than people. So I'm happy to remind the mutual of its commitment to its customers who do, after all, own the business.
Children will suffer most from cuts
next week's Budget is Chancellor George Osborne's opportunity to reverse policies that are threatening Britain's poorest families. As children's charity Barnardo's points out, things will get tough for struggling families in April due to the Government's reforms.
From next month working parents will only be able to claim for 70 per cent of their childcare costs, rather than the current 80 per cent. On top of that they will need to work longer – for 24 hours instead of 16 a week – just to qualify for working tax credits.
"If this mounting pressure on poor families is ignored, we are storing up even greater trouble for the future," warns Anne Marie Carrie, chief executive of Barnardo's. "Employment is the only long-term route out of poverty.
"With almost 60 per cent of children living in poverty having a parent with a job, it is imperative that they are not left worse off through work – yet the Government has created disincentives to work which need to be re-assessed and fast."
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Returning to the stage after 20 years makes actress feel 'nauseous'
Top conservatoire offers ‘groundbreaking’ arts degree
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
- 4 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
- 5 Kanye West halts concert after two fans don't stand up - doesn't realise one is in wheelchair and the other disabled
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony