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Language: English / Gàidhlig


Chamber and committees

Meeting date: Wednesday, May 2, 2018

Meeting of the Parliament 02 May 2018

Agenda: Automated Teller Machines, Portfolio Question Time, National Health Service (Financial Accountability), Business Motion, Parliamentary Bureau Motions, Decision Time, Nuclear Weapon Transport (Civil Contingency)


Automated Teller Machines

The Deputy Presiding Officer (Christine Grahame)

Good afternoon. The first item of business is a members’ business debate on motion S5M-10648, in the name of Dean Lockhart, on the campaign to save automated teller machines. The debate will be concluded without any question being put.

Motion debated,

That the Parliament notes the campaign by Which? and the Federation of Small Businesses to call a halt to the potential closure of free-to-use ATMs across Scotland because of plans to reduce the interchange fee by the cashpoint network, LINK; recognises that ATMs are an important service in communities, particularly for people on low incomes, older people and in areas such as the Trossachs, Perthshire, Kinross and Fife; believes that this might exacerbate the problem of bank branch closures as some consumers might be left without access to even the most basic banking services; notes the calls for the Payment Systems Regulator to take action to prevent there being complete ATM absence in some areas, and acknowledges the view that assurances should be given that consumers and small businesses can maintain access to the network of free-to-use ATMs.


Dean Lockhart (Mid Scotland and Fife) (Con)

I am pleased to bring to the chamber this members’ business debate on the potential closure of free-to-use ATMs across Scotland. I thank the members who supported the motion, thereby allowing us to debate an issue that has the potential to affect all our constituencies and regions. I also recognise the excellent joint campaign by Which? and the Federation of Small Businesses, which has attracted more than 75,000 signatures across the UK to highlight the concern.

As members will be aware, automated teller machines have a long history in Scotland, with the first ATM being introduced in the late 1960s. In fact, the concept of the ATM was pioneered by two Scotsmen—James Goodfellow from Paisley and John Shepherd-Barron from Inverness. The latter originally imagined that a cash machine could operate just like a chocolate dispenser. ATMs have clearly come a long way since then. There are now 5,200 free-to-use ATMs across Scotland, which offer a wide range of banking services and form an invaluable part of communities and local economies.

Despite the increasing use of digital transactions, cash is still the most common method of payment in the high street. More than a third of total high street spending is dependent on the ready availability of cash machines. FSB research highlights that local ATMs inject an average of £16 per withdrawal directly into nearby stores, and research by Which? has shown that 90 per cent of Scottish consumers consider the availability of free cash machines to be an important part of their everyday lives. The importance of local free-to-use ATMs has only increased following the recent closure of a number of bank branches, as ATMs are often now the only means for people across Scotland to access cash and banking services.

Given the importance of ATMs for local communities, serious concerns were raised when, in January this year, the UK’s largest cashpoint network, Link, announced plans to change the fee structure under which ATM operators are paid for the use of its ATMs. The proposed changes that Link has announced would reduce the fee paid to ATM operators by 20 per cent over the next four years.

The critical issue is that the fee reduction has the potential to close many hundreds of ATMs across Scotland, as they would become financially unviable. The Federation of Small Businesses has estimated that around one in 10 ATMs in Scotland—more than 500 ATMs—are at risk. If the proposals go ahead, the hardest hit will be those who are the most reliant on using cash, including those in rural communities, where branch closures have already limited access to cash and banking services. They face a double whammy if ATM services are also withdrawn. The FSB has estimated that rural areas will potentially be the hardest hit by the proposals, with one in five, or 20 per cent, of ATMs in rural areas being at risk.

The proposals would also have an adverse impact on vulnerable and deprived communities, where free-to-use ATM coverage is already limited. Age Scotland has expressed concern that poor mobility and the lack of public transport will make it difficult for older people to access more distant ATMs. For small retailers, the closure of local ATMs would damage their business. Small retailers are cash businesses. According to the Scottish Grocers Federation, 76 per cent of all its members’ transactions are cash based. Research shows that, without a nearby ATM, more than 20 per cent of consumers would be less likely to use local shops and one in seven consumers would find it more difficult to pay for goods in cash.

Evidence that was given last week as part of the Economy, Jobs and Fair Work Committee’s inquiry into bank branch closures highlighted that many small retailers rely on the cash deposit facilities of ATM machines and that many face insurance requirements to deposit cash at the end of every day or every second day. Without a local ATM facility, those retailers might have to travel for up to two to three hours to get to their nearest cash deposit facility. That has clear implications for managing cash flow, staffing and productivity.

