House of Commons Treasury Committee - United Kingdom

HC 544

House of Commons

Treasury Committee

Access to cash machines for basic bank account holders

Third Report of Session 2012–13

HC 544 Published on 31 August 2012

by authority of the House of Commons London: The Stationery Office Limited

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House of Commons

Treasury Committee

Access to cash machines for basic bank account holders

Third Report of Session 2012–13

Report, together with formal minutes and written evidence

Ordered by the House of Commons to be printed 9 August 2012

The Treasury Committee

The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs and associated public bodies.

Current membership

Mr Andrew Tyrie MP (Conservative, Chichester) (Chairman) Michael Fallon MP (Conservative, Sevenoaks) Mark Garnier MP (Conservative, Wyre Forest) Stewart Hosie MP (Scottish National Party, Dundee East) Andrea Leadsom MP (Conservative, South Northamptonshire) Mr Andy Love MP (Labour, Edmonton) John Mann MP (Labour, Bassetlaw) Rt Hon Pat Mcfadden MP (Labour, Wolverhampton South West) Mr George Mudie MP (Labour, Leeds East) Jesse Norman MP (Conservative, Hereford and South Herefordshire) Teresa Pearce MP (Labour, Erith and Thamesmead) David Ruffley MP, (Conservative, Bury St Edmunds) John Thurso MP (Liberal Democrat, Caithness, Sutherland, and Easter Ross)

Powers

The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.

Publication

The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/treascom. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volume(s). Additional written evidence may be published on the internet only.

Committee staff

The current staff of the Committee are Chris Stanton (Clerk), Lydia Menzies (Second Clerk), Jay Sheth and Adam Wales (Committee Specialists), Alison Game (Senior Committee Assistant), Steven Price and Lisa Stead (Committee Assistants) and James Abbott (Media Officer).

Contacts

All correspondence should be addressed to the Clerk of the Treasury Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5769; the Committee’s email address is [email protected]

Access to cash machines for basic bank account holders 1

Contents

Report Page

Introduction 3

1 Restricting access to cash machines 4 Background 4 Current status of cash machine access for bank account customers 5 The impact of restricting access to cash machine for basic bank account customers 7 RBS and Lloyds rationale for restricting access to cash machines for basic bank account customers 10 Cross subsidy for basic bank accounts and the potential impact of restricting cash machine access for basic bank account holders on competition 12

Conclusions and recommendations 14

Appendix 1: Correspondence 15 Letter to Stephen Hester (Group Chief Executive, RBS) from the Chairman, 5 October 2011 15 Letter to António Horta-Osório, (Chief Executive Officer, Lloyds Banking Group) from the Chairman, 5 October 2011 15 Response from Brian Hartzer, Chief Executive Officer UK Retail, Wealth & Ulster, RBS 7 October 2011 16 Response from Tim Tookey (Finance Director, Lloyds Banking Group), 25 October 2011 17 Letter to Chairman of the Treasury Committee from John Hughes, (Executive Director, Retail Banking), The Cooperative Bank, 17 April 2012 19

Appendix 2: LINK analysis of ATM closures 21 ATMs at Risk Across National Free to Use Network if Basic Bank Account Interchange Lost Through Customer Exclusion 21

Formal Minutes 36

List of printed written evidence 37

List of Reports from the Committee during the current Parliament 38


Introduction

1. The Treasury Committee has a long standing interest in financial inclusion1. The Committee’s recent report on the future of cheques played an important role in persuading the Payments Council to reverse its decision to close cheque clearing by 2018.2 Previous Committees have investigated cash machine (or automatic teller machine: “ATM”)3

charges and access to basic bank accounts.4

2. Basic bank accounts are available to those who may not meet banks’ minimum criteria to open a personal current account owing to a poor credit score or no credit history. There is evidence that access to a basic bank account can help those on lower incomes to manage their money more effectively. Furthermore, access to a bank account may promote financial inclusion by acting as a “gateway” to other mainstream financial services products, including saving, insurance and credit.5 It is important that banks fully consider the impact of any changes affecting basic bank account holders.

3. In August 2011, RBS wrote to customers with basic bank accounts to inform that them they would no longer be able to use cash machines run by other banks or independent third parties. The changes were phased in across each of the RBS brands, beginning with RBS basic bank accounts in October 2011 and NatWest (part of the RBS group) basic bank accounts in November 2011. Similar restrictions apply to customers with a Lloyds TSB basic bank account or a basic bank account opened after September 2011 with Bank of Scotland (part of Lloyds Banking Group).

4. In the light of the Treasury Committee’s concern about the impact of these restrictions on basic account holders, the Chairman of the Committee wrote both to RBS and Lloyds asking them to explain which services would be affected and the rationale for their decision. 6 The Committee asked other banks about the impact of these restrictions on their own provision of basic bank accounts and cash machine access when they gave evidence to the Committee on the final report from the Independent Commission on Banking. The Committee also considered evidence received during our inquiry into Competition and Choice in Retail Banking, and the potential impact of restricting access to cash machines for basic account holders on competition.

1 Financial inclusion refers to access to mainstream financial services products, Financial Inclusion Taskforce, Banking

services and poorer households, December 2010

2 Letter from Payments Council to the Chairman of Treasury Committee, 12 July 2011

3 Treasury Committee, Fifth Report of Session 2004–05,Cash Machine Charges, HC 191

4 Treasury Committee, Thirteenth Report of Session 2005–06, Banking the unbanked: banking services, the Post Office Card Account and financial inclusion, HC 1717

5 Financial Inclusion Taskforce, Banking services and poorer households, December 2010

6 Letter to Lloyds TSB from the Chairman of the Committee regarding universal access to cash machines, 5 October 2011. Letter to RBS from the Chairman of the Committee regarding universal access to cash machines, 5 October 2011.

4 Access to cash machines for basic bank account holders

1 Restricting access to cash machines

Background

What is a basic bank account?

5. Basic bank accounts are available to consumers who may not otherwise meet the minimum requirements to open a bank account because they have no credit history or a poor credit history. Basic bank accounts do not offer as many features as conventional personal current accounts—for example, basic bank accounts typically do not offer overdrafts and may not offer a debit card.7 However, basic bank accounts holders can receive payments directly into their accounts (including wages, State pensions and tax credits) and set up direct debits or standing orders to pay bills or make other payments.

6. Basic bank accounts are offered by 16 banks and building societies: Bank of Ireland (Northern Ireland), Bank of Scotland, Barclays, Clydesdale, Co-operative Bank, First Trust Bank, Halifax, HSBC, Lloyds TSB, Nationwide Building Society, NatWest, Northern Bank, Santander, The Royal Bank of Scotland, Ulster Bank and Yorkshire Bank.8

Why basic bank accounts were developed

7. The Financial Inclusion Taskforce was established in 2005. It is an independent body, which supports work to improve access to basic financial services (financial inclusion), particularly for those on lower incomes. In its report “Banking services and poorer households” 9 the Financial Inclusion Taskforce set out the background to the development of basic bank accounts:

In 1999 HM Treasury’s Policy Action Team 14 [PAT 14] made its report on access to financial services, taking a comprehensive look at the causes and consequences of financial exclusion. PAT 14 found that ensuring access to a bank account was an important foundation for putting help low-income households in a position to manage their money effectively, securely and confidently and to reduce some of the costs of managing in cash. PAT 14 also found that banking inclusion could serve as a gateway to other mainstream financial services, including saving, insurance and credit. Shortly after [...] PAT 14 made its report, the major banks agreed that each of them would offer a basic bank account alongside their other retail current accounts

8. The Financial Inclusion Taskforce established a target of halving the number of households with no access to a bank account from an estimated 2.3 million households in April 2003. This goal was achieved in 2009. The number of basic bank accounts has

7 Money Advice Service, Basic Bank Accounts, November 2011 compares features of different basic bank accounts—

see http://www.moneyadviceservice.org.uk/_assets/downloads/pdfs/your_money/a5_guides/basic_bank_accounts.pdf

8 Money Advice Service, Basic Bank Accounts, November 2011

9 Financial Inclusion Taskforce, Banking services and poorer households, December 2010, page 1


continued to grow by approximately 50,000 per year and it is estimated that there are now 8,423,000 basic bank accounts.10

Cash machines and interchange fees

9. In addition to dispensing cash, cash machines may also provide a number of other services. These include printed mini statements and on-screen balance checks, PIN services and paying bills. A number of cash machines offer non-banking services such as buying pay-as-you-go mobile phone credits or making charitable donations.

