John Robertson (Glasgow, North-West) (Lab): It is a great pleasure to take part in today’s debate.

I start by congratulating my right hon. Friend the Member for West Dunbartonshire (Mr. McFall)—my neighbour—on the contribution that his Committee has made. The document is a lengthy one. A great deal of evidence was taken, but I know that a lot more still has to be done.

I got involved with the issue of cash machine charging after a constituent came to one of my surgeries. He explained that he had received £41 of benefit money and went round to the old HSBC hole in the wall to get his money out. He found that it was a Cardpoint facility, but he did not realise what that meant. He put his card into the machine and was told that he was to be charged £1.75 to extract his money, only to find out that he could take out only £30 because he had to extract his money in multiples of £10. By the time he had paid the £1.75 and withdrawn his £30, he could not get access to the other £9 or so. He would not get access to it until he received his next benefit payment, and even then it would have taken him about six months to get his own money out of that machine—until he got the balance down to almost nil.

Such a situation is not right and is not fair to the people who were mentioned by my right hon. Friend the Member for Oxford, East (Mr. Smith); the fee-charging machines seem to be put into deprived areas. If we ask the companies in question, they say that that is not true. They also tell us that they do not make much money on the machines. If my recollection is correct, the estimated profit from cash machines this year is about £500 million.

Let us consider that in comparison with the major banks, which will have a profit—a net profit; it is not running costs—in excess of £30 billion. Is it unfair to ask companies to foot the bill by not charging customers for getting, as my right hon. Friend the Member for Oxford, East said, their own money out?

There has been foul play. The people in my constituency have been ill-treated and the city of Glasgow has been unfairly treated. It contains about six of the most deprived constituencies in the country. In the area of the highest deprivation, the fee-charging cash machines outweigh the free ones by 2:1. The free machines are all in areas with high shopping value, shopping centres or retail parks. The expensive machines are in the corner shops, which our constituents have to go to because they cannot afford to get the bus to the city centre or to the retail park on the outskirts of the city where they can buy cheaper food.

It is not true what some banks are telling me—that they put in such cash machines because they are providing a service in an area where there are no cash machines. In the west end of Glasgow, probably one of the most affluent areas in the country never mind in the west of Scotland, there is a road called Byres road. It is well known to people who have been to Glasgow; they will probably have had an evening out there for a few libations and possibly a curry as well. It is a high-student shopping area, which has many banks and building societies, and therefore lots of cash machines, not one of which charges. Yet, less than a mile up the road is probably one of the more deprived areas, Maryhill. It has a cash machine that charges.

The banks tell me that they do not get rid of their free cash machines and that they are putting in more by the day. The other day I had an interesting discussion with a representative of the Royal Bank of Scotland who came to see me in my office. He told me that it had bought a company called Hanco, which is one of the biggest fee-charging cash machine operators in the country. When RBS bought the company, about 800 cash machines were involved. Today it has about 7,000 fee-charging cash machines in this country.

That has happened in less than a year and a half. I started campaigning for free cash machines at about the same time. I find it outrageous that the company has invested that kind of money, yet it tells me that it does not make much money on the machines. If it does not make much money and it is a bit of a bother having them, why has it obtained an extra 6,200 cash machines in the country to fight off the competition? If there is no money to be made, what competition are we talking about? I believe that RBS made £6 billion profit last year, yet it cannot afford to run free cash machines.

There is a real problem. The Minister and I have had discussions about it. He has been helpful, and I commend him on the work that he is doing. He promised me that he would examine the issues if we raised them with him. I told him that there was evidence throughout the country on this issue. My right hon. Friend the Member for Oxford, East has produced it, and my right hon. Friend the Member for West Dunbartonshire has quoted examples in areas of London. We know from Glasgow that fee-charging cash machines are not being put in areas that have high employment, lots of money and nice big houses, because if they were, people who lived in such places would jump into their cars and drive to a free machine.

Helen Goodman (Bishop Auckland) (Lab): This is also a serious problem in rural areas, which have suffered many bank branch closures. People are even more dependent on cash machines in such areas. Does my hon. Friend agree that the needs of rural areas should be taken into account in future examinations of financial exclusion?

John Robertson : My hon. Friend makes a good point. I have tabled early-day motions on the subject. Charging cash machines are in areas of high deprivation and areas where the elderly live. Knightswood and Blairdardie in my constituency have the highest concentration of over-60s in Europe, yet there are no free cash machines in the area. There is one on the outskirts of Glasgow, and people should go to Anniesland Cross and hear about some of the feelings that prevail there. Fee-paying machines are near an old person’s home and the corner shops.

