The All Party Parliamentary Group on Debt and Personal Finance was established in 2003 to provide a forum for MPs and peers to discuss debt and personal finance issues, to monitor legislative developments in this area, and to provide an opportunity for liaison between Members and organisations with an interest in these issues.
The Group is chaired by Yvonne Fovargue MP and the other officers include: Nicholas Dakin MP, Mike Weir MP, Lorely Burt MP, and Tracey Crouch MP. Recent meetings have covered issues such as, future funding for the free debt advice sector, the regulation of high cost credit and fee charging debt management companies, fuel debt and financial inclusion.
The Secretariat for the Group is provided by the Citizens Advice Public Affairs team, and funding for the Group’s activities is provided by the subscriptions levied on affiliate members.
On Tuesday 10 July 2012 the APPG for Debt and Personal Finance hosted a breakfast seminar on the topic of ‘Access to Cash’.
Opening the session, Chair Yvonne Fovargue MP opened the seminar by praising Citizens Advice report Access to cash – don’t bank on it, launched at the event, noting the problems encountered by basic bank account customers who could only access cash from the cash machines of their banking provider.
Director of Policy and Advocacy at Citizens Advice Teresa Perchard said cash remained highly popular and customers expected to be able to access their cash from any cash machine without having to pay for this.
There had been a decade of progress for financial inclusion she said, referring to the development of the free cash machine network and the provision of basic bank accounts. However, in 2011, RBS and Natwest withdrew access to other banks cash machines for their basic bank account customers. This had a significant impact on some groups she said, notably those in rural areas and the disabled.
Looking to the future, Ms Perchard argued that the UK could be at the start of a slippery slope if more banks restricted access to cash for their basic bank account customers, or even their current account customers in less densely populated areas and the LINK network was at an important turning point
The Co-operative Bank’s Head of Payments, David Fawell welcomed the report pointing out that the Co-operative bank provided a disproportionate number of basic bank accounts compared to its market share and there was a need for industry-wide provision of basic bank accounts.
He noted that independent (non bank) cash machine providers provided one quarter of UK free cash machines, particularly in suburban areas and queried whether these would remain viable if banks removed free access to these machines for their customers.
The Post Office offered some service, but this was not 24/7 and customers overwhelmingly preferred cash machines, he added.
Association of British Credit Unions (ABCUL) Chief Executive Mark Lyonette stated that while free cash machines were the core issue, that issues such as pre-paid cards also needed to be considered when considering access to cash for vulnerable or low income consumers. He noted that pre-paid card users were still charged at free cash points and users are unable to get cashback in shops.
He highlighted the challenges posed by the introduction of Universal Credit, which would mean people were required to have a bank account to access their cash but would have no automatic right to a bank account. There could be problems if people received their benefits on to pre-paid cards, which were not protected deposits like bank accounts and there was a danger of creating the next Fairpak.
Credit unions were not currently mainstreamed in the UK, Mr Lyonette acknowledged. However, over the last five years, credit unions had introduced current accounts and pre-paid cards, he added.
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