10. Cash machines rely on computer systems that send a customer’s account number, PIN and the type of transaction requested (e.g. cash withdrawal, bill payment) to the card issuer, who then approves or rejects the request. Following the recommendations of the Treasury Committee’s 2005 report on cash machines, if any charges to the consumer are made by the owner of the cash machine, the customer is then informed and given the opportunity to cancel before the transaction is completed.11

11. The card issuer is charged if a consumer uses a cash machine belonging to another bank, building society or provider. Card issuers must pay the owner of the cash machine a fee, the ‘multilateral interchange fee’ (commonly shortened to ‘interchange fee’) to cover the cost of the service provided. For example, if a customer of RBS uses a cash machine owned by Barclays to check the balance of their account, then RBS will pay Barclays a fee for this service. The Committee heard that these fees can vary depending on the service used (card issuers may be charged an interchange fee of 26p for cash withdrawals or 16p for balance enquiries) or whether the cash machine is located in a branch (interchange fees may be up to 35p for off-premises or ‘remote’ cash machines). 12

Current status of cash machine access for bank account customers

12. RBS and Lloyds currently limit access to cash machines for their basic account holders, with different restrictions applying to basic accounts provided by the Lloyds TSB, Halifax and Bank of Scotland arms of Lloyds Banking Group.

13. In response to the concerns raised by the Treasury Committee, Lloyds undertook to assess the feasibility of providing basic account holders with access to more cash machines within Lloyds Banking Group. When he appeared before the Committee on 23 November 2011, Lloyds interim CEO, Mr Tim Tookey confirmed that:

We are actually planning to extend the ATM access for all of our branded basic bank accounts to all of the ATMs that sit within all of the brands within Lloyds Banking Group.

10 British Bankers Association, Abstract of Banking Statistics Vol 28, 2010

11 Treasury Committee, Fifth Report of Session 2004-05, Cash machine charges, HC 191

12 Corrected transcript of oral evidence taken before the Treasury Committee on the Independent Commission on Banking’s Final Report, to be published as HC 1534-iii, Q265


So that means that a Lloyds TSB customer would be able to access their cash free of charge not just from Lloyds TSB and the Post Office ATMs as today, but also from Halifax and Bank of Scotland branded ones.

14. Lloyds TSB basic bank account customers can now use all cash machines across Lloyds Banking Group (which includes Halifax, Bank of Scotland and Cheltenham & Gloucester). Customers who opened basic bank accounts with Bank of Scotland after September 2011 may only also use Lloyds Banking Group ATMs. However, there are no restrictions on access to cash machines for Halifax basic bank account customers and Bank of Scotland basic bank account customers who opened an account before September 2011.

15. In August 2011 RBS wrote to its basic account holders to inform them that their access to cash machines would be restricted to cash machines owned by the RBS group including RBS branded cash machines in branches of Tesco and Morrisons supermarkets. The changes were phased in, beginning with RBS accounts in October 2011 and NatWest accounts in November 2011.

16. At present, basic accounts offered by other banks do not restrict access to cash machines located in the UK. Three of these banks—Barclays, Santander and HSBC—confirmed to us in oral evidence that they do not intend to introduce similar restrictions. Antony Jenkins, Chief Executive of Retail and Business Banking at Barclays, one of the largest providers of basic bank accounts, said that his bank would not introduce charges on basic account holders using non-Barclays cash machines.13 Ana Botín, Chief Executive Officer of Santander UK told us that Santander had “no plans to change” basic account holders’ access to non-Santander cash machines. 14 Douglas Flint, CBE, Group Chairman of HSBC, told us that HSBC remained committed to the continued provision of banking services including unrestricted access to other banks’ ATMs for all account holders.15

17. We note the insistence by Lloyds and RBS that they are still committed to providing basic account services and that basic account holders will continue to have access to a large network of ATMs. RBS said that:

We currently have over 8000 cash machines through RBS, NatWest, Tesco and Morrisons making it one of the largest ATM networks in the UK. Our decision was taken with the knowledge that nine out of ten Basic Account holders live within one mile of an RBS ATM or Post Office and so would continue to have widespread convenient free access to cash. Where a concern is raised we are dealing with those customers individually. If a customer advises us that it is more difficult to get access to their cash at one of our ATMs or the Post Office, because they live in a remote rural location or have a disability, we are providing an account that provides full ATM access. We have written to all basic account customers to ask them to get in

13 Uncorrected transcript of oral evidence taken before the Treasury Committee on the Independent Commission on

Banking’s Final Report, HC 1534-vi, Q589

14 Uncorrected transcript of oral evidence taken before the Treasury Committee on the Independent Commission on Banking’s Final Report, HC 1534-v, Q412

15 Ibid.


touch if this applies to them to try to minimise the impact on potentially vulnerable customers.16

18. Similarly, Lloyds told us:

All the Group’s basic bank account customers can access their money at around 12,000 Post Offices throughout the UK. This means that over 95% of our customers are able to access cash withdrawal facilities within one mile of their home and usually at a substantially lower distance.17

The impact of restricting access to cash machine for basic bank account customers

Potential impact on financial inclusion and provision of basic accounts

19. In addition to the impact on affected RBS and Lloyds Banking Group basic bank account customers, the Committee heard concerns that these restrictions might reduce financial inclusion by discouraging unbanked individuals without bank accounts opening new basic bank accounts, and existing basic bank account holders from using them. Consumer Focus told us that:

although there are still nearly a million people without bank accounts, the banking sector has been working hard to steadily reduce this figure. Short-sighted moves like this will only help to reverse the good work that has been done. People living in rural areas deserted by bank branch closures may not have the option of other ATMs nearby.18

20. Other providers of basic bank accounts have highlighted their concerns that the restrictions imposed by RBS and Lloyds may force them to reconsider whether they can continue to offer basic bank accounts with unrestricted access to cash machines to new customers. This is because limiting access to cash machines for basic account holders has reduced the amount of interchange fees RBS and Lloyds pay to other banks and independent cash machine providers. However, other banks who do not restrict access in this way must continue to pay interchanges fees to RBS and Lloyds even though they now receive a lower level of interchange fee income. Chris Rhodes, Group Product & Marketing Director at Nationwide Building Society, told us that:

The ATM system is effectively an ecosystem with a reciprocity agreement between all institutions. Our customers can use Nationwide ATMs for free, and we just incur the cost of running the ATMs, or they can use another institution’s ATMs [...] As soon as somebody restricts access to the whole estate then effectively someone else is going to pay the income cost and the ecosystem moves [...] they [RBS and Lloyds] are

16 RBS, Supplementary evidence submitted to the Treasury Select Committee on the Independent Commission on

Banking’s Final Report, 12 December 2011.

17 Letter to the Chairman of the Committee from Lloyds regarding universal access to cash machines, 25 October 2011.

18 Consumer Focus is the statutory consumer champion for England, Wales, Scotland and (for postal consumers) Northern Ireland.


taking a benefit and effectively imposing costs on others, which may cause other people to have to change their stance.19

21. The Cooperative Banking Group, which is one of the largest providers of basic accounts, wrote to us to highlight its concern their restrictions might signal the start of a trend towards restricted cash machine access for all basic bank accounts. In a letter to the Chairman of the Treasury Committee, John Hughes, its Executive Director of Retail Banking, noted that:

Given there is a cost to providing basic bank accounts, our disproportionate and increasing market share is unsustainable. Particularly with regard to ATMs, we believe that the moves by others to restrict access have had a detrimental impact on customers’ ability to access their money and a negative impact on our own business. We are clear that, if it becomes the convention that banks place restrictions on ATM access for their basic bank account customers, we would have to, regretfully, consider following suit.20

Potential impact on the size of the free to use cash machine network

22. If adopted by other providers of basic bank accounts, limiting access to cash machines for basic bank account customers could lead to an overall reduction in the number of free to use cash machines provided outside of bank branches. For free to use cash machines, the more transactions undertaken, the more interchange fee is generated, and the more profitable the machine. If free to use cash machines are used less frequently because of restrictions on access for basic bank account customers, they are at an increased risk of closure or, in the case of cash machines not operated by banks, of converting to charging consumers at the point of use.