The Link network has responded to the widespread concerns by giving assurances that vulnerable consumers and remote ATMs will be protected by various measures, such as its financial inclusion programme, which provides funding of up to £3 million for the retention of ATMs in areas that are underserved. However, it is uncertain how that will work in practice and how the £3 million of additional funding will offset the impact of the reduction in the interchange fee, which will result in £200 million being taken out of the system. The FSB has estimated that the financial inclusion programme would apply to only 220 ATMs in Scotland, which is less than 5 per cent of the network.

It is important that we acknowledge the changing nature of banking and the increasing use of online banking and cashless transactions. It is equally important that we acknowledge the pressures that banks face, with interest rates lower for longer, increasing regulatory compliance and increasing costs of doing business. However, cost-reduction exercises that would result in the closure of hundreds of ATMs around Scotland cannot and should not be the answer to those pressures. Therefore, I have written to the chairman of the Link Scheme Ltd to call for the proposed changes to be reconsidered, and for the Link network and member banks to take another look at the impact of the proposals on consumers, small businesses and communities. If the objective of the Link network is to achieve a better geographic and demographic balance of ATMs, there are better ways to achieve that.

I have also written to the Payment Systems Regulator, which is the relevant regulator in this area, to ask that it closely monitors all proposed changes to the Link, MasterCard and Visa payment systems to ensure that any future changes to those systems prioritise consumers’ access to free-to-use ATMs.

It is vital that the ATM network is not seen as just another banking service from which to make money but, instead, is viewed as a core service offered by the banking industry as part of its wider commitment to local stakeholders.

The Deputy Presiding Officer

As we must conclude by 2 pm to let the next business proceed, I must be very strict and members must keep exactly to their time. There will be no ifs, no buts and no extra seconds—I cannot make it clearer. Gail Ross will show the way.


Gail Ross (Caithness, Sutherland and Ross) (SNP)

I thank Which? and the FSB for their campaign on the issue and Dean Lockhart for securing today’s debate. Which? and the FSB have worked tirelessly to bring to our attention the threat of ATM closures, and I am glad that we are debating the issue today.

As Dean Lockhart highlighted, Which? and the FSB have had to raise the issue because, in January 2018, the UK’s largest cashpoint network, Link, announced plans to reduce the amount paid by card issuers to ATM operators for every use by a customer of a free ATM. The plans will reduce the amount that is received by ATM operators by 20 per cent per transaction from July this year, which is a move that is likely to make thousands of ATMs around the UK financially unviable.

In rural constituencies such as mine, the removal of ATMs, as well as adding to the great difficulties that have already been created by bank closures, will have a considerable effect on tourism, making visitors less able to contribute to local economies. As a rural MSP and deputy convener of the Rural Economy and Connectivity Committee, I have fought against bank closures, and I am fighting for better provision of mobile banking. I will continue to challenge those decisions but, until the banks see sense, the role of ATMs is vital to the cash-based economy of rural Scotland.

Tourism is a key sector in my constituency, and the creation of the north coast 500 has helped to harness its potential. Having ATMs along the NC500 route is key to ensuring that tourists can access money when they wish and spend it freely in local businesses. Not all small rural businesses take cards, and many have card limits. Cashpoints ensure that tourists can spend despite that.

However, ATMs do not assist only where businesses do not take cards; they also increase the likelihood that customers will spend money. FSB research shows that, on average, local ATMs inject £16 per withdrawal directly into nearby shops. Keeping ATMs in towns and villages is an important way of continuing investment by tourists.

Rather than removing ATMs, companies should be increasing their numbers and ensuring that they are accessible. Of the 60 or so ATMs in my constituency, nearly half are inside shops and banks, which means that they do not have 24-hour access. The welcome increase in tourism that has been created by the NC500 makes it increasingly likely that existing ATMs will run out of cash. Just last month, the North Star newspaper reported:

“cash machines run dry in Tain”.

As the closure of banks leads to increased demand on ATMs, they will run out of cash more regularly unless their numbers are increased.

Link and its members should realise that the disappointing bank closures across rural areas mean that there is no better time to invest in ATMs. In my constituency, many local business owners would like to see an increase in the number of cash-and-deposit ATMs, which allow customers to deposit money as well as take it out. The provision of more such ATMs would allow rural businesses to bank quickly and easily and would prevent the safety and security issues that come with holding large sums of money on business premises or in homes.

