Financial Services and Markets Bill (Seventh sitting)

Emma Hardy Excerpts

Committee stage
Tuesday 1st November 2022 Public Bill Committees

[Siobhain McDonagh]

I do not believe that the regulator, the FCA, will force through free access to cash unless we legislate for that. As Members, we are responsible for that. I suppose I am trying to say that hon. Members are doing their job excellently by highlighting concerns in their constituencies. Even though we have been through a very rough time in politics and a lot of our constituents are unhappy about the turbulent times we have entered, many of them still have faith in democracy, party politics and our system because Members do that sort of work. I believe that we need to follow through when we are given the power to do so.

I have more. The point was even more strongly expressed by the hon. Member for West Bromwich West, who made a powerful speech. Following HSBC’s decision to close its branch in Wednesbury, he gave this message to his constituents:

“The argument of go to West Brom is not good enough! I am determined to fight this”—

good on him!

The hon. Member for North Warwickshire described the impact on local residents as “obvious” when the Lloyds Bank branch closed, leaving Coleshill High Street without a bank branch. As an MP for a rural constituency, the hon. Member for Hastings and Rye detailed her concerns to our witnesses last week about her constituency being able to access cash free, and about the distance her residents would have to travel otherwise.

I do not doubt that my constituency neighbour, the hon. Member for Wimbledon, shares my concern about the loss of cash machines and bank branches in Morden town centre, which we share. One of the only remaining free-to-use ATMs is hidden in a Cashino—an arcade. That is extraordinary.

Government Members need not worry: the new Chancellor shares their view. He was pictured in the Alton Herald just last November celebrating the arrival of a new free-to-use cash machine in his constituency. I say to the Minister: do not worry. If these amendments pass, the Chancellor is right behind you.

Given what appears to be an overwhelming consensus on the issue, I hope Members on both sides of the Committee acknowledge that the Bill needs to be amended to ensure not only that there is access to cash but that there is free access to cash. They will be lauded in articles in their local newspapers and posts on Twitter and their social media for passing these amendments.

[Emma Hardy]

It is an absolute pleasure to follow my hon. Friend the Member for Mitcham and Morden, who is just awesome. Is awesome a parliamentary word? It should be. On a personal level, let me say how much I enjoy being on the Treasury Committee with such incredible Labour women. It is brilliant—inspiring.

To follow on from a couple of points that my hon. Friend made, I hope the Minister’s response will touch on the baseline geographical distances between free cash points. It frustrates me immensely that in one of the poorest estates in my constituency, the ATM charges £1.50 every time people use it. We would like some details about the geographical distances between the places where people can access free cash.

We should also look at why businesses do not take cash. As my hon. Friend said during the evidence sessions, it is often because there is nowhere for them to deposit it. If we are to make access to cash free, which I completely support, we should also help businesses to take cash. There is no point having free cash if it cannot be used. Bank or other branches should accept cash, and we should look at the geographical distances.

I got a bit frustrated when banks were closing branches in my constituency, because they said, “Well, the other one is only one-point-however-many miles away, so it’s fine.” I said, “It is not easy for people to get to.” There is sometimes an assumption that everyone is able to drive and has the mobility to go around and find a free cash machine, but that is not always possible. Can we look at geographical distances, at businesses accepting cash and at ensuring branches accept cash so that businesses can pay it in? My hon. Friend made a powerful speech on cash access and the principle that people’s access to their own money should be free.

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[Andrew Griffith]

As part of the research for this debate, I looked at the prevalence of free-to-use ATMs in the constituencies of members of the Committee. My quite rural constituency is somewhat bereft compared with the embarrassment of riches, surprisingly, in the constituency of the hon. Member for Kingston upon Hull West and Hessle, which has a staggering 120 free-to-use ATMs, reportedly. That puts many of us to shame.

[Emma Hardy]

One hundred and twenty?

