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Scottish MPs set to pile pressure on banks after CAB report

Scottish MPs will today debate how to force Scotland’s main banks to stop turning away people who need a bank account.

The debate, brought by Sheila Gilmore, the Labour MP for Edinburgh East, takes place at 4.30pm this afternoon in Westminster Hall. It was lodged after a report by Citizens Advice Scotland (CAS) found that 1 in 10 Scots are having to survive the economic crisis without a bank account.

The CAS report, Banking on the Basics, was based on evidence both from Scottish CAB clients and from a survey of members of the general public. It found that:

  • One in ten Scots do not have a bank account, although two thirds of people without an account have tried to open one
  • The problem affects at least 5% of Scottish households, which is higher than the rate in the UK as a whole (3%).
  • In the 15% most deprived areas of Scotland, 1 in 5 households don’t have a bank acount.
  • Young people and those living in rural areas are among those worst affected.

Speaking ahead of today’s debate, CAS Chief Executive Lucy McTernan said,

“We raised this issue because we have received strong and consistent evidence about it from CAB advisers across Scotland. Our report showed that banks are refusing applications from huge numbers of people, and this makes life tougher than ever for them as they struggle to get through the aftermath of the recession. We are very pleased that the issue is being debated by MPs and we will be listening carefully to what they have to say.

“Most people who have a bank account probably just take it for granted. But imagine for a moment what it would be like not to have one. The main problem is that you can’t receive money, either from the benefits system or from employers. We have actually seen cases where unemployed people have had to turn down a job offer because the employer wanted to pay them by bank transfer and couldn’t do so.

“The reasons why people are refused bank accounts often relate to poor credit history. 10 years ago the UK government tried to address this by calling on the major banks to make available a ‘basic bank account,’ which would have no overdraft or credit facility, and therefore carries no risk for the bank, but would still allow the client to manage their money.

“This seemed the ideal solution, but our evidence clearly shows that the banks have been refusing applications for such accounts. Sadly, it seems that the major banks are letting people down yet again.

“We believe that everyone should have the right to a bank account, and we are calling on the mainstream banks to facilitate that. We are also urging the UK and Scottish Governments to support organisations who offer alternatives to banking services, like Credit Unions. We would hope that all of these issues would be addressed in today’s debate, and we will be listening carefully to what each of the parties has to say.

“The issue here is exclusion. Vulnerable people in Scotland are being financially dis-enfranchised. The very people who need the most help are being once again left behind.”

CAS staff are available for interview - either recorded in advance or live on Wednesday. For more details please contact Tony Hutson on 0131 550 1010 or 07774 751655.*

*Please note these numbers are for the CAS Press Office and are for use only by news journalists.

For other departments at CAS the switchboard number is 0131 550 1000.