ATMs will continue to have a role in rural areas, because of their importance to tourism and the cash-based economy. It is therefore vital that we ensure continued access to cash, and that we join Which? and the FSB in urging Link and its members to review the decision in light of its implications.


Jamie Halcro Johnston (Highlands and Islands) (Con)

I congratulate my colleague Dean Lockhart on securing today’s debate on an important issue. It comes at a time when the Economy, Jobs and Fair Work Committee, of which I am a member, is investigating bank branch closures—an issue that has current relevance across the UK. The House of Commons Scottish Affairs Committee is also taking evidence on access to ATMs specifically.

Therefore, I welcome this political attention on a matter that is clearly of considerable interest to people across the country, but which is more keenly felt in the rural and remote parts of my region of the Highlands and Islands, as Gail Ross said.

In recent decades, people have become increasingly used to readily accessible cash. As Dean Lockhart mentioned, Scotland can claim to be the home of the modern ATM. Its original inventor, John Shepherd-Barron, brought forward the concept that created the first Barclays machine. His invention was built upon by a Paisley man, James Goodfellow, who developed the machine-readable card accompanied by a personal identification number, thus reducing the need for slightly radioactive imprinting of the cheque-like documents that were paid in. The Enfield branch of Barclays, which still operates today, bears a blue plaque that notes its place in history. Captioned “lives made much easier”, it is a testament to the role that ATMs have played in our modern history.

The advances in contactless and chip-and-pin technology have doubtless had an effect on the use of ATMs. However, for many, cash remains the default method of purchase. The FSB has spoken about the higher level of cash transactions for small businesses. At a recent Economy, Jobs and Fair Work Committee meeting, small convenience store owners told us that when customers take money out of the ATM in their stores, some of that money is then spent in the store, and the storekeeper then puts much of the cash back into the ATM. That shows the importance of the ATM in supporting those businesses and the cyclical nature of the cash economy on which they rely. Cash withdrawals can also be used as a form of budgeting, with people taking out a weekly amount and being able to closely monitor their spending in certain areas.

Some of the proposals from the Payment Systems Regulator have been sensible attempts to agree to a reasonable way forward with Link, but this area will inevitably have to be monitored closely in the coming years. Therefore, although we may look to the future and the potential of an increasingly cashless society, cash is still an important part of many local economies. There remains a risk that some of the more vulnerable citizens and businesses will be left behind by a banking system that is increasingly difficult to access in the ways that they are used to.

Cashless transactions have grown at pace, without any great discussion of what the implications might be. People are often being forced to change business practices and their own banking practices with very little support or forewarning. The impact in specific areas and for specific groups of people should be considered.

Looking geographically, Which? has observed that Shetland has the highest level of charging cash machines in Scotland. Comfortably over half of its machines require a fee for withdrawals. However, that finding was based on a relatively small sample size, as Link has identified that there are a total of 31 ATMs in the northern isles taken together, of which 20 are free to use.

Those ATMs are important—they are crucial for the sustainability of rural shops, which rely so heavily on cash, and the shops themselves are important as part of their communities. They provide a hub and a place to meet, particularly for those who might otherwise face social isolation. Therefore, ATMs can be an integral part of the rural economy.

I do not think that anyone is seriously advocating getting rid of fee-paying ATMs in their entirety. Which? observed that they can offer additional convenience, but that should not be at the cost of losing out on existing provision. That is why ATMs and branches should be considered in the round. Access to money and banking services continues to be important, yet for many it can feel impossible to carry out relatively simple requirements. When online banking facilities fail—as they have done recently with the problems at TSB—customers can be left with few alternatives. There might be many elements at play—far too many to fit into a four-minute speech—but let us be very clear: if banks create barriers to customer service, customers will look for banking services elsewhere.

I will finish with a quote from James Goodfellow—

The Deputy Presiding Officer

You do not have time for Mr Goodfellow, I am afraid. I would love to hear from him, but no.


Joan McAlpine (South Scotland) (SNP)

I am pleased to speak on a subject of great importance to my constituents, and I congratulate Dean Lockhart on securing the debate. I also congratulate Which?, the FSB and Age Scotland on their campaigning on this important matter.

