(9 years, 6 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Charlotte Leslie (Bristol North West) (Con)
I am grateful for the opportunity to bring this subject to the House. Most of us are lucky enough to take for granted that when we need cash, we can go to the nearest hole in the wall and access our money for nothing without being forced to pay for the privilege. However, many of us do not know how lucky we are. In almost 300 areas of the UK in the bottom quartile of deprivation measures, approximately 300,000 residents are more than a kilometre from an ATM where they can access their money for free.
Thanks to action from LINK, the ATM network, and the work of the right hon. Member for Birkenhead (Mr Field), the situation has been getting better over time. Back in 2006 there were more than 2,000 areas without a free ATM. However, the fact that in 300 of some of our poorest areas people still have to pay through the nose to access their own cash is nothing short of a disgrace. One of those areas is in the ward of Lockleaze in my constituency.
LINK produces a financial inclusion map of the UK, showing distances from the nearest free-to-use ATM. Lockleaze can be found by locating the great gaping hole over Bristol. That is Lockleaze, one of the 300 official “outstanding financial inclusion areas”. In plain English, that means people there simply cannot access free cash withdrawals.
Lockleaze is an amazing, warm and vibrant community. It is where I go to church—a shout-out to St James’s—followed by a proper Sunday roast, tea and the Sunday papers at Cookies Cafe on Gainsborough square. But if a customer needs cash for their roast chicken and spuds at Cookies, or indeed for anything else in Lockleaze, the only ATM within a kilometre charges £1.85 for the privilege of accessing their own cash. That would make anyone angry, but for those on jobseeker’s allowance, struggling and able to afford to withdraw only small amounts at a time, it is simply a massive and unaffordable hit. Do not forget that over 7 million people, often our poorest, rely on cash for their regular payments for gas and electricity meters.
The grim irony is that so many of the communities without access to a free ATM are, like Lockleaze, some of the most deprived in our country. The Lockleaze community is warm, strong and vibrant despite the fact that it is among the top 10% poorest areas nationally. Many in Lockleaze simply cannot travel the distances to access cash for free, so they are literally trapped. To put that in context, in another ward in my constituency, Westbury-on-Trym, which is not financially struggling, there are at least six free ATMs just around the war memorial roundabout. It is simply wrong that our least well-off should have to pay the most to access their money.
It is not good enough just to talk about these things for a few months, maybe set up a Facebook page, get a few “likes”, drop a few leaflets, have a bit of a whinge and then move on; it needs to change, and it needs to be sorted. And it can be. In just a few weeks of working on this, I am delighted to report that LINK is coming to do a reccy of Lockleaze next week, when we will discuss potential providers and look at the venues that have come forward. We have already found a willing potential venue in The Hub community centre, and we are already talking with interested potential providers of a free ATM.
Many of the problems we hear about in this place seem insoluble, but this is one that we can demonstrate is not. It shows what can be achieved if the issue is properly highlighted, sleeves are rolled up and real work is put in. This is not an insoluble problem. If we can sort this out in Lockleaze, it is not only individual residents who will benefit, but the whole community.
Lockleaze is seeing welcome investment and development in the area. It already boasts, as I have mentioned, an amazing community café called Cookies, run by the amazing Lou and her family, as well as a pharmacy, a newsagents and a smoothie and vegetable bar, and there is more to come. However, if people have to go elsewhere to access their cash, those who can will, and they will spend their cash elsewhere. That will leave the people who cannot travel to access their cash trapped, and it means that all this new welcome investment and the new businesses moving into the area will wither on the vine.
What can be done? The Minister will be relieved to hear that I know that the Government cannot simply sprinkle magic dust cash machines around the country. However, I wonder whether the Government could work more with the industry to identify quickly these free cash deserts, make the data more widely available and prioritise ways in which organisations such as LINK can help bring free ATMs to these free cash deserts. I am a reluctant user of regulation, but perhaps the Government could consider whether it might be possible to introduce banking regulation to mandate the provision of free cash machines by population area.