23. In a memorandum submitted to the Treasury Committee on the potential scale of this problem, LINK21 said that:

“issuers removing all LINK access for Basic Bank Accounts and/or leaving LINK could risk closing or turning fee paying approximately 4,000 ATMs nationally. These machines are the free to use non-bank ATMs with LINK cash withdrawals of under 1,000 per month”.22

19 Corrected transcript of oral evidence taken before the Treasury Committee on the Independent Commission on

Banking’s Final Report, to be published as HC 1534-iii, Q269

20 Letter to the Chairman of the Committee from Co-operative Banking Group regarding access to basic bank accounts,17 April 2012

21 LINK sets the rules for ATM operators who want their cash machines to be part of the UK ATM network or card issuers who want their cardholders to be able to use the UK network.

22 LINK, memorandum submitted to the Treasury Committee, “ATMs at Risk Across National Free to Use Network if Basic Bank Account Interchange Lost Through Customer Exclusion”, 23 March 2012. LINK notes that their analysis excludes cash machines that are located in bank and building society branches as these typically have a customer relationship role that justifies them beyond pure profitability considerations.


Figure 1: free to use non-branch cash machines at risk of closure or conversion to charging consumers at the point of use

Source: LINK

24. LINK found that free to use cash machines at risk of closure or conversion to direct consumer charging may be concentrated in the North East, Wales and Scotland. They identified as potentially at risk 12% (208) of free to use ATMs in the North East, 11% (222) of free to use ATMs in Wales and 11% (473) free to use ATMs in Scotland. 23

23 LINK, “ATMs at Risk Across National Free to Use Network if Basic Bank Account Interchange Lost Through Customer

Exclusion”, 23 March 2012.

0

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0-1k 1k-2k 2k-3k 3k-4k 4k-5k 5k-6k 6k-7k 7k-8k 8k-9k 9k -10k

10k -11k

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15k -16k

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17k -18k

18k -19k

19k -20k

20k -21k

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22k -<30k

Number of LINK cash withdrawals per month Free to use, remote ATMs

Number of ATMs

Shape of distribution means that free to use non-branch remote ATMs with cash withdrawalsof under 1,000 per month are most at risk.


Figure 2: free to use cash machines most at risk of closure or conversion to charging consumers at the point of use by region

Source: LINK

26. Appendix 2 sets out further detail on the potential loss of free to use cash machines by constituency area. In their analysis, LINK suggested the highest losses “would potentially be highest in more deprived and rural areas”24.

RBS and Lloyds rationale for restricting access to cash machines for basic bank account customers

27. In October 2011 the Chairman of the Treasury Committee wrote to both RBS and Lloyds asking them to explain which services would be affected by these restrictions and the rationale for their decision.25

28. Both RBS and Lloyds cited cost control as the underlying rationale for restricting access to cash machines owned by other banks or independent operators. RBS said:

We currently pay a charge on every transaction, every time someone checks their balance or makes a withdrawal at an ATM run by another company. As a consequence we are running our basic accounts at a loss to the bank which we need to reduce.26

24 LINK, “ATMs at Risk Across National Free to Use Network if Basic Bank Account Interchange Lost Through Customer

Exclusion”, 23 March 2012.

25 Letter to Lloyds TSB from the Chairman of the Committee regarding universal access to cash machines, 5 October 2011. Letter to RBS from the Chairman of the Committee regarding universal access to cash machines, 5 October 2011.

26 RBS, Supplementary evidence submitted to the Treasury Select Committee on the Independent Commission on Banking’s Final Report, 12 December 2011

The North East and Wales would potentially have the highest impact

How Regions are Likely to be Impacted

Region At Risk ATMs

Total ATMs

% at Risk

London 377 5885 6.4

South East 447 5417 8.3

Eastern 320 3557 9.0

South West 363 3281 11.1

East Midlands 310 2914 10.6

West Midlands 310 3413 9.1

Yorkshire & Humber 339 3540 9.6

North East 208 1718 12.1

North West 421 4803 8.8

Scotland 473 4281 11.0

Wales 222 1940 11.4

Northern Ireland 126 1315 9.6

East ofEngland

Wales

East Midlands

North East

London

South EastSouth West

North West

West Midlands

Yorkshire andthe Humber

Scotland

Northern Ireland

% ATMs at Risk

11.4 to 13%10.5 to 11.4%9 to 10.5%6 to 9%


29. Lloyds said that the “rising cost of provision” prompted the decision to restrict ATM access for basic account holders in 2006. Lloyds also noted that other banks recouped the cost of running basic accounts in different ways, for example through higher unpaid items charges or limited branch counter services.

30. The Committee asked RBS and Lloyds for further detail on the cost savings produced by these restrictions. Lloyds told the Committee that these restrictions would only apply to Bank of Scotland basic bank account opened after September 2011. As a result Lloyds expect to generate a saving of approximately £12 per account:

With specific reference to BoS [Bank of Scotland], we opened around 15,000 new basic bank accounts last year—although this number will fluctuate each year. The average cost of ATM/Interchange fees is around £12 per customer per year. As a result [of these restrictions], Lloyds Banking Group avoids a cost of some £180,000 a year—although this figure will grow as our customer base continues to grow27.

31. The estimated saving of £180,000 is 0.25% of the £72 million of Lloyds operating cost for basic bank accounts, 0.005% of Lloyds’ £3,542 million losses for 2011, and 0.22% of the “£85 million [invested] in communities in 2011, including support for financial inclusion and capability”.28

32. RBS reported that their restriction on cash machine access for basic bank account customers prompted “less than 730 complaints from our approximately 1m basic bank account holders between August 2011 and April 2012” and produced a cost saving of approximately £10 per account:

The average annual cost of operating a basic bank account before the change was approximately £70. That cost is now closer to £60 and even when taking into consideration the revenue we receive from the accounts we continue to make a loss on providing the service.29

33. The total cost saving is around £10 million, which represents a 14% reduction in the £70 million cost of providing basic accounts for RBS. For comparison this is 0.16% of RBS’s 2011 core operating profits of £6,095 million30 and 13.9% of the £72 million RBS invested in “community programmes [...] including financial education and inclusion.”31

27 Lloyds, Supplementary evidence submitted to the Treasury Select Committee on the impact of changes to basic bank

accounts, Ev 4

28 Lloyds, Community Investment http://www.lloydsbankinggroup.com/community/community_investment.asp

29 RBS, Supplementary evidence submitted to the Treasury Select Committee on the impact of ATM changes for basic bank account holders, Ev 1

30 RBS 2011 annual results, http://www.investors.rbs.com/download/announcements/announcement_23feb2012.pdf

31 RBS, Community Programmes, http://www.rbs.com/sustainability/community-programmes.html


Cross subsidy for basic bank accounts and the potential impact of restricting cash machine access for basic bank account holders on competition

34. As discussed earlier, both Lloyds and RBS told us that basic accounts are provided at a loss, and that restrictions on cash machine access were intended to reduce this.

35. However, all ‘free banking’ services including basic bank accounts are cross-subsidised. When questioned about the cost of current account provision in 2009, Helen Weir, Group Executive Director at Lloyds Banking Group, told the Treasury Committee that “the cost of a current account is quite significant, as you’ll appreciate [...] Typically the cost of the branch network, the cost of providing ATMs, cheque facilities, the debit cards”.32

36. The Treasury Committee examined the issues relating to cross subsidy in its Report ‘Competition and Choice in Retail Banking’ (2011):

The features of the ‘free banking’ model are a free-in-credit charging structure, where regular fees for operating the account are not charged but credit interest tends to be low and explicit charges are levied for certain types of transaction or service, which have been historically related to overdrafts. Before 1985 the transaction-based model, under which consumers were charged per transaction or per block of transactions was predominant in the UK. 33

37. One of the problems with the ‘free banking’ model is that costs and profitability become extremely obscure, as does the price paid by the consumer. Furthermore, cross-subsidies may be a significant obstacle to competition between banks. In a well-functioning market existing suppliers not only compete with each other, but have to deal with the threat of potential new entrants.34 However ‘free banking’ may deter competition between banks where incumbents choose to provide accounts at a loss or marginal profit, and generate revenue from other sources such as net credit interest (the difference between the interest paid on credit balances to consumers and the income derived from the bank from these funds)35. This may make it harder for new entrants to offer similar services profitably. As set out in our Report on competition and choice:

Concerns about the effectiveness of competition in the banking market go back many years. In 1998, the then Chancellor invited Sir Donald Cruickshank to undertake a review of the retail banking sector in the UK. In March 2000, Sir Donald Cruickshank published his report Competition in UK Banking. The Cruickshank report on competition in UK retail banking expressed concern about the high levels of concentration in UK retail banking, particularly in the personal current account and SME markets. The financial crisis—which has resulted in consolidation across

32 Oral evidence to the Treasury Committee, Competition and Choice in Retail Banking’, 7 December 2010, Q151

33 Treasury Committee, Ninth Report of Session 2010–11, Competition and choice in retail banking, HC 612–I

34 Ibid.

35 Ibid.


the sector through mergers and exit from the market—has led to a significant increase in concentration in many parts of the retail market.