The decision by Link to reduce the interchange fee is all the more concerning as it comes against the backdrop of local branch closures. In my area, three market towns—Langholm, Lockerbie and Annan—which are all close together, are all threatened by Royal Bank of Scotland closures. That problem was added to recently by the proposed closure of a Santander branch. While fighting such closures, my constituents were assured that, at the very least, they would still be able to access cash from cash machines. Now, we are told that Scotland will be among the hardest hit by a drop in the number of free-to-use ATMs. That is bad news, particularly for those from rural communities, where one in five people already say that their nearest cash machine is far too far away to reach on foot.

As is the case with anything to do with the financial sector, it is quite hard to get to the bottom of who is responsible. However, Link’s membership is comprised of 37 banks, so the scandal, again, looks like it comes from the banks. Despite the reduced interchange fees, banks could make the decision to maintain free-to-use ATMs where they are attached to local branches, or where they are pre-existing. However, if the past few months are anything to go by, relying on the social responsibility of RBS and Santander seems somewhat optimistic.

The loss of a local branch is difficult enough for a community to deal with, but losing a cash machine makes a bad situation worse. Once large machines are removed from towns, smaller ones cannot cope with demand. People are forced to travel ridiculous distances for want of a few pounds, and the amount of cash that circulates in towns plummets, which harms local businesses. I recently discovered that applications have been made to Dumfries and Galloway Council’s planning department for the removal of an ATM in Annan. My understanding is that that closure is directly linked to the reckless decisions on bank closures that were made by RBS.

On a positive note, campaigners in Maybole secured an impressive victory last week when RBS made a dramatic U-turn and reversed its decision to axe the town’s ATM. Sustained pressure from local campaigners, MPs and MSPs has resulted in RBS offering a reprieve to the closure-threatened Gretna branch in my area and nine more branches across the country. Of course, all branches and ATMs across the region—and across Scotland—should be kept open, and not just granted a temporary reprieve. However, such examples show that keeping up the pressure has an impact, which is why debates such as this are important.

People are rightly incensed by the idea that the banks, which caused such carnage in 2008, are imposing more damage on communities. I hope that the banking sector will learn from the events of the past few months and recognise that there is a continued need for face-to-face provision as well as cash withdrawal and deposit machines.

Link must acknowledge its responsibility as the network to which almost every cash machine in the UK is connected. In its submission to the Economy, Jobs and Fair Work Committee’s inquiry into bank closures, Link stressed its commitment to providing consumers with access to their cash for free through the strengthening of its financial inclusion programme. However, the issue is too important to leave to Link’s voluntary corporate social responsibility. It is the role of the UK-wide Payment Systems Regulator and the Bank of England, which also regulates Link, to ensure that consumers are able to access cash effectively and efficiently. Perhaps it is time for the Bank of England to step in and force Link to revise its plans.


Monica Lennon (Central Scotland) (Lab)

I congratulate Dean Lockhart on securing the debate, and I thank Which? and the FSB for their campaigns.

I have been following this issue closely, as my MP, the member for Hamilton and Rutherglen West, Ged Killen, has also been leading a campaign on the issue. He plans to introduce a bill at Westminster this month to create a legal requirement for free ATMs in order to protect free access to people’s cash. I share Ged Killen’s concerns about Link’s decision to effectively cut funds for those who operate free ATMs.

As we have heard, before making its decision Link consulted only its own members, many of which are large banks that have a commercial interest, and did not consult the public more widely. However, the impact on the general public could be significant, because there could be whole high streets and communities in which no free-to-use ATMs will exist.

Less than six months ago, communities across Scotland were shaken when it was announced that more than 60 bank branches face closure, and several RBS branches in my region, Central Scotland, were affected, including the RBS branches in Larkhall and Hamilton’s Cadzow Street. Dean Lockhart referred to the research by Which?, which shows how heavily people rely on access to free ATMs.

We have no doubt that the most vulnerable people in our society will be hit the hardest—people without their own access to transport, including the elderly and people with disabilities. The cost of accessing cash from fee-charging ATMs will be felt most by those who can least afford it. Someone with £10 or £20 left in the bank will be placed in real danger of being overdrawn if they have to pay a couple of quid to withdraw their money, and they simply cannot afford that.

The Cadzow Street branch of RBS will close, as I said. In Hamilton, there is an ATM in Quarry Street, which currently charges £1.99. RBS will abandon Larkhall—I know that Dean Lockhart hails from there—where there is an ATM, in John Street, that charges £1.75. In Stonehouse’s Strathaven Road, the ATM charges £1.99. In East Kilbride, the ATM charges £1.85. We could all go on and on. However, we know that, in Lanarkshire, one in five children lives in poverty. It is therefore unacceptable for families who are already struggling to be charged to access their cash. We cannot allow these charges to become the norm.

