ATM Closures

Gregory Campbell Excerpts

Tuesday 4th December 2018 Westminster Hall

[Ged Killen]

I thank the hon. Gentleman for making that point. He came along to an event I held in conjunction with Which? where that information was available to Members from across the House. Many Members were surprised to learn just how far apart ATMs are in their constituencies, and how vulnerable each of those areas would be if something happened to one of those machines.

The 1 km rule just is not working. Even if it were, things can go wrong quickly when one of the last remaining machines develops a fault or runs out of cash. I stopped off in Ballantrae in South Ayrshire over the summer recess, which seems a long time ago now. When I went to use the ATM, I discovered it was out of service. There is a post office counter in the local shop—we would need an entirely separate debate to talk about the pressure post offices are under to try to meet the gap in services created by the banks—but when I went into the shop to inquire, I discovered that the next-nearest ATM is more than 20 km away, or almost 13 miles in old money.

The other issue is that it is difficult to take account of local circumstances in applying the 1 km rule. In Cambuslang in my constituency, both free-to-use ATMs at either end of the main street are—excluding the other—within 1 km of another ATM, but those alternative ATMs would be not just inconvenient but very difficult to get to for anyone who experiences mobility issues. The closure of either ATM on the main street would have a massive impact on the small businesses in that area, which are already really feeling the pressure.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing this timely debate. Does he agree that in coastal towns—particularly in my constituency but in others, too—we sometimes see the dilution of ATMs? A filling station might open with an accompanying shop and ATM, but the ATMs in the town centre might close, thereby exacerbating the problems we have with reinvigorating our town centres.

[Ged Killen]

The hon. Gentleman is absolutely right. He makes an excellent point about the existing pressure on our high streets. Removing ATMs and other services does not help that pressure one bit.

LINK has now been given a specific direction by the PSR to review its financial inclusion programme, due to its failure to protect the spread of free-to-use ATMs. However, I have little confidence in the regulation of the sector. LINK’s changes to ATM funding were the PSR’s first major regulatory hurdle. In my view and that of many stakeholders, it fell at that hurdle. Common themes related to the reporting of issues and access to the financial inclusion programme have been reported by those involved in the industry pretty much since day one. I sat across from the PSR and explained the concerns I had heard about the closure of free-to-use ATMs and about their operators, and from the many people who are against the cut to LINK’s interchange fee, and I was met with silence. On every occasion when concerns were raised, the PSR failed to act. Only latterly has it taken action.

--- Later in debate ---

[Jim Shannon]

My hon. Friend makes a salient evidential point, which contributes greatly to the debate. The removal of any ATM services will have a further, extreme impact on rural communities and convenience shops. It must be remembered that currently there remain more cash transactions than any other method. We need to ensure that cash is available to people as they need it and that we do not return to people hiding money in the house because they cannot easily access their cash.

I live in a community where it is not unusual for people to keep their money at home. Those of an elderly disposition more often than not even keep their savings there. A few years ago my wife’s aunt was burgled and lost her life savings as a result of two people taking advantage of a vulnerable lady with poor eyesight. More than one constituent has told me that since the latest banking crash they lift their money after pay day and keep it at home. That is not safe and it is not what we advocate. It must also be remembered that many ATMs provide other services such as pin number changes and balance inquiries. For those who do not have reliable broadband at home, these machines are essential for the correct control of finances. These problems make the ATM debate so important.

Polling research by Which? found that cash remains popular and important. The research showed that almost three quarters of people, or 73%, use cash at least two or three times a week, including 60% of 18 to 24-year-olds, which is quite interesting. Only 5% of people use cash once every three months or less, and the majority of consumers still rely on cash in some circumstances. Which? magazine research further found that 57% of consumers say that they have experienced a situation in the last three months in which they could only pay by cash. Two thirds, or 67%, of people say that cash is important for making small purchases, and six in 10 say that it is important for paying for occasional professional services, such as babysitting and cleaning.

[Mr Gregory Campbell]

Does my hon. Friend agree that the other statistic we should bear in mind is that the number of contactless payments is going up exponentially every single month? The greater likelihood is that there will be many millions more of that type of payment, leading to greater numbers of breakdowns of contactless payments, which will leave people without cash or the ability to pay otherwise?

[Jim Shannon]

My hon. Friend illustrates clearly where the focus is moving as more people use contactless payment methods. Cash is still a widely used payment method. It is relied upon not just by consumers, but by those receiving payments, with 52% saying it is an important way of being paid. It is imperative that rural communities have access to these services, which I believe we must secure. That is why I support Which? magazine’s suggestion to deal with the ATM concern, which has been taken up by the magazine and other consumer bodies. It responded to the LINK review by pointing out that ATMs are only one part of the cash nexus that needs to be protected. It believes that without a wider strategy for cash, the closure of bank branches, post offices—the hon. Member for Makerfield (Yvonne Fovargue) referred to that—and ATMs could mean that the UK reaches a point where maintaining the current system of free-to-access cash is no longer viable. We have to look at the end result of what we are heading towards.

There are also potential risks to all UK consumers and businesses if we no longer have a sustainable cash network. Recent IT failures have underlined for many people who do all their transactions by card and are almost in a cash-free environment that, whenever their card or bank fails, they are in big trouble. For example, IT failures at RBS highlighted that the distribution of cash can be critical to national infrastructure and is often the only viable alternative if a consumer or business cannot make an electronic payment.

That is why Which? has called on the Government to take urgent action to protect cash by placing a duty on the Payment Systems Regulator to protect access to cash and to ensure the sustainability of the UK’s cash infrastructure. Will the Minister address that and assure the House, Members here and people watching from elsewhere that that will be the case? It would support consumer choice, prevent financial exclusion, ensure that there remains access to a secure, non-digital form of payment and promote effective competition across all payments.

With all that in mind, I put that suggestion to the Minister for his consideration. I look forward to hearing from him and the Government on how we can ensure that services are available UK-wide, particularly in rural areas. I again thank the hon. Member for Rutherglen and Hamilton West for securing the debate.