Fury at watchdog's Barclays link

The Barclays connection has dismayed campaigners

By BBC News Online's political correspondent Nick Assinder

The government's rural watchdog is under attack for banking with Barclays, which has shut scores of rural branches.

It has emerged that the Countryside Agency - which advises the Department of the Environment - uses the bank which last month sparked a storm of protest by shutting 171 local offices with the loss of around 7,500 jobs.

The news has dismayed countryside campaigners, and MPs are set to raise the issue in the Commons next week.

Working for people and places in rural England

Countryside Agency
motto

It will heap embarrassment on the government, particularly environment minister Chris Mullin, who recently told Barclays' customers to "vote with their feet."

The agency - motto "working for people and places in rural England" - puts millions of pounds worth of business with Barclays every year.

It was created by Labour with the merger of the old Countryside Commission and the Rural Development Commission.

Its aims are to: "Conserve and enhance the countryside, to promote social equity and economic opportunity for the people who live there and to help everyone wherever they live to enjoy this national asset."

It is also particularly charged with advising and influencing the government on key issues affecting rural England.

It seems quite incongruous

Dr Vincent Cable MP

Liberal Democrat environment spokesman Matthew Taylor said: "It seems odd that the Countryside Agency, which was set up by the government to help protect the countryside is putting money into a bank which is closing hundreds of rural branches."

Twickenham MP Dr Vincent Cable, who headed a parliamentary protest at the rural bank closures, declared: "It seems quite incongruous that a government quango with the express objective of promoting preserving the countryside should choose to bank with an institution which has been in the fore of pressing ahead with the closure of banks in countryside areas."

He intends to raise the issue with the government in the Commons next week.

A spokesman for the agency confirmed it banked with Barclays but stressed that the business goes out to tender every five years to get the best deal.

But it is unlikely there can be any change in the contract for another three or four years.

Barclays was condemned for closing rural branches

Barclays was hit by a huge protest when it insisted it had to shut rural branches or risk going out of business.

The move cost some 7,500 jobs and an estimated 40,000 customers lost their local banking service.

Some shareholders were particularly angry that the closures came as the bank's chairman Sir Peter Middleton saw his salary rise from £408,000 in 1998 to £1.76m last year.

Tony Blair has already been accused of failing to help the countryside.

Most recently he was heckled during his controversial speech to the Women's Institute conference when he spoke about his plans to save rural post offices, which many think will fail to stop hundreds being lost.

The chairman of the rural group of Labour MPs, the Wrekin's Peter Bradley, has called on the government to consider new laws to force banks to take their responsibilities to their customers seriously.