Finally, we must look at the incentives in place for shops, in particular, to act as free ATM venues and providers. I urge the Government to review the application of business rates to ATMs, and the shops that provide them, to see whether that is deterring provision. I urge local authorities to consider greater use of discretionary relief to exempt shops with free ATMs. I urge my fellow MPs—it is a pleasure to see colleagues here this evening—to look at LINK’s financial inclusion and exclusion map, which is a very interesting document, and ask themselves whether some of those 300,000 people without access to free cash withdrawal are their constituents. These actions can all be taken at a national level to help to eradicate this appalling silent ball and chain around some of our most challenged communities—but Lockleaze needs action now.
To LINK, which is coming to Lockleaze in the next few days to help find a solution, I would say, “Thank you—there is no more deserving community.” To The Hub, which is considering accommodating the ATM and has been so practical and helpful, I say, “Thank you—tell me what else you need.” To the interested free ATM providers who have been in touch, I say, “Welcome. Lockleaze is brilliant. It’s an amazing, vibrant community. It’s going places—get in there before your competitors do.” Finally, to the people of Lockleaze, I say, “We need more than words—more than moribund Facebook groups and forlorn little leaflets.”
Jim Shannon (Strangford) (DUP)
We have similar problems in my constituency, where ATMs are not as available as they should be. I am sure that the Minister will be able to address the issue of how we can encourage banks and building societies to put in ATMs. Perhaps she can also consider raising the awareness of those who use credit cards for withdrawals and should be using debit cards instead. If some of these issues were addressed at this level, that would greatly assist in enabling people to get better access to cash withdrawals without charges.
Charlotte Leslie
I thank the hon. Gentleman for his intervention. He makes an absolutely superb point about financial education and information, which could perhaps empower people to kick up a bit more of a stink about the fact that they are having to pay £1.85 to access their own cash. Often people are just getting on with it—life is pretty tough and they do not want to complain and kick up a fuss. Those people should not be having to pay this money. We should empower them to say “No, this isn’t right and we shouldn’t have to put up with it”. I hope that the Minister will address these points.
A lot of words are said in this place, but we need more than words. It is encouraging that action can be taken when Members raise matters and sleeves are rolled up, but I never promise anything before it is done. However, I do promise my constituents—this might be a slight beacon of hope for other people across the country who cannot access free ATMs when they should be able to—that I will do everything I possibly can to end the scandal of lack of access to their own cash in Lockleaze. I have every faith that the Government will do everything they can as well.
The Economic Secretary to the Treasury (Andrea Leadsom)
I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing this debate on an incredibly important matter. She has presented her case very eloquently.
I assure the House that this Government are committed to helping ensure the most vulnerable people in society have access to the banking services they need. That is why we took action to tackle payday loans, placing a duty on the Financial Conduct Authority to impose a cost cap. The Treasury, as widely reported, has been in discussions with the banks on improving the minimum standards for basic bank accounts. Only a few weeks ago, I hosted a round-table meeting with senior executives from the UK’s major banks. As part of that discussion, I set industry the challenge of coming up with new and innovative ways in which ATMs can be used to offer a wider range of banking services to consumers. I look forward to hearing back from the banks later this month. One of the most fundamental banking services—the subject that my hon. Friend has raised—is the ability of customers to be able to withdraw their own money conveniently, and free, at ATMs.
Forty-four years ago, the Enfield town branch of Barclays bank opened the first ever automated cash machine in the world—another first for the British retail banking industry. Since then, the ATM sector in the UK has been in a state of constant progress. The number of cash machines has grown from 36,000 in 2001 to over 67,000 this year, making cash far more accessible to customers. The number of free-to-use ATMs is at an all-time high, and over 97% of all ATM cash withdrawals by UK cardholders are made free of charge. Pay-to-use machines now account for only 3% of the total volume of transactions.
