Banks: Cash Withdrawals

Baroness Bryan of Partick Excerpts

Tuesday 11th June 2019 Lords Chamber

Asked by

[Baroness Bryan of Partick]

To ask Her Majesty’s Government what steps they are taking to ensure that banks provide free withdrawals from current accounts at cash machines.

[Lord Young of Cookham (Con)]

My Lords, the government-established Payment Systems Regulator regulates LINK, the scheme that runs the UK’s largest ATM network. The regulator is using its powers to hold LINK to account over LINK’s public commitments to maintain the broad geographic spread of free ATMs across the UK. The UK has one of the most extensive free-to-use ATM networks in the world. Around 80% of the UK’s ATM estate is free to use and 97% of transactions occur on free-to-use ATMs.

[Baroness Bryan of Partick (Lab)]

I thank the Minister for his Answer and welcome the Government’s recent attention to this problem, but we have to bear in mind that the number of free-to-use ATMs that are closing is escalating. The report by Access to Cash Review, published a few months ago, warns that we are sleepwalking into a cashless society that will leave millions behind. Banks are encouraging a cashless economy because they can save on staff and property costs, but these savings are not passed on to customers. Instead, those who use apps and computers become unpaid workers of the bank, and those without access to technology are finding it harder to access bank services. Will the Minister support the proposal by Ged Killen, MP in the other place to ban charges for using ATMs and make banks responsible for giving their customers free access to their own money within reasonable distance from their homes?

[Lord Young of Cookham]

I understand the noble Baroness’s concern for those who do not have access to free-to-use ATMs. I hope she will be reassured that the number of free-to-use ATMs in Scotland increased by 85% between 2008 and 2018, from 2,800 to 5,200. But the noble Baroness’s Question encapsulates a real challenge for Governments today: how do we respond to technological change which is cost-effective, popular, cheap and embraced by the vast majority but, for whatever reason, is not used by a minority? The use of cash fell by 16% last year. Only 28% of transactions were in cash—that figure is forecast to fall to 10%—and 5 million adults apparently did not use cash at all last year. The Government’s policy is quite clear: we want the Payment Systems Regulator to hold LINK’s feet to the fire—to its public commitment to maintain the broad spread of free-to-use ATMs. It has powers of direction and can levy fines to deliver that commitment. On her final question, if you ban charges you lose the pay-to-use ATMs, of course, and might prejudice the existence of the free-to-use ATMs by reducing the revenue stream for ATM owners.