Link tells us that it has strengthened its financial inclusion programme by subsidising ATM operators with cashline machines in low-income areas. However, the reality is that, in areas that are struggling to cope with poverty and deprivation, there is already an underprovision of ATMs. For example, Ged Killen counted more cashlines in one corridor of the House of Commons than there are in the whole of the main street in Cambuslang, in his constituency.

The banks and card issuers that make up much of Link’s membership might have commercial concerns about the projections of reduced cash usage, but Link is a not-for-profit company with a social remit. Those who value ATMs as a lifeline service must be properly considered.

On behalf of my constituents across Central Scotland, I add my voice to the calls of Ged Killen MP and organisations such as Which? and the FSB for the Payment Systems Regulator to engage in a full market review of the effects of the proposed changes. I welcome Ged Killen’s plans to launch a bill in Westminster to protect free access to cash, and I hope that the bill gets the cross-party support that it deserves.


Richard Lochhead (Moray) (SNP)

I, too, congratulate Dean Lockhart on securing this debate so that we can all make a contribution highlighting the issue’s importance to local communities and to wider rural Scotland in particular. I also pay tribute to Which? for its campaign, and thank the FSB, Age Concern and others who have sent us valuable briefings.

There is a sense that there is a new emerging banking crisis in Scotland. This time, it is about not sub-prime mortgages but banking facilities being withdrawn from Scotland’s rural communities. Although many commentators have for a long time predicted the cashless society, that is still several decades away. However, due to a combination of the inaction of the UK authorities and the policies of the banking sector, we are in danger of creating cashless communities in rural Scotland, which will have all sorts of detrimental social and economic impacts.

In the past two years in particular, those of us who represent rural constituencies have seen the closure of many high street branches in those areas. In my constituency of Moray, the whole of Speyside is in the ludicrous position of having no high street bank branches. They have all closed in the past couple of years. That is the part of Scotland whose whisky industry is one of the biggest revenue generators for the UK Treasury, because 50 per cent of Scotch whisky is produced in Speyside. It is also the home of Walkers Shortbread Ltd, a major company that operates in 80 markets around the world. It is a centre of angling tourism and other economic sectors. However, there is not one bank branch in the whole of Speyside for those sectors.

To replace the bank branches that have closed, mobile banks were introduced. However, I have just had to see off a fight with the Royal Bank of Scotland, which wanted to reduce the twice-weekly visits of its mobile bank to Dufftown in Speyside. I am thankful that it has reversed that decision and that the service will continue for the foreseeable future.

All that we have left are the holes in the wall, which contain autobank machines at the moment. Those ATMs are vital for the communities where they are, so the idea that they could be removed because of the change in the pricing is ludicrous. That must absolutely be stopped.

In fact, when the high street branches in Aberlour in Speyside closed, the banks also took away the autobank machines, so people now have to travel to the ATM in Rothes down the road, which sometimes runs out of cash because so many people are dependent on getting cash from it. When Aberlour’s ATMs closed, there was no consultation with the local community of elected representatives, as far as I am aware.

The issue is important for the rural economy for a number of reasons. First, many shops in rural communities take cash only. That is the case in Wester Ross, where I was for my holidays over Easter—it is a spectacular area. The shops do that because they have fragile profit margins and therefore cannot afford the cost of card transactions. If tourists and local people cannot access cash, such businesses will lose out big time.

Secondly, in Aberlour, and elsewhere in Speyside and rural Scotland, summer shows, summer fetes and Highland games will be coming up. At those events, charities, good causes and other organisations raise money. They depend upon visitors and tourists going to the local ATM, taking out some cash and spending it at the show. If those people run out of cash, they can go back to the ATM and top up because they are having such a good time. If that service is not free, they will be put off doing that in many cases. Therefore, the good causes, charities and businesses will lose out for that reason as well.

In rural Moray and many parts of Scotland, people do not have a good broadband or mobile phone signal—if they have any at all. Therefore, not to have those ATM facilities to carry out their banking and access cash is detrimental to quality of life, particularly for elderly people.

I ask the minister to do what he can to address the issue with Link. The UK Government should set up a task force to look into the rural banking crisis.


Maurice Corry (West Scotland) (Con)

I thank my colleague Dean Lockhart for bringing this important debate to the chamber.

