Access to Cash

Sara Britcliffe Excerpts

Wednesday 20th October 2021 Westminster Hall

[Alex Davies-Jones]

I completely agree. In my constituency we have Dragonsavers, a vital service for local community groups, and the Welsh Labour Government are looking to set up Banc Cambria, so that we have banks on our high streets. They are looking at where it would be feasible to open branches.

While it is rare for me to have reason to doubly praise the Government, I am pleased to see that the plans outlined by the Treasury earlier this year suggest that people should not have to travel beyond a reasonable distance of around 1 km to withdraw or deposit cash. Such commitments are vital to the survival of cash circulation in this country, but as has been mentioned, only if the local geography of our towns and cities across the UK are taken into account when considering that 1 km radius.

For hon. Members not familiar with the south Wales valleys, my hon. Friend the Member for Ogmore (Chris Elmore) and I can assure them that our hills and beautiful valleys are not for the faint-hearted. These geographical barriers cannot be ignored when factoring in access to cash for community members, both now and in future. I therefore hope to hear from the Minister exactly how the Treasury plans to safeguard those vital services, particularly for those living in rural and semi-rural constituencies such as mine.

There is some hope, though. As hon. Members will be aware, LINK is a not-for-profit with a strong public interest remit that runs the UK’s largest free-to-use cash machine network. Instead of owning and operating those machines, LINK’s job is to ensure that every community has free access to cash by paying commercial incentives to ATM operators to put free machines where they are needed.

Indeed, after representations from a number of residents, I was thrilled to see LINK secure a new ATM at the village store in Efail Isaf in my constituency. The ATM is now secured for a minimum of five years, and it will go a long way to helping those in our area. For two years, LINK has invited communities to request free-to-use ATMs such as this one, and in that time it has installed more than 70 of them in response to local demand, alongside a year-long trial that saw LINK working with partners to develop a new way of accessing cash, by allowing consumers to withdraw cash over the counter from participating retailers.

I am pleased to see innovative steps being taken to secure access to cash for all those who need it. What will be essential, however, is maintaining those fantastic services. I truly believe the Government must act on the recommendations recently produced by Cardtronics and the Federation of Small Businesses, which ask Her Majesty’s Treasury to mandate bank membership of LINK in order to protect its fantastic withdrawing and free-to-use ATM delivery schemes.

In addition to my very real concerns about the impact of a potentially cashless society on certain populations, this conversation must also address the many logistical challenges and concerns around the largely inevitable shift to a cashless world. We need a long-term solution, whereas I fear the Treasury is currently in denial about the fact that we seem to be heading at a record pace for an almost wholly cashless society.

[Sara Britcliffe (Hyndburn) (Con)]

Speaking of the work of Cardtronics, one of the recommendations to the Government on protecting cash is that we should protect cash acceptance in our businesses. Does the hon. Lady agree that that is something the Government needs to consider?

[Alex Davies-Jones]

I completely agree. For many businesses in my seat in Pontypridd—in the market, for example, we have some brilliant stores—it is not feasible to take cards. We are talking about an average transaction of £1 for Welsh cakes from our great Welsh cake shops, for example; it just is not feasible for a business to take card payments when they are charged for those. It would massively reduce their profits and make their business completely unviable.

Steps can now be put in place to ease the shift to a cashless society. We have seen neighbouring countries switch their entire currency; while I am very reluctant to turn this into a debate on the euro, in fear of somehow reigniting the Brexit debate, if other nations have managed such a transition, we should be able to follow suit. With that in mind, I hope the Government’s promised access to cash Bill will include some form of commitment to setting up a regulatory body to ensure a smooth transition. That regulator could work with different interest groups, infrastructure providers and charities such as Age UK to support those most impacted through this transition period.

Of course, this recommendation has been well researched, notably by Natalie Ceeney, who chaired the initial access to cash review. I hope to hear more from the Minister on the issue, along with a timeline on when we can expect the legislation to come forward to the House.

My final point concerns the worrying trend of bank closures that we are seeing up and down the country. While I fully recognise that the Treasury is unable to interfere in decisions made by private corporations to remove their presence from the high street, we must acknowledge the devastating impact that those closures have on the availability of, and people’s access to, cash.

In preparation for this debate, I spoke to a number of people living in my area who have sadly been impacted by decisions made by both Lloyds TSB and HSBC to withdraw three branches from my constituency. While not all banking services relate to the process of depositing or withdrawing cash, it is undeniably those basic services that are the most missed when a bank chooses to leave the high street. With the role of the post office ever changing, it has been quite a confusing time for many residents in my area, who have felt forced to shift their ordinary banking practices as a consequence of these closures. With this in mind, I am particularly interested to know what plans the Government have to improve the availability of deposit-taking facilities across the county; I hope the Minister will refer to this in his remarks.

Ultimately, we need to see this promised access to cash Bill sooner rather than later; the big changes are happening in our communities right now. People across the country are already being negatively impacted, and I fear many more will be excluded unless action is rapidly taken. The Government have made a start, and I commend them on their commitment to preserving access to cash, but they need to follow through with specific action to protect those constituents of ours who fall into potentially vulnerable categories. I look forward to hearing from the Minster, and hearing what hon. Members have to say on this important issue. Diolch.

--- Later in debate ---

[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.