For competition to be effective, customers need to know what they are buying and how much it costs. They also need to be able to transfer their custom from one provider to another [...] we are concerned at the continuing lack of price transparency and comparability in the personal current account market. Without such clear information it is impossible for consumers to distinguish between the offers made by rival providers and indeed lack of transparency reduces the incentives for those providers to make distinctive offerings.36

38. In their justification for restricting access to cash machines for basic account holders, RBS and Lloyds appear to focus only on the element of cross-subsidy for basic bank accounts, without seeking to address the wider issues of cross-subsidy inherent in ‘free banking’.

39. As discussed earlier, it is possible that restrictions on access to cash machines for basic account holders may reduce the overall number of free to use cash machines. One unintended consequence of this could be to increase the cost barrier to new retail banks entering the market. The interchange fee system allows new retail banks to offer access to an extensive existing network of cash machines without having to invest in new machines of their own. It could be argued that a common platform may inhibit the innovation of new products and services. However a smaller or more fragmented cash machine network could favour incumbent banks with large existing cash machine networks and make it more expensive for new providers of retail banking services to enter the market.

36 Ibid.


Conclusions and recommendations

1. RBS and Lloyds have chosen to limit access to cash machines for basic bank account holders on the grounds of cost, yet the cost savings — around £10 per account for RBS and £12 per account for Lloyds—appear to be relatively small and have potentially disproportionate effects. Their actions also sit uncomfortably with their stated commitment to basic bank accounts.

2. As the main purpose behind the development of the basic bank account initiative was to improve financial inclusion, it is particularly regrettable that this ‘beggar my neighbour’ approach may lead to the closure or, in the case of cash machines not operated by banks, conversion to charging of existing free to use cash machines. We recommend to the banks concerned that these restrictions be removed.

3. The Committee raised the commitment to provision of basic banking services with unrestricted cash machine access with other major banks that provide basic bank accounts. We welcome the public commitment given by Barclays, HSBC and Santander to continue to provide basic bank account holders with unrestricted access to cash machines. We intend to write to the other institutions that provide basic bank accounts asking them to confirm that that they will continue to offer this service, and that they do not intend to restrict cash machine access for any of their customers. We will publish their responses.


Appendix 1: Correspondence

Letter to Stephen Hester (Group Chief Executive, RBS) from the Chairman, 5 October 2011

I am writing to you concerning Royal Bank of Scotland’s recent decision to prevent its basic bank account customers from using other banks’ ATM machines. I am concerned that the effect of your decision may be to prevent people in this category from using the majority of the UK’s free cash machine network. Your decision has major implications for access to universal banking services and appears to target vulnerable consumers who are most at risk of financial exclusion. It also appears to place in doubt RBS’s commitment to the provision of basic bank accounts.

We have received a large number of letters from members of the public, as well as from Members of Parliament and representatives of consumer groups who are concerned by your decision and who have asked the Treasury Committee to look more closely at this issue.

I am writing to you in the first instance to ask you to outline in greater detail:

what specific services are being withdrawn from RBS basic bank account customers and the time–frame over which this will be done:

• the rationale behind the decision to prevent your basic bank account customers from using rival banks’ ATM machines;

• the cost savings which RBS expect to make from the introduction of this measure;

• how many RBS customers will be affected by loss of access to other banks’ ATMs; and

• whether RBS remains committed to basic bank account provision.

I have also written to Lloyds Banking Group in similar terms to ask them to explain their approach to basic bank accounts.

Letter to António Horta-Osório, (Chief Executive Officer, Lloyds Banking Group) from the Chairman, 5 October 2011

I am writing to you for clarification on Lloyds Banking Group’s policy regarding the access your basic bank account customers have to other banks’ ATM machines. I am concerned that many basic bank account customers do not have access to other banks’ ATMs and that this number may increase further in the future with the consequence that people in this category will be unable to use the majority of the UK’s free cash machine network. This has major implications for access to universal banking services and on vulnerable consumers who are most at risk of financial exclusion.

We have received a large number of letters from members of the public, as well as from Members of Parliament and representatives of consumer groups who have asked us to examine this issue more closely.


I am writing to you in the first instance to ask you to outline in greater detail LBG policy on access to cash machines for your basic current account customers. In particular, which LBG brands currently offer such account holders access to other banks’ ATMs and which do not, as well as your future plans in this area. We would also welcome the following further information in those cases where particular brands do not offer access to other banks’ ATMs:

• the rationale for preventing basic bank account customers from using other banks’ ATM machines;

• the cost savings you have made from the introduction of this measure;

• how many LBG basic bank account customers do not have access to other banks’ ATMs; and

• whether LBG remains committed to basic bank account provision through their individual banks.

I have also written to the Royal Bank of Scotland in similar terms to ask them to explain their approach to basic bank accounts.

Response from Brian Hartzer, Chief Executive Officer UK Retail, Wealth & Ulster, RBS 7 October 2011

Thank you for your letter to Stephen Hester. I am replying as I have responsibility for Retail Banking at RBS, including basic bank accounts and I would like to explain the background to this decision.

When I joined RBS two years ago it was clear to me that the retail bank needed to change to deliver products and services that customers wanted and that were sustainable in the long-term. We looked at every aspect of our business and have made a number of significant changes. Some decisions have been easy, like reducing our unauthorised borrowing fees. Others have been very difficult like our recent decision to withdraw the use of non-RBS cash machines for our basic bank account customers. This comes into effect for existing customers later this year and I understand you may have concerns about this.

I am grateful for the opportunity to explain to the Committee why we have taken this decision and what measures we have put in place for the small number of customers which will be impacted the most. First, I want to assure you that we remain fully committed to offering a free basic account for people who might otherwise struggle to access banking services. There is no question about that. However, to continue to offer this service we have to make sure it is financially sustainable in the same way we would expect all our products to be.

We currently pay a charge on every transaction, every time someone checks their balance or makes a withdrawal at an ATM run by another company. As a consequence, we are running our basic accounts at a loss to the bank which we need to reduce. If we continue to make losses we will not be able to innovate and invest in our business, ultimately to the detriment to all of our customers. Furthermore, any subsidy for basic account holders needs to be paid for by our other customers. This is not fair on them. It is also out of tune


with regulatory pressures to reduce instances of "excess profits" made in one area to subsidise others.

Other banks have chosen different ways to make their basic accounts more sustainable such as restricting counter access, not issuing debit cards or restricting ATM use. We will continue to offer basic bank account holders full counter access and a VISA debit card which we believe are important. The debit card means they also have the ability to get cash back at retailers which is popular with our customers. Even after these changes, nine out of ten basic account holders will live within one mile of an RBS ATM or Post Office where they can get free access to their cash. We currently have over 8000 cash machines through RBS, NatWest, Tesco and Morrisons making it one of the largest ATM networks in the UK.

We do realise however, that some of our 1.1 million basic account customers may find it more difficult to get access to their cash at one of our ATMs or the Post Office, perhaps because they live in a remote rural location or have a disability which may make access to cash a severe hardship. We have written to customers to advise them that we will look at these individual cases and try to find solutions for them, such as providing them with an account with full cash machine access. Any customers who are in this position should contact us and we will review their situation.

I hope this provides some reassurance that we are committed to basic bank account provision and that this is not a decision we took lightly.

Response from Tim Tookey (Finance Director, Lloyds Banking Group), 25 October 2011

Thank you for your letter of 5 October. I hope my response below answers your questions in full.

The Group provides basic bank accounts across each of its main banking brands—Lloyds TSB, Halifax and, Bank of Scotland and is the largest provider of such accounts in the UK, with a share considerably larger than the Group’s share of the overall personal current account market.