Throughout my region, as is the case throughout Scotland, people face different challenges in different areas. For quite a few years, many services have been centralised. That has shown us the difficulties and challenges that people who do not live in central locations face.

People require certain facilities that can be accessed at any time. That is particularly pertinent in Arrochar and Tarbert in my region, which is a tourist area where there is no ATM. An emergency situation does not allow time for people to wait for the shop to open for them to withdraw cash and nor does the possibility of having to store more cash at home for such situations make us safer.

Numerous constituents have expressed to me their concern about the decline in banking services, for differing reasons. With technological advances, a growing number of people are now working from home and do not have to travel. People who work from home in more rural areas are faced with having to store cash reserves in their houses or make a timely journey to withdraw cash. For people who use public transport, that raises serious safety concerns.

Older people are much more likely to travel on public transport and are therefore being put at risk by the potential decline of ATMs. That situation is made more difficult by the recent closure of bank branches. If people do not have access to cash withdrawal facilities, there is a severe knock-on effect for the local economy. In some areas of my region, there has already been a spate of burglaries as a result of the potential increase in cash being stored under the bed. It would be logical to assume that the number of burglaries may increase further.

The risks and dangers that the situation could pose to the public outweigh the cost implications to the service providers. We must do everything within our power to ensure that ATM services remain in our communities.

The Deputy Presiding Officer

Thank you very much, Mr Corry. Your generosity has allowed the last two speakers to claw back to four minutes each.


Mark McDonald (Aberdeen Donside) (Ind)

I congratulate Dean Lockhart on securing today’s debate and I thank Which? and FSB for their campaign. I realise that the debate has focused predominantly on rural issues and rural communities, as is quite proper, but I wonder whether I might take the opportunity to include a city-based perspective. Clydesdale Bank currently proposes to close two bank branches in Scotland, one of which is in Mastrick in my constituency. The branch is located just opposite my constituency office in the Mastrick shopping centre. That branch has two ATMs attached to it. There is one other ATM in the centre, which is a Link ATM.

My concern, which brings me to speak in the debate, is that my constituents in Mastrick face a potential double whammy as a result of Clydesdale Bank’s decision to close its branch and the potential implications of the decision by Link to reduce the transaction fee and therefore potentially make its Mastrick ATM unviable. I want to explain why that is important.

Dean Lockhart quite rightly mentioned the issue of vulnerable and deprived communities. Although Mastrick has a number of low-income households and a number of elderly individuals, it is not classified as a regeneration area or a community of deprivation in the city of Aberdeen, so some of the protections and considerations that might be applied to deprived communities might not be applied in the situation as it relates to Mastrick, even though there are a number of people in the community who would fit in the categories of low-income, elderly or vulnerable, as well as digitally disenfranchised.

There is a wider implication regarding ATM coverage and the difficulty that people would have in a city context. I appreciate that distances in cities are dwarfed somewhat by the distances that individuals have to travel in a rural context, but even in a city context topography and public transport links can make it difficult for individuals to access alternative ATM provision if they face the nuclear option of all the ATMs disappearing, or of the ATM running out of money—something Gail Ross highlighted—which has happened at a number of ATMs in the area over holiday weekends, when the ATMs are not regularly topped up.

That could be a double whammy that would force people to look elsewhere, and that would have a knock-on effect on businesses. Dean Lockhart highlighted the £16 spend that takes place in businesses surrounding ATMs. There are a number of small local businesses in the Mastrick shopping centre, which benefited from the town centre regeneration funding that was put in place after 2007 and has seen the centre lifted, although there are still some empty units there.

Following discussions, Clydesdale Bank may reconsider its decision on the ATMs. The branch is going to close in June, and it has suggested that it will revisit its survey on ATM coverage and look at whether there is a possibility of retaining the ATMs, either in their current location or within another provider in the centre. My concern is that, if that does not happen, and given the potential for the Link machine to be viewed as unviable by the operator on the basis of the decisions that have been taken by Link in relation to the fees that are paid, my constituents and the businesses located in the Mastrick shopping centre will face a double whammy that would be highly unacceptable. I hope that the minister would agree with that.

It is important that that issue is reflected in today’s debate. We understand that, although the rural context is important, there are also impacts on populated urban communities as a result of Link’s decision.


Mairi Gougeon (Angus North and Mearns) (SNP)

I add my thanks to those offered by others around the chamber to Dean Lockhart for lodging the motion for today’s debate and for highlighting this important campaign. I also thank Which? and the FSB for their campaign, for keeping up the pressure on Link, and for the briefing material that they provided for the debate.

