Access to Cash

Paul Maynard Excerpts

Wednesday 20th October 2021 Westminster Hall

[Sara Britcliffe (Hyndburn) (Con)]

It is a pleasure to serve under your chairmanship again, Mrs Miller, and I congratulate the hon. Member for Pontypridd (Alex Davies-Jones)—I hope I have said that correctly—who is also a friend.

Access to cash is a massive challenge for the next few years. Although our use of electronic payments via card or mobile phone has increased, and although almost all shops now accept non-cash payments—a move accelerated by the pandemic—there is still a large minority of people, particularly older people, who cannot access electronic payments. According to the Library, in the constituency of Hyndburn, we have gone from having 15 local units in 2015 to just five in 2021. To get more information about the scale of this problem in Hyndburn and Haslingden, I put out a physical banking survey in the town of Haslingden, which recently lost a bank branch, and an online survey in the town of Hyndburn. We have also recently lost our Barclays branch in Accrington.

The results were informative. First, I had a 20% response rate, which many Members will know is a huge return on any survey. This confirmed that this was a real issue that people felt very strongly about. Secondly, and perhaps unsurprisingly, there was an age difference; 80% of respondents who did not have easy access to an ATM were of the older generation—aged 56 or above. In general, the older the respondent, the more they found access to cash was limited. Similarly, 46% of respondents to my survey did not use online banking, and more than three quarters of that group were aged 66 and over. Most interestingly given the context of the debate, an overwhelmingly large proportion of respondents said the biggest improvement to banking services that they would like to see in the area was not only access to cash, but access to ATMs that did not charge. This is an important point to remember.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Is my hon. Friend aware of the research by NatWest showing that many people who use paid-for ATMs are go further to use them than they would if they used free-to-use ATMs? Does she agree that more research is needed as to why people are heading for paid-for ATMs when they do not need to?

[Sara Britcliffe]

I agree with my hon. Friend, who knows about this issue across Lancashire and in constituencies such as mine; I was not aware of the research conducted but agree that more is needed. It is not enough to simply map where the nearest ATM is; we need to ensure that everyone has access to free-to-use ATMs that do not disadvantage those who cannot afford to pay a fee.

If I may ask for the patience of my colleagues, I would like to drill down into the numbers and look at how people responded to the survey. I asked, “Do you have easy access to an ATM near your home?” About 60% of people said no, or “only somewhat.” When asked to explain, the majority of those who said “only somewhat” had access only to fee-charging ATMs. If I were to take this survey further and drill down into much tighter geographic areas, I would bet that the more rural an area, the less able to access cash people are. In some ways the conclusion is obvious: the fewer the people, the fewer the cash machines. If, over the ATM map, we layer a map of fee-charging cash machines, it becomes obvious that the more rural an area, the more likely that people will not only struggle to access cash, but will have to pay for it as well.

I also met with Cardtronics, and will briefly mention what it suggests. It states that the Government must protect ATMs:

“ATMs are the only sustainable national infrastructure that can maintain free access to cash 24/7 and must be protected through independent calculation of the interchange fee paid to ATM providers.”

It also says that the Government must protect key schemes:

“Membership of LINK and the Post Office banking framework should be made mandatory for banks to ensure these schemes are protected to ensure access to cash”.

It says that the Government must protect cash acceptance. There is a huge opportunity to work with local post offices, which would go a long way towards solving this problem and ensuring that all our constituents have easy access to cash.

--- Later in debate ---

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate the hon. Member for Pontypridd (Alex Davies-Jones) on securing a debate on what has probably been my favourite subject in my time in Parliament. As a member of the LINK Consumer Council, it is a subject that I am interested in. One hon. Member described at great length what LINK is, so I do not need to repeat that, thank goodness.

Hon. Members have described at some length how the use of cash is important to the most vulnerable in our society. I will quote one survey, which is from the organisation Which?, which found that two in five people reported being unable to pay with cash at a shop and did not have another payment method. Two in 10 people in that situation could not buy the medicine that they needed. That should surely show us why it is important to protect access to cash as a source of spending power and to insist on the acceptance of cash by shops, as the hon. Member for Makerfield (Yvonne Fovargue) said.

Back in December 2020, my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) and I were at a slightly less well-attended debate to talk about this issue. We urged Ministers and the industry to move rapidly towards addressing it. Rarely, I am going to praise a Minister—shock, horror—and say they have moved at some pace, both the industry and Government, by conducting the consultation we have heard about.

Industry bodies such as UK Finance, as well as Natalie Ceeney, who has been mentioned by the hon. Member for Pontypridd, and the banks themselves have worked hard, looking at what will best address the challenges that we face. The main project they have identified is called a shared banking hub. There is one in Cambuslang in Scotland and one not far from Southend, if it is worth observing, in Rochford. Both of those have worked extremely well. Banks have come together, shared premises and the consumers have loved it. It has moved the debate on from closing bank branches to how to provide more access to financial services.

We are now reaching the crunch moment. You may not be aware of it, Mrs Miller, but right now in the darkened corridors of the City of London, banks are discussing how to make access to cash happen, and they are going to resolve all these issues by early December. I say to the banks, they have to put up or shut up. They have to roll up their sleeves, dot the i’s and cross the t’s, overcome the commercial nerves and stop jockeying for commercial positions. They should not get lost in an alphabet soup of ACAG, JACSG and WDSG, and should stop the arbitrary waffling, focus on shared branches—what level, how many and how they are going to pay for it.

The investment that shared branches would require would be a tiny fraction of their turnover. They have no excuse. They have been discussing this for more than two years. If they do not resolve these issues, the likes of me will be baying for their blood. I will demand financial penalties commensurate with the investment that is forgone. We need to change now. I have seen in my constituency that they know the legislation is coming. They are shutting branches as we speak. There should be a compulsory moratorium on all bank branch closures from 1 January 2022 until the point at which that legislation takes effect. The banks have no further excuses. We have been on this issue for long enough. The time has come. We have solutions out there; we know what will work; we know the legislation is coming; we know that the FCA is the best vehicle to oversee it. Get on with it.