We remain committed to continuing to provide a basic bank account service under each brand for people who might otherwise struggle to access free banking services. Our customers can access their cash using a variety of methods and channels, many which were not available when basic bank accounts were first launched.

The position on ATM access by brand is as follows:

• Lloyds TSB decided in 2006 to restrict ATM access to basic bank account customers to LTSB ATMs only.

• Bank of Scotland has recently made a change relating to new customers who can now use Halifax, Bank of Scotland and Sainsbury’s ATMs. Existing customers’ access to other banks’ ATMs remain unaffected.

• Halifax basic bank account customers have free access to all other banks’ ATMs. We have no plans to change this.


In addition, we have a contract with the Post Office which means that all the Group’s basic bank account customers can access their money at around 12,000 Post Offices across the UK. This means that over 95% of our customers are able to access cash withdrawal facilities within one mile of their home and usually at a substantially lower distance. For our Bank of Scotland customers living in more remote areas, many also make use of the mobile banking facilities we provide.

We have also invested in a range of other service improvements to the benefit of our basic bank account customers. For example, all have full access to phone and internet banking and all can have a debit card giving them cash back facilities at participating retailers.

The ability to control and manage money is also a key concern for basic bank account customers. We have developed and extended the Lloyds TSB Money Manager service, an internet based budgeting tool whose value has been praised by independent consumer groups, to LTSB basic bank account customers on the same basis as full facility customers. Similarly, the LTSB mobile phone text alert service, which keeps customers informed of their balance and alerts when balances are low is available to all of our basic bank account customers.

The relative attractiveness of our services may be inferred from the flow of new customers to our respective basic bank account brands. We have opened 118,000 new LTSB cash accounts for customers over the past 12 months; 100,000 for Halifax and 15,000 for Bank of Scotland.

Reflecting on the question you raise in your letter, the reason that Lloyds TSB restricted ‘all bank’ ATM access in 2006, and Bank of Scotland subsequently, was the rising cost of provision of this access. As you will be aware, each time a customer of ours makes a cash withdrawal or a balance-check at another bank’s ATM, we incur an interchange charge to that bank. These charges are typically 21 pence per transaction in branch ATMs, rising to 35p per transaction for ATMs in prime sites, e.g. mainline railway stations.

The Group has around 4,300,000 basic bank account customers across the three brands. Some 650,000 of these, who are LTSB customers, have ‘their brand’ ATM access, as well as the Post Office and Visa debit card cash back facilities, that we introduced in 2006 when "all bank" ATM access was withdrawn.

The integration between the former Lloyds TSB and HBOS back office IT systems is now largely complete i have asked our team to assess the operational practicalities of extending ATM access across all three banks within the Group’s estate. That is, all LTSB basic bank account customers would gain access to Halifax and Bank of Scotland ATMs, with Bank of Scotland customers gaining access to LTSB and Halifax ATMs. The preliminary assessment is that, while there would be some operational and IT cost, it could be done without significant disruption to our customers and would extend the "within 1 mile" access to a wider range of our basic bank account customers, without the additional ongoing interchange fees to other banks. If I may, I will write to you again shortly once I have the team’s final assessment.

I hope too that you will see this as a clear demonstration of our ongoing commitment across all of our main banking brands to providing services for basic bank account customers.


Letter to Chairman of the Treasury Committee from John Hughes, (Executive Director, Retail Banking), The Cooperative Bank, 17 April 2012

The Co-operative Banking Group is part of The Co-operative Group, the UK’s largest consumer-owned business. With a combined network of 345 branches serving 8.5 million customers we offer a compelling alternative to the PLC banks. In the UK we currently have, approximately, a 2% share of the Personal Current Account (PCA) market.

Taking a responsible approach to business has been a guiding focus of The Co-operative Group since its formation and The Co-operative Bank has worked to promote access to banking with some of the most excluded groups, such as prisoners, since we believe that banks can—and should—play their part in offering people a fresh start.

I wanted to take this opportunity to share our views about the current state of the basic bank account market, and to raise some of our own concerns.

We recognise the importance of access to a transactional bank account in order that people may participate actively in contemporary life. The Co-operative Bank has provided, since 2002, Cashminder as our basic bank account. We have, approximately, a 3.5% stock share of the basic bank account market. Our market share is increasing on an annual basis. By the end of 2011 we were opening, approximately, 8.5% of all new basic bank accounts in the UK, which is massively disproportionate to our ‘stock’ current account market share.

We believe that our disproportionate, and increasing, share of the market reflects the increasing range of discrepancies in the basic bank account market with some providers now offering much more to customers than others. For example, The Co-operative Bank is already one of only two providers, which offer basic bank accounts to undischarged bankrupts, there is wide variation in the level of access to branch counters and, of course, you are aware that some banks have restricted ATM access to basic bank account customers.

Given there is a cost to providing basic bank accounts, our disproportionate, and increasing, market share is unsustainable. Particularly with regard to ATMs, we believe that the moves by others to restrict access have had a detrimental impact on customers’ ability to access their money and a negative impact on our own business. We are clear that, if it becomes the convention that banks place restrictions on ATM access for their basic bank account customers, we would have to, regretfully, consider following suit.

We would welcome further consideration of the basic bank account market by your Committee. We believe that measures must be introduced to ensure all banks, including new entrants, genuinely perform on the issue of basic banking. These measures should include compelling all banks to publish their market share figures for existing and new basic bank accounts, in addition to offering their basic bank accounts to undischarged bankrupts and reducing restrictions on ATMs and branch counter access.

In addition, we have welcomed Consumer Focus’ proposal outlined in their recently published annual plan for 2012–13 that they will work with banks and regulators to ‘agree a core set of appropriate standards for basic bank accounts’. We will be supporting Consumer Focus in their efforts to deliver this policy proposal.


I hope this helps your deliberations.


Appendix 2: LINK analysis of ATM closures ATMs at risk across national free to use network if issuers remove all LINK access for Basic Bank Accounts and/or leave LINK altogether