Although all the major banks are determined to make us think that no one needs or uses cash any more, so that they can get away with shutting all our branches, that simply is not the case. I read the statistics provided by Which? and the FSB with great interest. They found that the demand for banknotes had gone up by 10 per cent, with cash still the most widely used payment method right across the UK.

The threat from Link to reduce the interchange fee and the resulting impact that that could have on the network of ATMs across the country is bad enough in itself; that has been well articulated around the chamber today, particularly by Monica Lennon, who highlighted the point that those ATMs that charge people to access their own cash hit vulnerable people the hardest. However, the news about Link came straight on the back of the RBS announcement of bank branch closures and the obvious impact of that on the availability of ATMs, which came straight on the back of Clydesdale Bank closures and the removal of its ATMs. We have had the news recently about Santander, too. The cumulative effect of all those closures is huge, especially for the likes of Speyside; I was shocked to hear from Richard Lochhead that ATMs are all that it has left after all the high street bank branches have closed.

Such changes are made with no cognisance of those who use only cash, businesses that rely solely on cash transactions and the festivals and events that our rural communities hold, for which cash is so vitally important. My constituency of Angus North and Mearns has had six bank branch closures over the past two years; Clydesdale Bank closed three of four—in Brechin, Forfar and Stonehaven—and RBS soon followed with bank closures in Brechin, Laurencekirk and Stonehaven. There has also been the recent announcement of the closure of the Montrose branch.

Like many members, I was disgusted by last week’s news from the RBS chief executive, Ross McEwan, who told everyone that he was pleased that RBS had made a good start to the year—I am glad that it did, because nobody else did. In the first three months, RBS made a pre-tax profit of £1.2 billion, which was 70 per cent up on the same period last year. In the meantime, it is determined to pursue a programme of branch closures and has tried to appease us with woefully inadequate mobile branch visits—two hours a week is granted to Montrose, which serves not just the town but the wider north-east area that was forced to use that branch when the others closed—and mobile banks, which are inaccessible and do not give the full range of services. The closures force more pressure on the post office, which seems to pick up every major bank’s slack and, again, does not have the full range of services available.

I strongly urge Link to listen to this debate and to take heed of what all the members have said. I ask Link not to abandon the communities that it serves, as so many others have. The Tories have to act for the communities that they serve and do what they can to get the Government in Westminster to intervene and stop the RBS branch closures. It has the responsibility and the power to do something about that, and it beggars belief that it has done nothing so far.


The Minister for Business, Innovation and Energy (Paul Wheelhouse)

I thank Dean Lockhart for today’s debate. It is a very important subject, as we have heard from all today’s speakers. I appreciate that Mr Lockhart and many members have genuine concerns about Link’s proposed changes to interchange rates, the implications for the ATM network and the impact of those changes on consumers and businesses across Scotland.

Members will know that the UK Government retains legislative and regulatory responsibility for banking and financial services. However, Mairi Gougeon has made the point that we hope that UK Government ministers can take action to intervene, and I call on them to do so. I put on record that the Scottish Government stands ready to work constructively with all concerned, including UK ministers, in the interests of consumers and businesses.

Link has proposed changes to the operation of the UK’s ATM network with the intention of shifting incentives for ATM installation and operation from well-served urban areas to rural and financially excluded communities. As Monica Lennon and Jamie Halcro Johnston said, those machines are vital in allowing financially excluded communities and families to budget—they withdraw the money that they know they can spend without risk to their bottom line. That important function has not received the attention that it deserves. I take on board Mark McDonald’s point that, although the implications for rural communities are serious, there are issues for urban communities as well.

Link is introducing the measures because it believes that current incentives cause ATM providers to focus on profitable city centre areas where 80 per cent of free-to-use ATMs are within 300m of another free-to-use machine. It has proposed changes to the interchange rate to take effect from 1 July this year and is adopting a phased approach to the reform; we understand that each further reduction will be subject to further review by Link before implementation to assess the impact on consumers.

Link has said that there will be no change in the interchange rate for free-to-use ATMs that are 1km or more from the next nearest free-to-use ATM and, as Dean Lockhart said, it has indicated that 221 Scottish ATMs will be protected in this way. We also understand that Link is tripling its financial inclusion subsidy from 10p to 30p for ATMs in areas with poor cash access. I do not yet know whether that will support the community of Mastrick, for example, given the point that has been made about urban communities. However, like Mairi Gougeon, I hope that Link will listen to the concerns that have been raised in the chamber today with regard to both the urban and rural contexts.

