Barclays 'boycott' row deepens

Barclays: Under attack over rural closures

The government has distanced itself from a junior minister's call for customers to leave Barclays Bank unless it stops closing down rural branches.

Alastair Campbell, the prime minister's official spokesman, and Trade and Industry Secretary Stephen Byers have both sought to play down comments by Chris Mullin, which have provoked an angry reaction from the bank.

Speaking two weeks ago in a Westminster debate, Mr Mullin said that the bank's customers "should vote with their feet" over a planned closure of 172 rural branches throughout the country.

But on Tuesday, Mr Campbell denied that the minister was calling for a boycott, and said he was telling individual customers to make up their own minds.

Angry debate

Speaking in two Westminster Hall debates on rural banking, Mr Mullin sided with MPs who said that the Barclays plan would be a disaster for rural communities which relied on the branches to keep money in the local economy.

Chris Mullin: Closed Barclays account in 1970s

They said that the speed of the planned closures would leave little time for rural Post Offices to step in and establish long-term alternative systems for Barclays customers keep cash in their communities.

"We consider that access to financial services is a vital element in achieving rural development and eliminating social exclusion," said Mr Mullin on 15 March.

"I hope that Barclays is prepared to reconsider its proposals until such time as realistic alternatives are available.

"But if it is not, customers must vote with their feet."

Two weeks later, he added to the comments, accusing the bank of only "serving the prosperous".

He warned that while "no amount of exhortation" from ministers would affect Barclays' decision, the actions of the customers would.

Mr Mullin said that he had used the tactic himself during the 1970s when he closed a Barclays account in protest against its involvement in South Africa.

And he predicted that a possible move in the Welsh Assembly to close its £3bn account would ring "a bell or two in the appropriate quarter".

Bank angered

Barclays described Mr Mullin's remarks as "irresponsible".

"This is a difficult week for ourselves and our customers," said the spokesman. "We have had an ongoing dialogue with MPs and pressure groups.

"Customers are changing the way they bank and we need to respond quickly in a competitive world."

'Personal choice'

But Mr Byers said: "These are matters of personal choice for individual Barclays customers

"The important thing is that we have competition so that members of the public can choose. Chris has made his own personal view very clear and it is only right and proper that he is able to do that."

Tory leader William Hague dismissed any Barclays boycott as "futile".

"It is a bit of a cheek for the government, which has attacked rural areas, jacked up petrol prices, hit rural post offices and insisted that people should be paid through bank accounts just at the time that the banks are withdrawing from the rural areas.

"If they wanted to boycott anything, they should have boycotted their own government.

"I do not in any way defend the decisions of Barclays Bank, which I think are outrageous and are having a serious effect on rural areas, but I think they will find that a boycott is futile because millions of people are not going to heed it.

"What we need is for the government to recognise the needs of the rural areas, as well as the banks."