'Cash machine deserts' in poor areas
About 300,000 poor people live more than 1km from free cash machine, according to new figures
300,000 poor people live more than 1km from free cash machine
Labour MP Frank Field says figures show it is 'time to take the gloves off', with not enough progress in poorer areas
A woman using a cash machine. Photograph: Keith Morris/Alamy
More than 300,000 of Britain's poorest people live at least 1km
from a free-to-use cash machine, raising questions about whether the
most disadvantaged can obtain cash without paying a fee, the
government's adviser on poverty has said.
Figures obtained by the Guardian from the Link network, the body responsible for running Britain's ATMs, show there are 269 low-income areas lacking a free machine within a 1km radius.
These "cash machine deserts" mean people face a fee ranging from 75p to £10 to retrieve their money via an ATM, consumer groups say. The data shows that 150,000 of the most financially excluded people are in south Wales, the north-west and the north-east.
The Labour MP Frank Field, an adviser to the government on tackling poverty, said the figures showed it was "time to take the gloves off with the industry, as soft reasoning has not worked".
He said: "Getting the poor to pay for the privilege of taking out their own money is a grotesque practice, which should end immediately."
He said poor people often relied on cash machines that charged a flat fee, disproportionately hitting those on low incomes who withdraw small sums of money. "If you are a single young man, unemployed on benefits, you are charged £3 to take out your £56 a week in local shops. That's a ripoff that makes Wonga look like Santa Claus," Field said.
More than 7 million people – mostly the poor, disabled and unemployed – rely solely on cash for all their regular payments, up from 6.5 million in 2011. The industry argues that this cash economy is supported by a record number of cash machines – 66,134 across the UK.
But in a blunt warning Link admitted in 2013 to "increasing risks to the universal access-to-cash position that consumers have in the UK".
Field said there had been some progress since a Treasury select committee report in 2005 identified 309 cash machine deserts, but not enough had been done in poorer areas.
"We have had the main players washing their hands of responsibility and I am calling a summit in the new year with the industry's main players to address the issue. If they don't promise to phase out charges in poorer areas I will seek the chancellor's support in compelling them to do so."
In 2014 for the first time a payment systems regulator will be able to challenge the privately owned payments system to which Link reports, and cut the cost for new entrants to take on high street banks. The new regulator will have powers over ATM pricing and location, but the industry says cash machines will not be a priority because there is no "consumer issue".
Field said this smacked of complacency, noting the uproar over plans to scrap cheques, a decision that was swiftly reversed. "The fact these cash machines are currently unregulated and free to rip off the poor is appalling. Once it starts operating, the first objective of the new payment systems regulator must be surely to sort out these cash machine charges."
Despite strenuous denials from the industry, there have been persistent complaints about the lack of free-to-use machines in poorer areas. In 2013 Which? magazine said its snapshot survey found two deprived areas in London had far fewer free cash machines than more affluent parts of the city.
Field said: "More than half of all the cash machines in the poorest parts of my constituency in Birkenhead charge people to withdraw their money. Perhaps Link would like to prioritise these areas to make sure there are more free-to-use machines for people to use and fewer machines there to charge them?"
Cash machines are the most popular method of cash withdrawal in the UK. In 2011 people used ATMs a record 2.87bn times to withdraw a total of £191bn. A little over a decade ago almost all ATM services were provided by banks, but since then the market has undergone a radical shift, especially as a result of the rapid decline in the number of bank branches.
Now supermarkets and new companies such as Notemachine, which provides free withdrawals at a third of its 7,000 terminals, process more than half of ATM transactions. Link says the picture is improving: in 2006 there were 1,700 low-income areas with no free-to-use ATM either within them or within a kilometre of their centre. Since then it had installed 900 machines, it said.
But Field said it was only because the industry had been allowed to adopt the kilometre criterion that Link could "get away with dodgy figures".
He added: "Let's face it, it is the elderly, the hardpressed mum with kids and the disabled who are being asked to walk to get cash out. And then they pay to get their own benefits out."
John Howells, the chief executive of Link, said: "If lower-income people were forced to use surcharging machines then this would be a clear hardship and not tenable. However, Link's evidence is that this is not the case and most people can access cash on a free basis.