We understand that Link believes that the changes are required to strengthen and increase the geographical coverage of the ATM network in the UK. We have to take it at its word, but I echo the response of members throughout the chamber: we need Link to carefully review the impact of its proposed changes on communities across Scotland and in the UK more widely.

Although Link’s aim to support the ATM network in vulnerable communities is laudable, the practical implications of the changes for consumers, businesses and communities in Scotland are as yet unclear. I was interested to hear the points that were made about the 10 per cent increase in cash use, and Richard Lochhead’s point about rural shows and other businesses that require cash was well made. In addition, charities in both rural and urban areas often require cash for donations.

The industry body, the ATM Industry Association, has estimated that as many as 10,000 free-to-use ATMs could be at risk as a result of LINK’s planned changes. The uncertainty surrounding the potential implications of the changes, on top of the continued branch closure announcements including that by Santander in the past week—Joan McAlpine mentioned a potential closure in Lockerbie—is unacceptable. Our communities need to know that they will continue to have free, secure access to cash to allow them to go about their daily lives.

I am pleased to support the save our cashpoints campaign that has been launched by Which? and the Federation of Small Businesses, although I am saddened that such a campaign is necessary. I have written to both the Payment Systems Regulator and the Treasury in support of the campaign, and I am pleased that I have received constructive responses from the Economic Secretary to the Treasury, John Glen.

The joint campaign by Which?, representing consumers, and the FSB, representing our small businesses, highlights the important role that cash continues to play in sustaining functioning local economies. Cash use is declining, although I take on board Mairi Gougeon’s point that there is evidence of a 10 per cent increase in cash use in recent times. For many, however, cash remains the preferred and in some case the only form of payment, and it accounts for 40 per cent of transactions.

I also note Maurice Corry’s point that there is a potential increased risk of burglary if people stash cash on their premises because they cannot rely on being able to access ATMs or bank branches, particularly if those facilities are far away from them, or if they are elderly.

I have no doubt that society as a whole is moving towards a cashless future, and there are opportunities and benefits to be achieved in doing so. However, the important point is that we are not there yet, and I am sure that we will not be there for quite some time to come. There is therefore a continued need for cash to be readily available to all.

The Which? and FSB campaign calls for the Payment Systems Regulator to conduct a wider market review to ensure that consumers continue to have access to cash. The review would cover the provision of free-to-use cashpoints and the long and short-term implications of Link’s decision, the requirement for Link to ensure that its financial inclusion policy meets the needs of consumers, and the long-term alternatives that will be available to consumers if free cashpoints are removed. As I said, I have written to the Payment Systems Regulator indicating the Scottish Government’s support for such a review.

Given the continuing trend of bank branch closures, it seems likely that the communities that are most affected by such closures will also be those that are most threatened by changes to the ATM network and face added uncertainty about the future of ATM provision.

I welcome the Payment Systems Regulator’s commitment to actively monitor developments as Link’s proposals are implemented. Indeed, that is a point with reference to John Glen’s response. I understand that the PSR will require Link to report to it monthly on the impact of the decision and on action that Link has taken to address any unexpected negative impact on the free-to-use ATM network.

If any protected ATM is due to close, the PSR is keen to ensure that there is a quick transition to a new operator without any adverse effects on consumers, and we need to hold it to that. I hope that the PSR will go further, using its regulatory powers and committing resource to ensure that no ATM in a vulnerable community closes until a new operator is found, and that communities are not left without free access to cash as a result of Link’s changes.

As Gail Ross, Dean Lockhart, Joan McAlpine, Monica Lennon and many others highlighted, concerns have been raised about the impact of branch closures on our local communities. As Richard Lochhead and Mairi Gougeon highlighted, those are being exacerbated by reductions in the services that are offered by mobile banking units to communities that have already been affected by branch closures. That is a matter of great regret. I think that we all agree that such closures are a body blow to communities across Scotland. They have left many areas with significantly reduced branch coverage.

Unfortunately, closure announcements continue, with Santander’s announcement being the latest. Link and the PSR have indicated that they will take into account the needs of communities that are affected by branch closures as, often, when a branch closes, an ATM—a vital source of cash—is lost alongside the branch services.

The Deputy Presiding Officer

Please conclude for 2 o’clock, minister.

Paul Wheelhouse

I support all the comments that have been made and I thank Dean Lockhart again for raising this important issue.