Financial Services and Markets Bill

Paul Maynard Excerpts

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

My right hon. Friend is absolutely right. He will know that the question of access in urban areas is very different from that in rural areas. I can give him the assurance that he seeks.

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

I, too, welcome all the provisions, but will the Minister confirm that when he says “access to cash” what he actually means is free access to cash, not paid-for ATMs.

--- Later in debate ---

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

Thank you very much, Madam Deputy Speaker. What a lucky boy I am to have another minute to spend—gosh! I refer the House to my entry in the Register of Members’ Financial Interests as a member of the consumer council for LINK, which not only manages the nation’s ATM network but is the overarching body that can get new banking hubs in place. It is important for people to bear that in mind in listening to my comments. I would have paid tribute to my hon. Friend the Member for Salisbury (John Glen) if he were still here. Unfortunately, he is not, but he was always patient as I chased him around Westminster trying to ask about yet further nuance on access to cash.

One thing that we have learned today from listening to hon. Members is that access to cash is the wrong way to talk about the issue. It is about not just cash but access to face-to-face banking. Those who are reliant on cash, whether they are elderly or in financial need, must be able to speak to someone about their financial situation and not just interrogate a computer. We have heard from hon. Members about how reliant so many are on cash as a budgeting tool—increasingly so, given the cost of living crisis—with a jam jar approach to managing bills.

The Bill’s provisions on access to cash need to be about more than ATMs and ensuring that we can spew out cash to consumers; people need somewhere to spend it. The underlying problem is the economics of our cash system—the hidden wiring—and no one has mentioned the provisions in the Bill about the wholesale distribution of cash. If it costs too much for a retailer to use cash, why would they keep on accepting it? They need to be able to deposit it in an ATM just as much as a customer needs to be able to withdraw it to spend it in the first place. Far better still would be more local cash recycling, which would avoid the need for nationwide banknote distribution, if only for environmental reasons.

We must be careful not to accept the rather irresponsible narrative that, somehow, we are on the precipice of all ATMs disappearing. Some 94% of cash withdrawals are still from free-to-use ATMs, and LINK subsidises any ATM that was here in 2018 and no longer has an alternative within 1 km. Should that ATM disappear, LINK will fund a replacement. There is a strong backstop to ensure the presence of ATMs in our communities.

As I said, the debate has moved far beyond ATMs, and towards face-to-face banking, largely thanks to the Herculean efforts of Natalie Ceeney, who wrote the original access to cash review back in 2019. She has banged chief executives’ heads together across the banking sector to ensure that they move forward on banking hubs, which, as we have heard, are making such a difference in Belper and Barton-upon-Humber as well as more and more places across the country. LINK is doing a fantastic job, looking at already announced and planned bank closures to identify where access to cash and face-to-face banking is already being reduced. Where those gaps are appearing, it is working with the overarching company that has been set up to fill those gaps. It assesses each closure and recommends better cash services for places without any branch services left to be delivered by a dedicated operating company.

Some have expressed concerns about the slow roll-out of banking hubs. We have had two pilots that have proved that they are workable measures. However, things such as asbestos removal and finding the right location in a community need to be factored in by a sector that has not previously had to act as a property developer. Some delay is therefore perhaps understandable, and I would rather that we got it right in each community than rushed to buy any old place and hoped for the best.

The creation of an overarching duty for the Financial Conduct Authority is very much the icing on the cake for the work that has gone on so far. It should be seen as a reason to take satisfaction. I think that those criticising the Bill for not going far enough do not fully understand what has already occurred. They need to recognise a win when they see one and then raise it. However, I do seek some clarifications from the Minister. I have sought one already, and he has been uncharacteristically reticent at the Dispatch Box in telling me what I want to hear, and he is normally very good at telling me exactly what I want to hear. Now, he knows where I lurk most mornings, and I will be there tomorrow if he wishes to approach me over my coffee and whisper sweet nothings into my ear about having heard my plea.

There is no point in offering us access to cash if that access costs £2.75 at cash machines in the poorest part of my constituency. That diminishes access to cash, because people will find it even harder to access cash should that cash machine mean that a free-to-use ATM has disappeared. All of this is meaningless unless the word “free” is introduced into the debate.

Secondly, the Government are putting out their access to cash statement. Can the Minister reassure me that it will not just be some crude measure of geographical accessibility—two miles here, one kilometre there or whatever? That would not reflect the need in the likes of Mitcham and Morden, which is a very urban constituency rather like mine. My right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) spoke earlier. He has a vast rural area where one kilometre, frankly, will not mean much on the hills and the moorlands.

[Alison Thewliss]

The hon. Gentleman is making an excellent point on the proximity of cash machines and arbitrary limits. The city centre of Glasgow is right at the heart of my constituency. Putting a couple of kilometres around that would basically knock out every other cash machine that was not on Buchanan Street, so I agree with his point. Does he agree with me that the Government have to think more carefully about such limits?

[Paul Maynard]

I very much welcome that. The challenge for the Government is that the access to cash statement must reflect what good access looks like—not just to a cashpoint, but to wider in-person banking services. It cannot just be “Can I get a bank note out of a machine?” It has become increasingly common in my own local area for cash machines not to have been filled up. There is not much point in having a cash machine without any bank notes in it, as if it were a rather decorative antique object.

One important feature that does not require legislation, but which deserves a great deal of comment—more than the two minutes I now have—is the right for communities to review any decision taken on whether they should have a banking hub. Not only is LINK assessing any closure of a bank branch already announced, but the right for a community to request a review of cash access. I am sure every single Member worth their salt in this place will be sitting down looking at the map of their constituency and saying, “I need a review there, there, there and there.” I am sure LINK will not thank me for doubling or quadrupling its workload in that regard, but it is a fantastic opportunity and a mark of how far this debate has moved. In my view, the legislation should specify a simple, fair and independent process that allows communities to appeal decisions. That could easily be placed in the legislation as an additional duty for the FCA. It will help the communities, the banks and LINK by ensuring a fair, independent and transparent method for communities who are not satisfied to have issues quickly considered under the oversight of the FCA. There is a great deal of suspicion out there about the banks and their approach to their branch networks. I do not want communities to appeal or to ask LINK to have a look and then be very disappointed about why they do not get the banking hub they might think they are entitled to. The process must be clear and transparent for communities to have confidence in it.

In summary, the Government proposals ensure that the FCA has the powers it needs to tackle the issue of access to financial services. After many years—my hon. Friend the Member for Salisbury is back now. He missed me saying well done to him. Don’t duck out for your starring moment! I don’t know. [Laughter.] This issue has taken far too many years to solve. It has not his fault either; it has been very complex. Too many communities have lost the banks they already had. Too many have been reduced to a single bank or to no bank at all. We now have a robust process in place to identify the locations, to find an alternative, to find a solution, without people having to drive miles away. For that reason alone, the Bill is to be welcomed. But it can be improved with one single four-letter word: free. Please, Minister, free me from my anticipation and make cash free to access.