Simon Read: Leaving customers in the lurch should not be the mutual way

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."

s.read@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

PROMOTED VIDEO
Life and Style
life
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee