Access to Cash

Patricia Gibson Excerpts

Wednesday 20th October 2021 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I begin by thanking the hon. Member for Pontypridd (Alex Davies-Jones) for bringing this debate forward. I share her sincere and passionately held views on the issue; I and many other Members have participated in access to cash debates on umpteen occasions. Despite the huge consensus on what we need to do and what the problems are, I do not see much change, but we all agree that we need direct Government intervention to halt the decline of cash and to protect access to cash for our communities. I echo the words of the hon. Member for Blackpool North and Cleveleys (Paul Maynard): we need to just “get on with it”.

The access to cash Bill will be an important piece of legislation, but we need to see it. Covid has placed our cash infrastructure in an even more precarious situation. We need clear protections for the future of cash payments which, as we have heard, are so important to so many people, including those who simply do not have the option to pay by card and those who simply want to pay by cash for budgeting or other reasons. As my hon. Friend the Member for Inverclyde (Ronnie Cowan) reminded us, more than 5 million people still rely on cash, and that must not be forgotten. Cash transactions are very important for many people, and will remain so for considerable time to come. We have heard as much from every single Member who has spoken today.

Alongside that is the loss of free-to-use ATM cash withdrawals. We know that withdrawals from cash machines dropped significantly at the height of the covid pandemic. My fear, which I know is shared by Members around the Chamber, is that that will feed further closures of free cash machines across our communities. Increasingly, ATMs are charging for access to cash, and I am afraid that the situation is becoming normalised.

[Margaret Ferrier]

Will my hon. Friend give way?

[Patricia Gibson]

I just want to make this point. To help address the situation, we need to make sure that banks pay their fair share so that their customers can get free access to cash. By cutting the interchange fee, banks have saved £120 million, but the financial brunt is being borne by those who live in less affluent communities. That is a disgrace. The more affluent the area in which someone lives, the less likely that they will be required to access their own cash through an ATM. That is unjustifiable by whatever measure we care to use. It is another example of banks expecting others to pay for the so-called service that they want to provide. They do not properly renumerate post offices for taking over basic banking, which they have abandoned in so many of our communities, nor do they properly renumerate the ATM providers.

A pattern is emerging and the banks need to explain themselves. It seems to me that they are simply not fulfilling any social obligation or any duty of care either to those to whom they expect to provide a service or to those that provide that service on their behalf. If the access to cash Bill is to make any real difference, it must hold them to account for their responsibilities.

Of course, it is welcome that the Financial Conduct Authority is to oversee access to cash and provide analysis of what needs to be done where in order to support it. The issue has become more critical because banks have left gaps in our provision. As a result, our sub-postmasters need more financial support. Banks need to stop taking them for granted, given the essential role that they play in our communities, doing the job that banks are no longer interested in doing. It is worth remembering that throughout the pandemic, post offices continued to serve our communities and we relied on them then, as we do now. Many banks closed their doors during the pandemic. So much is expected of our post offices, but sub-postmasters are leaving the service because they are under so much financial pressure. Many are simply shutting up shop, as it is much more challenging to make a living now.

Sadly, post offices have been systematically run down over the years by successive Governments. I remember the 2000s, when the previous Labour Government stripped post offices of many of their functions. Then, in 2008 it was announced that 2,500 small and rural post offices would have to close, with Scotland disproportionately hit with 600 closures, six of which were in my constituency of North Ayrshire and Arran. Since then there have been so many bank closures that seven towns in my constituency—Kilbirnie, Kilwinning, West Kilbride, Stevenston, Ardrossan, Dalry and Beith—have no bank at all.

Now we have an access to cash crisis, with sub-postmasters expected to do so much of the heavy lifting without being properly paid to do so. The threats to our cash infrastructure, with the banks abandoning our towns, with sub-postmasters under intolerable financial pressure, with free access to cash being increasingly difficult to find and with many being increasingly locked out of paying by cash, mean that urgent action is needed if we are to protect our financial infrastructure and ensure that we have a society where financial inclusion matters.

The situation is critical, and the contents of the access to cash Bill will be the crossroads where the Government have a real opportunity to step in to do something to stop the decline. I think we can all agree on what needs to be done, but we need to start with the banks and their responsibility to communities and consumers. I look forward to the Minister’s telling us more today about the meaningful actions he expects the access to cash Bill to provide and when we can get sight of it. The future of our financial infrastructure depends on that Bill, so its content will determine the future of cash.