Westminster Constituency At Risk ATMs

Total ATMs % at Risk

Carmarthen East and Dinefwr 12 33 36.4

Na h-Eileanan an Iar 11 31 35.5

Sheffield, Hallam 9 28 32.1

Caithness, Sutherland and Easter Ross 18 62 29.0

Brecon and Radnorshire 13 48 27.1

Preseli Pembrokeshire 13 54 24.1

Argyll and Bute 18 76 23.7

Mid Derbyshire 10 44 22.7

Luton North 8 36 22.2

Broadland 8 37 21.6

Scarborough and Whitby 19 88 21.6

Cynon Valley 9 42 21.4

Ross, Skye and Lochaber 13 61 21.3

Ynys Mon 9 43 20.9

Wythenshawe and Sale East 20 99 20.2

Brent Central 15 75 20.0

Wyre and Preston North 11 55 20.0

Boston and Skegness 18 91 19.8

North Cornwall 12 61 19.7

Ochil and South Perthshire 12 61 19.7

Berwick-upon-Tweed 9 46 19.6

Llanelli 9 46 19.6

Meriden 17 88 19.3

Forest of Dean 5 26 19.2

Great Yarmouth 15 78 19.2

Louth and Horncastle 10 52 19.2

Bolton West 9 47 19.1

Bolsover 8 42 19.0

Orkney and Shetland 4 21 19.0

St. Austell and Newquay 13 69 18.8

East Kilbride, Strathaven and Lesmahagow 12 64 18.8

Dumfriesshire, Clydesdale and Tweeddale 11 59 18.6

Camborne and Redruth 8 43 18.6

North Norfolk 9 49 18.4

Ayr, Carrick and Cumnock 17 93 18.3

Easington 9 50 18.0

Tewkesbury 9 50 18.0

Dumfries and Galloway 15 84 17.9

Newry Armagh 15 84 17.9


Neath 8 45 17.8

Hayes and Harlington 23 131 17.6

Central Devon 8 46 17.4

Newcastle upon Tyne North 8 46 17.4

Sunderland Central 19 110 17.3

Faversham and Mid Kent 5 29 17.2

Motherwell and Wishaw Burgh Const 12 70 17.1

South Northamptonshire 8 47 17.0

South Shields 9 53 17.0

Brighton, Kemptown 6 36 16.7

Redcar 10 60 16.7

Rhondda 6 36 16.7

Ribble Valley 7 42 16.7

Romsey and Southampton North 5 30 16.7

Sleaford and North Hykeham 7 42 16.7

St. Ives 10 60 16.7

Stourbridge 7 42 16.7

Bishop Auckland 8 49 16.3

North East Hampshire 7 43 16.3

Gainsborough 6 37 16.2

Dover 10 62 16.1

Mid Bedfordshire 5 31 16.1

Stone 5 31 16.1

Windsor 10 62 16.1

Leeds West 7 44 15.9

Erewash 10 63 15.9

Eddisbury 6 38 15.8

Isle of Wight 15 95 15.8

The Wrekin 8 51 15.7

Hemsworth 5 32 15.6

South Derbyshire 5 32 15.6

Norwich North 7 45 15.6

Devizes 8 52 15.4

Leicester West 10 65 15.4

Penrith and The Border 8 52 15.4

Blyth Valley 7 46 15.2

South West Devon 7 46 15.2

Don Valley 5 33 15.2

Hartlepool 10 66 15.2

Kenilworth and Southam 6 40 15.0

North East Bedfordshire 6 40 15.0

Kingston upon Hull West and Hessle 19 127 15.0

Birmingham, Hodge Hill 7 47 14.9

Midlothian 8 54 14.8

Ogmore 4 27 14.8


Tatton 8 54 14.8

Blaenau Gwent 5 34 14.7

Mid Dorset and North Poole 5 34 14.7

North Tyneside 10 68 14.7

West Tyrone 10 68 14.7

East Worthing and Shoreham 6 41 14.6

Haltemprice and Howden 6 41 14.6

Middlesbrough South and East Cleveland 6 41 14.6

Sheffield, Brightside and Hillsborough 6 41 14.6

Edinburgh South West Burgh Const 13 89 14.6

Feltham and Heston 9 62 14.5

Vale of Clwyd 9 62 14.5

Loughborough 11 76 14.5

North East Hertfordshire 7 49 14.3

North West Durham 5 35 14.3

Washington and Sunderland West 8 56 14.3

Workington 7 49 14.3

Aylesbury 10 71 14.1

Chippenham 8 57 14.0

Doncaster North 8 57 14.0

Epsom and Ewell 8 57 14.0

West Bromwich East 6 43 14.0

South Norfolk 5 36 13.9

Aldridge-Brownhills 4 29 13.8

Worthing West 11 80 13.8

Brentwood and Ongar 7 51 13.7

Calder Valley 7 51 13.7

Wansbeck 7 51 13.7

South West Wiltshire 9 66 13.6

Stirling 12 88 13.6

Northampton South 14 103 13.6

Kilmarnock and Loudoun 11 81 13.6

West Worcestershire 5 37 13.5

Wolverhampton North East 5 37 13.5

Mid Ulster 10 74 13.5

Christchurch 7 52 13.5

Knowsley 7 52 13.5

Filton and Bradley Stoke 9 67 13.4

Kingston upon Hull North 9 67 13.4

Belfast West 10 75 13.3

Cheltenham 12 91 13.2

West Dunbartonshire 10 76 13.2

Carmarthen West and South Pembrokeshire 8 61 13.1

East Devon 8 61 13.1

Clwyd South 3 23 13.0


Wakefield 12 92 13.0

Tamworth 7 54 13.0

Wentworth and Dearne 7 54 13.0

Oxford West and Abingdon 8 62 12.9

Richmond (Yorks) 9 70 12.9

Lancaster and Fleetwood 10 78 12.8

South West Bedfordshire 10 78 12.8

Taunton Deane 10 78 12.8

Wolverhampton South East 5 39 12.8

West Aberdeenshire and Kincardine 6 47 12.8

New Forest West 7 55 12.7

Nottingham South 18 142 12.7

Oldham West and Royton 9 71 12.7

Kettering 10 79 12.7

Dunfermline and West Fife 11 87 12.6

Bridgwater and West Somerset 7 56 12.5

Folkestone and Hythe 10 80 12.5

Hove 8 64 12.5

North Ayrshire and Arran 8 64 12.5

Nottingham North 6 48 12.5

Penistone and Stocksbridge 4 32 12.5

Rother Valley 5 40 12.5

The Cotswolds 6 48 12.5

Torfaen 7 56 12.5

Totnes 6 48 12.5

Glenrothes 9 73 12.3

Glasgow North West Burgh Const 7 57 12.3

Newark 7 57 12.3

Reading West 6 49 12.2

Rutland and Melton 6 49 12.2

West Bromwich West 6 49 12.2

Kingswood 5 41 12.2

Bracknell 9 74 12.2

Bury North 9 74 12.2

Houghton and Sunderland South 4 33 12.1

Islwyn 4 33 12.1

Middlesbrough 12 99 12.1

Newcastle-under-Lyme 8 66 12.1

North Down 8 66 12.1

Birmingham, Perry Barr 7 58 12.1

Plymouth, Sutton and Devonport 14 116 12.1

Rushcliffe 7 58 12.1

Arfon 6 50 12.0

Banff and Buchan 6 50 12.0

Stevenage 8 67 11.9


Maldon 5 42 11.9

North Durham 5 42 11.9

Somerton and Frome 5 42 11.9

Stoke-on-Trent North 5 42 11.9

Torridge and West Devon 5 42 11.9

Perth and North Perthshire 12 101 11.9

Dewsbury 7 59 11.9

Rochdale 7 59 11.9

Normanton, Pontefract and Castleford 11 93 11.8

Birmingham, Northfield 6 51 11.8

Bridgend 8 68 11.8

Coventry North West 4 34 11.8

Glasgow East Burgh Const 8 68 11.8

Moray 8 68 11.8

Selby and Ainsty 4 34 11.8

Glasgow Central Burgh Const 28 239 11.7

Thurrock 11 94 11.7

Kirkcaldy and Cowdenbeath 9 77 11.7

Corby 7 60 11.7

Derby North 5 43 11.6

Dulwich and West Norwood 5 43 11.6

Burnley 8 69 11.6

Chorley 8 69 11.6

Rotherham 8 69 11.6

Exeter 11 95 11.6

Hackney South and Shoreditch 6 52 11.5

Sheffield South East 10 87 11.5

North Devon 7 61 11.5

St. Helens South and Whiston 11 96 11.5

Ashford 8 70 11.4

Plymouth, Moor View 4 35 11.4

Preston 12 105 11.4

Aldershot 9 79 11.4

Linlithgow and East Falkirk 9 79 11.4

Cleethorpes 6 53 11.3

Esher and Walton 6 53 11.3

Newcastle upon Tyne East 6 53 11.3

Witney 6 53 11.3

Runnymede and Weybridge 7 62 11.3

Stratford-on-Avon 7 62 11.3

Walthamstow 7 62 11.3