[Andrew Griffith]

That was the figure supplied to me; I will happily correct the record if that is not the case.

[Emma Hardy]

I am astounded that there are 120. I would be grateful if the Minister could show us a map of where they are, because I certainly have not found them. What can I say? We like our cash in Hull.

[Andrew Griffith]

Very good.

Until this moment, there has been no substantive legislative framework for access to cash. No regulatory authority has the legislative responsibility or powers to ensure that cash withdrawal and deposit facilities are available for people and businesses to use. We should not underestimate the degree to which the Government are moving on this important issue.

Clause 47 addresses cash access in statute for the first time. It introduces schedule 8, which sets out a legislative framework granting the Financial Conduct Authority responsibility to seek to ensure that there is reasonable provision of cash deposit and withdrawal services across the UK. It also gives the regulator the powers it needs to fulfil that responsibility.

The hon. Member for Wallasey talked about the pioneering work by the Treasury Committee. We should all celebrate this clause; we should celebrate the achievement of this House in significantly moving forward the protection for access to cash. We just need to remember that what we are talking about here is a very small increment—from the statutory protection of access to cash, to the precise terms on which that is agreed. I understand that there may be different views on that, but we should not allow that to detract from the significant advance on access to cash that the Bill represents.

The Treasury will publish a policy statement in due course, and doing that “in due course” is the right thing to do. There will be the right moment to do it—

--- Later in debate ---

[Andrew Griffith]

I am a big fan of taking one step at a time, and the step in front of us today is to pass clause 47 and put it on the statute book—to make that very significant advance in the statutory protection of access to cash. I look forward to continuing my tenure and engaging with the hon. Lady, and it seems appropriate for us to bring forward the policy statement very rapidly once Royal Assent has been achieved, taking this important topic step by step.

The hon. Member for Kingston upon Hull West and Hessle nodded vigorously at the obligations on the FCA to collect more data. I think that that is absolutely right. One challenge, as cash potentially diminishes over time, is to ensure that we nevertheless have the right and detailed datasets in order to continue to protect our constituents.

[Emma Hardy]

Without wishing to return to a previous debate, one way we could ensure that the FCA collects data is to ensure that it has regard to financial inclusion.

[Andrew Griffith]

The hon. Lady has made that point powerfully, and I assure her—notwithstanding the disappointment that I seem to continue to cause to the hon. Member for Hampstead and Kilburn—that that has lodged very firmly with the Government and is something I would hope we can continue to discuss before Report.

The provisions introduced by clause 47 are vital to support those who continue to use cash. With that, I recommend that the clause stand part of the Bill.

Let me now turn to the amendments. Amendment 40 would change the description of schedule 8 in clause 47 to refer to free-of-charge cash deposit and withdrawal services. Amendments 16 to 18, in the name of the hon. Member for Mitcham and Morden, concern free access to cash. There is a commendable focus on this issue from Members on both sides of the Committee, and we heard the intervention from my hon. Friend the Member for West Bromwich West about his constituents and their vulnerabilities.

The Government do not believe that it is appropriate for legislation itself to stipulate that access to cash must be free. Let me try to explain why, because I understand the consternation of some hon. Members. This very significant step forward having been taken to protect statutory access to cash, the Government are concerned that taking a blanket approach might have unintended consequences and leave us stuck with legislation that is too prescriptive. In turn, that might stifle innovation by industry to support cash access. For example, ensuring the free provision of cash for certain vulnerable consumers is quite different from ensuring provision for business customers, which could be delivered through different solutions.

The provisions in schedule 8 ensure that legislation provides appropriate flexibility now and in the future. Consistent with a lot of the debate that we have heard about the independence of regulators and the regulatory model being baked into financial services regulation since the Financial Services and Markets Act 2000, the Government believe that the FCA is best placed to deliver a sustainable, agile and evidence-based approach to managing cash over time in order to respond to the needs of people and businesses. The FCA has the flexibility and powers to do that.