Reference has been made to the Post Office, and I have a criticism of the Government. When payment books were taken away, our benefit receivers and the elderly were forced to change to a system in which money was obtained by cards. We made it difficult for people to obtain Post Office cards, but banks made it easy for them to take out bank cards. Banks have told me how well they did out of a lot of people.

Depending on whether we listen to Link or we listen to Alliance and Leicester, Alliance and Leicester bought between 800 and 1,200 cash machines in post offices. Of them, 400 to 800—depending on which company is to be believed—are fee-charging cash machines. Let us consider the situation of elderly people. We told them that they would be better off and that it would be easier for them to get their money. Yes, it is much easier for them to get their money, but it is also much easier for them to spend it before they even receive it. Did we really set up the system so that when pensioners withdraw perhaps £20 or £30 from their pension, we ask them to pay £1.75 each time they use a machine? That is not right. Those elderly people have worked all their lives for this country, yet we turn round at the time when they should receive their money from machines for nothing, and charge them. It is a disgrace. Companies such as the Alliance and Leicester must take a real look at themselves because they have deliberately cashed in on elderly people.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) talked about rural areas. They have the same problem because sub-post offices have fee-paying cash machines. People could withdraw their money for nothing before we changed the system, yet we have—through no fault of our own—assisted companies to make money from those who can least afford it. I accept that I have had a bit of a rant, but I feel strongly about the subject, as do many of my constituents.

I wish now to say a few words about the report and the conclusions of my right hon. Friend the Member for West Dunbartonshire. I am pleased that the recommendations in my submission to the Committee were similar to those that my right hon. Friend made in the report. We must seriously examine the growth in the number of charging machines. I have also received letters from Link and the National Association of Citizens Advice Bureaux. Faced with the same statistics and questions, it is funny that two different organisations have two different answers. Link did not look too bad, with about 13 per cent. of machines being a problem that needed to be investigated. However, Citizens Advice stated that 50 per cent. of their people had trouble understanding how to operate the machines. That is not right.

Nationwide put forward the excellent idea of big red and green stickers that can be clearly seen. I received a letter from the Halifax Bank of Scotland in which it said that it would be willing to take such action and recommended it. The Royal Bank of Scotland has said the same. If those banks, which are particularly big in Scotland, can agree, why have we reached the stage at which five companies within the Link set-up suddenly say that they do not want to operate in such a way? We must ask ourselves why they do not want to take such action. Why do they not want people to understand how their machines work?

Mr. McFall : I mentioned further transparency in respect of the five companies at the meeting of Link on 12 December 2004, at which the green and red stickers for HBOS and Nationwide were discussed. They decided not to proceed with such action. We do not know how many members voted against such a decision because the meeting was secret. At the invitation of the director of Link, I am writing to those Link companies to find out what happened on an individual basis, and I shall share that information with my hon. Friend.

John Robertson : I thank my right hon. Friend. It makes matters worse when such companies can behave in such a way. I would not mind, but this is our money. It is not their money; it is ours. Not only do they use our money to make more money, but they charge people who cannot afford it to withdraw their own money. If a bank said to me, “We think that our profits might go down slightly, but I would like to use your money to ensure that those people do not have to pay a charge”, I would say, “Go ahead. I am happy with that. If you make only £29.5 billion profit rather than £30 billion, I do not think that too many shareholders will be upset about it.”

Mr. Love : Will my hon. Friend congratulate Citizens Advice on setting up the ATM watch that it will be carrying out later this year? Let us hope that it will illuminate matters and inform people about what is happening throughout the country and that, as a result of that exposure, we will obtain the changes that we want.

John Robertson : I thank my hon. Friend for that intervention. Now is an opportune moment to introduce the briefing that I received from Citizens Advice. I believe that what it says is right. I refer to its four bullet points, the first one of which is that

“ATM charges should be restricted and possibly capped”.

That has been mentioned by a few colleagues. The other bullet points are that

“All non-financial transactions should remain free . . . Machines should display a clear and prominent warning of charges before a card is inserted. Citizens Advice agrees with Nationwide Building Society that there should be a clear distinction between fee-charging and free cash machines by means of red and green signs . . . All current account holders should be able to withdraw cash over the counter at Post Offices without having to pay. We consider that Post Office Ltd should become a member of Link to enable this to happen.”

That does not seem much to ask. Such a system will not cost a great deal of money, but it will ensure that those of us who can least afford it, such as my constituent who only gets £30 of his benefit of £41, will be better looked after than we are at present. I do not want my elderly constituents to go to the corner shop or the sub-post office to collect their pension in the knowledge that it will cost them £1.75 each time they go. It is as though they are taxed for being old, and that is not on.

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