Barrow and Furness 8 71 11.3

Alyn and Deeside 5 45 11.1

Birmingham, Edgbaston 7 63 11.1

Blackpool North and Cleveleys 6 54 11.1


Bromsgrove 5 45 11.1

Caerphilly 5 45 11.1

Fylde 6 54 11.1

Mole Valley 5 45 11.1

Morley and Outwood 6 54 11.1

North Dorset 5 45 11.1

South East Cambridgeshire 4 36 11.1

Warrington North 5 45 11.1

City of Chester 12 109 11.0

Fermanagh and South Tyrone 9 82 11.0

Milton Keynes South 8 73 11.0

City of Durham 7 64 10.9

Glasgow North East Burgh Const 6 55 10.9

Glasgow South Burgh Const 6 55 10.9

Gravesham 6 55 10.9

Kingston upon Hull East 6 55 10.9

South Down 6 55 10.9

Tiverton and Honiton 5 46 10.9

Wealden 5 46 10.9

Bristol East 4 37 10.8

Wolverhampton South West 8 74 10.8

Waveney 7 65 10.8

Halesowen and Rowley Regis 6 56 10.7

North East Derbyshire 3 28 10.7

North West Leicestershire 6 56 10.7

Torbay 9 84 10.7

Vale of Glamorgan 6 56 10.7

Surrey Heath 8 75 10.7

Bradford South 5 47 10.6

Cardiff North 5 47 10.6

Leigh 7 66 10.6

Livingston 9 85 10.6

Bristol South 6 57 10.5

Halifax 8 76 10.5

Wells 6 57 10.5

Falkirk 9 86 10.5

Eastleigh 7 67 10.4

Hertsmere 7 67 10.4

Ipswich 10 96 10.4

North West Cambridgeshire 5 48 10.4

York Outer 5 48 10.4

East Ham 8 77 10.4

Romford 8 77 10.4

Southport 8 77 10.4

Walsall South 8 77 10.4


Nottingham East 6 58 10.3

Doncaster Central 14 136 10.3

Delyn 4 39 10.3

Swansea East 4 39 10.3

Manchester Central 21 205 10.2

Luton South 9 88 10.2

Poole 9 88 10.2

Charnwood 5 49 10.2

Gordon 6 59 10.2

North East Cambridgeshire 6 59 10.2

Winchester 6 59 10.2

Sutton Coldfield 7 69 10.1

Paisley and Renfrewshire North 8 79 10.1

Salisbury 8 79 10.1

Aberdeen North Burgh Const 11 110 10.0

Brent North 8 80 10.0

Enfield North 5 50 10.0

Fareham 7 70 10.0

North Herefordshire 3 30 10.0

South Holland and The Deepings 5 50 10.0

South Staffordshire 2 20 10.0

Wokingham 5 50 10.0

Belfast East 6 60 10.0

Bristol West 15 151 9.9

Bournemouth West 9 91 9.9

Clacton 6 61 9.8

Harlow 6 61 9.8

North West Hampshire 6 61 9.8

Cumbernauld, Kilsyth and Kirkintilloch East 5 51 9.8

Edinburgh South Burgh Const 5 51 9.8

Wallasey 5 51 9.8

Swansea West 9 92 9.8

Stretford and Urmston 8 82 9.8

Weaver Vale 7 72 9.7

Bognor Regis and Littlehampton 6 62 9.7

Bolton South East 9 93 9.7

Bournemouth East 6 62 9.7

Hitchin and Harpenden 6 62 9.7

Jarrow 3 31 9.7

Copeland 5 52 9.6

Birmingham, Hall Green 4 42 9.5

Buckingham 2 21 9.5

Dundee West Burgh Const 8 84 9.5

Mid Norfolk 4 42 9.5

Sedgefield 4 42 9.5


Shipley 4 42 9.5

Thornbury and Yate 4 42 9.5

Maidstone and The Weald 7 74 9.5

Foyle 7 74 9.5

Banbury 8 85 9.4

Stafford 6 64 9.4

Bradford West 10 107 9.3

Aberdeen South Burgh Const 7 75 9.3

Worcester 7 75 9.3

Dwyfor Meirionnydd 4 43 9.3

Liverpool, Walton 4 43 9.3

Watford 8 87 9.2

Aberavon 3 33 9.1

Bury St. Edmunds 7 77 9.1

Garston and Halewood 5 55 9.1

Hereford and South Herefordshire 6 66 9.1

Mansfield 7 77 9.1

North East Somerset 4 44 9.1

North Thanet 4 44 9.1

Pontypridd 6 66 9.1

South Thanet 6 66 9.1

Stockton South 5 55 9.1

Shrewsbury and Atcham 6 67 9.0

Telford 5 56 8.9

Bury South 4 45 8.9

Elmet and Rothwell 4 45 8.9

Ilford North 4 45 8.9

Sherwood 4 45 8.9

Southend West 4 45 8.9

Bath 7 79 8.9

Coatbridge, Chryston and Bellshill Burgh Const 7 79 8.9

Stockton North 7 79 8.9

Cannock Chase 6 68 8.8

North Wiltshire 3 34 8.8

Nuneaton 6 68 8.8

Truro and Falmouth 6 68 8.8

Derby South 11 125 8.8

Leicester South 13 148 8.8

Sittingbourne and Sheppey 5 57 8.8

South Leicestershire 5 57 8.8

Central Ayrshire 7 80 8.8

Blackley and Broughton 4 46 8.7

Blackpool South 8 92 8.7

Orpington 6 69 8.7

East Yorkshire 5 58 8.6


Saffron Walden 5 58 8.6

Mitcham and Morden 3 35 8.6

Old Bexley and Sidcup 3 35 8.6

Carshalton and Wallington 4 47 8.5

East Hampshire 5 59 8.5

South Dorset 5 59 8.5

Chichester 6 71 8.5

Darlington 6 71 8.5

Wrexham 6 71 8.5

North Antrim 7 83 8.4

Birmingham, Erdington 5 60 8.3

Bosworth 5 60 8.3

Ealing, Southall 5 60 8.3

Maidenhead 4 48 8.3

South Basildon and East Thurrock 3 36 8.3

Yeovil 6 72 8.3

East Londonderry 7 84 8.3

Great Grimsby 6 73 8.2

Altrincham and Sale West 5 61 8.2

Bethnal Green and Bow 8 98 8.2

Cheadle 4 49 8.2

Kingston and Surbiton 10 123 8.1

Daventry 3 37 8.1

Merthyr Tydfil and Rhymney 3 37 8.1

Sutton and Cheam 6 74 8.1

Hyndburn 5 62 8.1

Beverley and Holderness 4 50 8.0

Dudley North 4 50 8.0

Barking 5 63 7.9

Bromley and Chislehurst 5 63 7.9

Basildon and Billericay 6 76 7.9

Cardiff West 3 38 7.9

Makerfield 3 38 7.9

Witham 3 38 7.9

Belfast North 6 76 7.9

Solihull 8 102 7.8

Huntingdon 6 77 7.8

Basingstoke 7 91 7.7

Berwickshire, Roxburgh and Selkirk 5 65 7.7

Broxbourne 5 65 7.7

Leeds East 5 65 7.7

Streatham 3 39 7.7

Worsley and Eccles South 3 39 7.7

South Antrim 5 65 7.7

Lanark and Hamilton East 7 92 7.6


Burton 6 79 7.6

Belfast South 12 158 7.6

Blaydon 5 66 7.6

St. Albans 5 66 7.6

Horsham 4 53 7.5

Lincoln 8 106 7.5

Morecambe and Lunesdale 4 53 7.5

Suffolk Coastal 4 53 7.5

Salford and Eccles 7 93 7.5

Leeds Central 16 213 7.5

Barnsley East 3 40 7.5

Dagenham and Rainham 3 40 7.5

Ludlow 3 40 7.5

Wellingborough 6 80 7.5

Inverclyde 5 67 7.5

Lagan Valley 5 67 7.5

Cambridge 8 108 7.4

Havant 4 54 7.4

Dudley South 5 68 7.4

Westmorland and Lonsdale 5 68 7.4

Braintree 3 41 7.3

Cardiff Central 10 137 7.3

Gateshead 4 55 7.3

Gedling 4 55 7.3

Pudsey 4 55 7.3

Reigate 4 55 7.3

Edinburgh West Burgh Const 6 83 7.2

Rochester and Strood 6 83 7.2

Stoke-on-Trent Central 6 83 7.2

Cardiff South and Penarth 4 56 7.1

Harwich and North Essex 3 42 7.1

North West Norfolk 5 70 7.1

South Ribble 4 56 7.1

Warley 3 42 7.1

Strangford 4 56 7.1

Milton Keynes North 9 127 7.1

Hastings and Rye 5 71 7.0

Ruislip, Northwood and Pinner 5 71 7.0

Tooting 5 71 7.0

Dundee East Burgh Const 4 57 7.0

Tynemouth 4 57 7.0

Wyre Forest 4 57 7.0

Bermondsey and Old Southwark 9 129 7.0

Sefton Central 3 43 7.0

Mid Sussex 5 72 6.9


Bolton North East 4 58 6.9

Central Suffolk and North Ipswich 2 29 6.9

Gillingham and Rainham 4 58 6.9

Harrow East 2 29 6.9

Leeds North West 4 58 6.9

Cities of London and Westminster 54 788 6.9

Lewes 3 44 6.8

Lewisham East 3 44 6.8

Stroud 3 44 6.8

Walsall North 3 44 6.8