It is important to recognise that, in areas with greater need for free-to-use ATMs, LINK—the network that connects the UK’s ATM machines—provides subsidies to ATM providers to allow them to offer services under its financial inclusion programme. The LINK scheme is unique in Europe: it allows banks and building societies to give their customers access to cash from any ATM across the UK, no matter which bank they hold an account with. That gives customers universal access to their cash without the need to walk into a bank. Across much of the rest of Europe, pay-to-use machines are the norm and the cost of withdrawing cash is not transparent. By contrast, as I have said, the vast majority of machines in the UK are free to use, and those that are not must be very transparent with their pricing, as per LINK rules, so ATM customers typically get a good deal in the UK.
As my hon. Friend has pointed out, however, some cash machines do charge customers for the withdrawal of cash. These machines are typically operated by independent, non-bank providers, which install ATMs in areas with a low footfall and that tend to be in rural or less well-off communities where banks feel it is not commercially viable to operate a free-to-use machine. The fees they charge need to be completely transparent prior to the customer withdrawing cash, and ensuring that the service is commercially viable is the reason for independent ATM machines charging those fees. If independent ATMs could not charge, they might withdraw entirely from these sites, which would risk leaving the rural and more vulnerable communities with reduced access to cash.
I completely understand, however, the concerns of my hon. Friend and the hon. Member for Strangford (Jim Shannon) regarding pay-to-use machines in less well-off communities. I am well aware that it is precisely in those disadvantaged communities that people most need affordable cash machines nearby without having to take public transport several miles to use one. Many hon. Members have made compelling cases for areas in their own constituencies. The right hon. Member for Birkenhead (Mr Field) has made representations to me in the past.
I am pleased to inform hon. Members that a programme of work is under way to address exactly that issue. LINK has developed the financial inclusion programme, which sets up free-to-use ATM machines in areas where they are most needed. The programme provides subsidies of £1 million per annum to ATM operators to allow them to operate commercially viable free-to-use ATMs. The cost of this subsidy is shared out among LINK members. Through the programme, 1,400 target areas, mainly in rural and less well-off places, have access to an industry-subsidised ATM. In the remaining difficult locations, such as areas with low population or those with a lack of suitable installation sites, LINK has launched specific, individual projects to address that and reports regularly to the Government on progress.
Jim Shannon
ATMs could be set up in post offices, because there are lots of them. There have been some discussions about this issue with the banks in Northern Ireland. Has the Minister given any consideration to setting up ATMs in post offices, where they would be accessible for people in rural communities?
Andrea Leadsom
I am grateful to the hon. Gentleman for raising that very good point. In fact, precisely one of the challenges I gave to the banks during my recent round table with them was to look at what more they could do to put ATMs in easy to access sites such as post offices and supermarkets.
My hon. Friend the Member for Bristol North West is quite right to question the fairness of pay-to-use machines in less well-off areas. However, where customers feel that an area lacks a free-to-use ATM, LINK has made a commitment to assess that location for the suitability of establishing one. As the number of target sites reduces, LINK also has a programme of identifying new segments of consumers for whom there may be access issues. LINK is working with Age UK and Toynbee Hall on specific projects, such as the “Older old” and “Deprived inner-city housing estates” projects, which aim further to improve access to cash for those more vulnerable members of society.
My hon. Friend’s mentioned that Lockleaze in Bristol North West has just one pay-to-use cash machine for 10,000 people. I have looked into the case, and I agree that it is absolutely unacceptable. My officials have contacted LINK, and I am pleased to say that, as she pointed out, it has committed to bringing the area into the scope of its financial inclusion programme. LINK has offered to visit the area to understand any further issues that her constituents are facing in accessing cash and locating free-to-use ATMs in the area.
In conclusion, I believe that the ATM sector is currently working well for consumers. The number of pay-to-use machines is low—only 3% of transactions are made from those ATMs—and the availability of free-to-use machines continues to rise. LINK membership rules offer consumer protection, particularly with regard to transparency of fees. The industry is taking action. For communities that have a greater need for free-to-use machines, LINK is setting them up in many places, and it is looking at how it can help segments of society that currently have difficulties.
I again thank my hon. Friend for raising this important issue and for bringing it to the attention of the House. I assure her that the Government and I will stay closely involved in this issue.
Question put and agreed to.