"Over the country as a whole, the number of free-to-use and pay-to-use ATMs is higher in more deprived areas. This is because there is more demand for cash in these areas and more suitable premises available, such as convenience stores."
COPY http://www.theguardian.com/society
Figures obtained by the Guardian from the Link network, the body responsible for running Britain's ATMs, show there are 269 low-income areas lacking a free machine within a 1km radius.
These "cash machine deserts" mean people face a fee ranging from 75p to £10 to retrieve their money via an ATM, consumer groups say. The data shows that 150,000 of the most financially excluded people are in south Wales, the north-west and the north-east.
The Labour MP Frank Field, an adviser to the government on tackling poverty, said the figures showed it was "time to take the gloves off with the industry, as soft reasoning has not worked".
He said: "Getting the poor to pay for the privilege of taking out their own money is a grotesque practice, which should end immediately."
He said poor people often relied on cash machines that charged a flat fee, disproportionately hitting those on low incomes who withdraw small sums of money. "If you are a single young man, unemployed on benefits, you are charged £3 to take out your £56 a week in local shops. That's a ripoff that makes Wonga look like Santa Claus," Field said.
More than 7 million people – mostly the poor, disabled and unemployed – rely solely on cash for all their regular payments, up from 6.5 million in 2011. The industry argues that this cash economy is supported by a record number of cash machines – 66,134 across the UK.
But in a blunt warning Link admitted in 2013 to "increasing risks to the universal access-to-cash position that consumers have in the UK".
Field said there had been some progress since a Treasury select committee report in 2005 identified 309 cash machine deserts, but not enough had been done in poorer areas.
"We have had the main players washing their hands of responsibility and I am calling a summit in the new year with the industry's main players to address the issue. If they don't promise to phase out charges in poorer areas I will seek the chancellor's support in compelling them to do so."
In 2014 for the first time a payment systems regulator will be able to challenge the privately owned payments system to which Link reports, and cut the cost for new entrants to take on high street banks. The new regulator will have powers over ATM pricing and location, but the industry says cash machines will not be a priority because there is no "consumer issue".
Field said this smacked of complacency, noting the uproar over plans to scrap cheques, a decision that was swiftly reversed. "The fact these cash machines are currently unregulated and free to rip off the poor is appalling. Once it starts operating, the first objective of the new payment systems regulator must be surely to sort out these cash machine charges."
Despite strenuous denials from the industry, there have been persistent complaints about the lack of free-to-use machines in poorer areas. In 2013 Which? magazine said its snapshot survey found two deprived areas in London had far fewer free cash machines than more affluent parts of the city.
Field said: "More than half of all the cash machines in the poorest parts of my constituency in Birkenhead charge people to withdraw their money. Perhaps Link would like to prioritise these areas to make sure there are more free-to-use machines for people to use and fewer machines there to charge them?"
Cash machines are the most popular method of cash withdrawal in the UK. In 2011 people used ATMs a record 2.87bn times to withdraw a total of £191bn. A little over a decade ago almost all ATM services were provided by banks, but since then the market has undergone a radical shift, especially as a result of the rapid decline in the number of bank branches.
Now supermarkets and new companies such as Notemachine, which provides free withdrawals at a third of its 7,000 terminals, process more than half of ATM transactions. Link says the picture is improving: in 2006 there were 1,700 low-income areas with no free-to-use ATM either within them or within a kilometre of their centre. Since then it had installed 900 machines, it said.
But Field said it was only because the industry had been allowed to adopt the kilometre criterion that Link could "get away with dodgy figures".
He added: "Let's face it, it is the elderly, the hardpressed mum with kids and the disabled who are being asked to walk to get cash out. And then they pay to get their own benefits out."
John Howells, the chief executive of Link, said: "If lower-income people were forced to use surcharging machines then this would be a clear hardship and not tenable. However, Link's evidence is that this is not the case and most people can access cash on a free basis.
"Over the country as a whole, the number of free-to-use and pay-to-use ATMs is higher in more deprived areas. This is because there is more demand for cash in these areas and more suitable premises available, such as convenience stores."
COPY http://www.theguardian.com/society
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