Ashton-under-Lyne 5 74 6.8

Kensington 9 134 6.7

Liverpool, Riverside 11 164 6.7

Harrogate and Knaresborough 6 90 6.7

Liverpool, West Derby 2 30 6.7

South West Norfolk 3 45 6.7

Edinburgh North and Leith Burgh Const 10 151 6.6

Newbury 5 76 6.6

Airdrie and Shotts 4 61 6.6

Beaconsfield 4 61 6.6

Weston-Super-Mare 4 61 6.6

Gloucester 6 92 6.5

Lichfield 3 46 6.5

New Forest East 3 46 6.5

Twickenham 3 46 6.5

Bassetlaw 5 77 6.5

Croydon North 5 77 6.5

Bedford 6 93 6.5

Stockport 6 93 6.5

Southampton, Itchen 7 109 6.4

Amber Valley 3 47 6.4

Brigg and Goole 3 47 6.4

Ellesmere Port and Neston 3 47 6.4

West Ham 6 95 6.3

Bexhill and Battle 3 48 6.3

Broxtowe 3 48 6.3

Eltham 3 48 6.3

Henley 3 48 6.3

Newport East 2 32 6.3

Thirsk and Malton 3 48 6.3

Wirral West 2 32 6.3

Birmingham, Ladywood 13 209 6.2

Poplar and Limehouse 7 113 6.2

Colchester 6 97 6.2

Peterborough 6 97 6.2


Harborough 4 65 6.2

Westminster North 4 65 6.2

Woking 4 65 6.2

Reading East 7 114 6.1

Birmingham, Selly Oak 3 49 6.1

Ealing Central and Acton 6 98 6.1

East Renfrewshire 3 49 6.1

Heywood and Middleton 3 49 6.1

Rayleigh and Wickford 3 49 6.1

Rochford and Southend East 6 98 6.1

Canterbury 5 82 6.1

Bootle 4 66 6.1

Chesterfield 5 83 6.0

Southampton, Test 4 67 6.0

North East Fife 3 51 5.9

Redditch 3 51 5.9

South East Cornwall 2 34 5.9

Stalybridge and Hyde 3 51 5.9

Wimbledon 4 68 5.9

York Central 6 102 5.9

Portsmouth South 6 103 5.8

Greenwich and Woolwich 5 86 5.8

Uxbridge and South Ruislip 4 69 5.8

Castle Point 3 52 5.8

Newcastle upon Tyne Central 9 156 5.8

South West Hertfordshire 3 52 5.8

Edinburgh East Burgh Const 5 87 5.7

Beckenham 2 35 5.7

Meon Valley 3 53 5.7

Coventry South 7 126 5.6

Slough 5 91 5.5

Lewisham, Deptford 4 73 5.5

Ashfield 3 55 5.5

East Lothian 3 55 5.5

Richmond Park 3 55 5.5

Harrow West 5 92 5.4

Erith and Thamesmead 2 37 5.4

Hendon 4 74 5.4

Leeds North East 2 37 5.4

Crewe and Nantwich 5 94 5.3

Crawley 6 113 5.3

Grantham and Stamford 4 76 5.3

Hexham 2 38 5.3

North Somerset 2 38 5.3

Wirral South 2 38 5.3


Batley and Spen 3 58 5.2

West Suffolk 3 58 5.2

Aberconwy 2 39 5.1

Derbyshire Dales 2 39 5.1

Rossendale and Darwen 2 39 5.1

Welwyn Hatfield 4 78 5.1

Oxford East 6 118 5.1

Rutherglen and Hamilton West Burgh Const 3 59 5.1

Spelthorne 3 59 5.1

Bristol North West 2 40 5.0

Carlisle 4 80 5.0

Hackney North and Stoke Newington 3 60 5.0

North Shropshire 3 60 5.0

South Cambridgeshire 1 20 5.0

North Swindon 2 41 4.9

Norwich South 6 123 4.9

Angus 3 63 4.8

High Peak 2 42 4.8

Rugby 3 64 4.7

Wantage 3 64 4.7

Chingford and Woodford Green 2 43 4.7

Dartford 4 86 4.7

Hazel Grove 2 43 4.7

Scunthorpe 3 65 4.6

Chelmsford 4 87 4.6

Blackburn 4 88 4.5

Epping Forest 2 44 4.5

Birkenhead 3 67 4.5

East Surrey 2 45 4.4

Hornsey and Wood Green 4 90 4.4

Inverness, Nairn, Badenoch and Strathspey 4 90 4.4

Newton Abbot 2 45 4.4

Bexleyheath and Crayford 3 68 4.4

Hertford and Stortford 3 69 4.3

Huddersfield 4 93 4.3

Wycombe 3 70 4.3

Islington North 2 47 4.3

Mid Worcestershire 2 47 4.3

Ilford South 3 71 4.2

Northampton North 3 71 4.2

Croydon Central 4 95 4.2

Ceredigion 2 48 4.2

Eastbourne 3 72 4.2

Hemel Hempstead 3 72 4.2

Manchester, Gorton 2 48 4.2


Monmouth 2 48 4.2

Tottenham 2 48 4.2

Sheffield Central 7 169 4.1

Barnsley Central 3 73 4.1

Macclesfield 2 49 4.1

Stoke-on-Trent South 2 49 4.1

Leicester East 2 50 4.0

St. Helens North 1 25 4.0

Hammersmith 5 126 4.0

Congleton 2 51 3.9

South Swindon 4 102 3.9

South West Surrey 2 51 3.9

East Antrim 2 51 3.9

Vauxhall 3 77 3.9

Wigan 3 77 3.9

Birmingham, Yardley 2 52 3.8

Brentford and Isleworth 4 105 3.8

East Dunbartonshire 2 53 3.8

Edmonton 2 53 3.8

Camberwell and Peckham 3 80 3.8

Finchley and Golders Green 3 80 3.8

Skipton and Ripon 2 54 3.7

Tonbridge and Malling 2 54 3.7

Halton 2 56 3.6

Staffordshire Moorlands 1 28 3.6

Guildford 3 85 3.5

West Lancashire 2 57 3.5

Chelsea and Fulham 3 86 3.5

Warrington South 3 89 3.4

Colne Valley 1 30 3.3

Enfield, Southgate 2 61 3.3

Keighley 2 61 3.3

Liverpool, Wavertree 2 61 3.3

Islington South and Finsbury 4 129 3.1

Warwick and Leamington 2 67 3.0

Manchester, Withington 2 69 2.9

Paisley and Renfrewshire South 2 69 2.9

Clwyd West 1 35 2.9

Croydon South 1 35 2.9

Glasgow North Burgh Const 2 70 2.9

Leyton and Wanstead 1 35 2.9

Montgomeryshire 1 35 2.9

Chesham and Amersham 1 37 2.7

Newport West 2 74 2.7

Oldham East and Saddleworth 1 37 2.7


Brighton, Pavilion 3 112 2.7

Denton and Reddish 1 38 2.6

North Warwickshire 1 38 2.6

Chipping Barnet 1 39 2.6

Sheffield, Heeley 1 45 2.2

Lewisham West and Penge 1 46 2.2

West Dorset 1 46 2.2

Upper Bann 2 92 2.2

Glasgow South West Burgh Const 1 50 2.0

Pendle 1 50 2.0

Holborn and St. Pancras 4 207 1.9

Bradford East 1 54 1.9

Gosport 1 54 1.9

Hornchurch and Upminster 1 55 1.8

Battersea 1 62 1.6

Coventry North East 1 62 1.6

Putney 1 62 1.6

Portsmouth North 1 64 1.6

Tunbridge Wells 1 64 1.6

Hampstead and Kilburn 1 82 1.2

Arundel and South Downs 0 33 0.0

Chatham and Aylesford 0 26 0.0

Ealing North 0 46 0.0

Gower 0 24 0.0

Sevenoaks 0 44 0.0

South Suffolk 0 37 0.0

3932 42139

36 Access to cash machines and basic bank accounts

Formal Minutes

Thursday 9 August 2012

Members present:

Mr Andrew Tyrie, in the Chair

Mark Garnier Andrea Leadsom Rt Hon Pat Mcfadden

John MannGeorge Mudie David Ruffley

Draft Report (Access to cash machines for basic bank account holders), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 39 read and agreed to.

A Paper was appended to the Report.

Resolved, That the Report be the Third Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

[Adjourned to a day and time to be fixed by the Chairman

Access to cash machines and basic bank accounts 37

List of printed written evidence

1 Royal Bank of Scotland Ev 1

2 Lloyds TSB Ev 4

38 Access to cash machines and basic bank accounts

List of Reports from the Committee during the current Parliament

Session 2012–13

First Report Financial Services Bill HC 161

Second Report Fixing LIBOR: some preliminary findings HC 481

House of Commons Treasury Committee - United Kingdom

Documents

Transcript of House of Commons Treasury Committee - United Kingdom