A ban on charges for using cash machines should be at the heart of Chancellor Philip Hammond’s forthcoming Budget, according to Labour.
The party believes the move would provide a welcome boost for Scotland’s ailing high streets. One free ATM machine a day has closed in Scotland since operator Link announced a 20 per cent cut in funding for the network in January. Around 250 have been axed every month across the UK.
Labour has promised new laws to give power to the Payment Systems Regulator to ban charges to consumers when withdrawing cash, ensuring that all cash machines are free at the point of use.
Ged Killen, Scottish Labour MP for Rutherglen and Hamilton West, said: “Philip Hammond should throw the high streets a lifeline and scrap ATM charges in the Budget.
“By banning ATM charges and introducing stricter rules around access to banking we can focus on how we best provide these services where they are needed and for free. No one should have to pay to access their own money.
“When ATMs and bank branches disappear, lending to small businesses decreases, footfall on the high street goes and the risk of financial exclusion grows.
“If we are serious about financial inclusion and economic development outside metropolitan areas, we should seek to protect the services people rely on.”
Mr Killen has a private member’s Bill at Westminster which would bring about an end to ATM charges.
The UK Government says the new Payment Systems Regulator must maintain the current geographical spread of ATMs. Any changes made to fees must be “incremental” to allow the impact to be monitored. And there should also be a greater focus on Link’s “financial inclusion” programme, to continue to fill gaps in the network.
A Treasury spokeswoman said: “We recognise that widespread free access to cash is important to consumers and businesses.
“That’s why we established the Payment Systems Regulator, which requires Link to ensure the UK’s payment system works in favour of users.”
Surveys by the Federation of Small Businesses have shown that 59 per cent of retail businesses felt a cash machine was important to the running of their business. However, 50 per cent of businesses say their nearest free to access cash point is already more than half a mile away, with closures making this worse.
Rural areas of Scotland are among the worst affected by the closures.
One in five (19 per cent) people in rural Scotland told Which? their nearest free-to-use cash machine was too far to walk to, making Scots less likely to shop locally.
Which? also found that one in 12 (8 per cent) had used a fee-charging cash machine in the last month and, of these, a third (31 per cent) had done so because they couldn’t find a free option.