Everyone must have access to free cash, Rishi Sunak warned by MPs

Rishi Sunak - James Manning/PA
Rishi Sunak - James Manning/PA

Rishi Sunak was told by Tory MPs on Wednesday night that he must take tougher action to ensure everyone has free access to cash.

The Prime Minister was urged to step in after it emerged that a quarter of free ATMs have been scrapped in the last four years.

Senior backbenchers warned during a debate in the Commons that millions of vulnerable Britons still use paper money for daily essentials.

Labour said ministers have a “duty” to protect those reliant on cash and it would pass laws setting out a minimum level of service for banks.

But Kit Malthouse, a former education secretary, warned that the Government “can’t sit there like King Canute” and try to hold back progress while consumers are voting with their feet.

He said it was “a bit of a myth” that the elderly struggle with contactless technology, adding the proportion of payments made in cash fell from half to just 17 per cent between 2010 and 2020.

Andrew Griffith, the Economic Secretary to the Treasury, said the Government was “putting the industry on notice” over its performance.

He told MPs that if banks don’t improve coverage by themselves, ministers will have powers to force them to provide more free ATMs.

“I am acutely aware of the very real concern around this topic,” he said during a debate on the Financial Services and Markets Bill.

“It’s not acceptable when people have no option but to travel large distances or to pay ATM fees to access their own money.

“I’m being very clear that it is our expectation that the industry will deliver on this important issue for our constituents.

“And if not this bill gives any future government the ability to mandate that.”

Mr Griffith said the Government was legislating to protect access to cash “for the first time in the over 1000 year history of the royal mint”.

The bill will require the Treasury to “publish a statement of policy” about the state of access to cash and the level of service it expects.

That document is expected to include a minimum distance people have to travel to be able to withdraw and deposit money for free.

If banks failed to improve their coverage, ministers could instruct the Financial Conduct Authority, the City watchdog, to enforce that limit.

But many Tory MPs want ministers to go further now, with 21 backing an amendment by Labour MP Siobhain McDonagh calling for new legislation.

They included Sir Iain Duncan Smith, a former party leader, Priti Patel, a former home secretary, and Douglas Ross, the leader of the Scottish Conservatives.

UK can't simply 'move in unstructured way' to cashless society

Andrea Leadsom, a former Commons leader, sought reassurances “the Government is entirely behind free access to cash and will make that clear in the guidance”.

David Mundell, an ex Scottish secretary, said the UK “cannot just simply move in an unstructured way to a cashless society”.

“As we move forward we have to move forward at the pace of the slowest in our society,” he told the Commons.

He asked for a commitment that “if it becomes clear people do not have free access to cash across the UK, the Government will proactively intervene to make sure that they do".

Anthony Browne, the MP for South Cambridgeshire, raised concerns that increasing numbers of shops now only accept card payments.

“There’s no point in people having access to free cash if they can’t spend it on essential items,” he said.

“Outlets that sell essential items like food and chemists, you might think that at some point they will be required to accept cash because if they don’t lots of people will be excluded.”

ATMs charging for withdrawals 'really are in the money'

Five Conservative MPs voted for the Labour amendment, which was defeated by 271 votes to 206.

Ms McDonagh said that providers of ATMs that charge for withdrawals “really are in the money” as banks remove free services.

"How can that possibly be right at any time nevermind in the heart of a cost of living crisis where the reliance on cash has soared?” she asked.

Tulip Siddiq, a shadow Treasury minister, said Labour “fully supports” calls for legislation to force the banks to act.

“Even if there has been a decline of people using cash, there’s still a small group of vulnerable people who risk being excluded if we don’t save free access to cash and face to face banking services,” she said.

“I think we have a duty to our vulnerable constituents disabled constituents and also constituents from BME backgrounds who do still rely on cash.”

Rocio Concha, Which? Director of Policy and Advocacy, said: "The Government has until now shown leadership in ensuring consumers can still access their cash, but their measures risk being undermined if consumers have to pay to get their own money.

“The Government must urgently reconsider its stance on this cross-party proposal so the most vulnerable in society can still access their own hard-earned cash for free."