My honourable friend the Economic Secretary to the Treasury (Ed Balls) has made the following Written Ministerial Statement.

Following the March 2005 Treasury Committee report on ATM (automatic teller machine) charging, the Treasury invited the chairman of the Treasury Committee, the right honourable John McFall MP, to chair a working group on ATMs, including banks, independent ATM operators and consumer groups, to take forward work on key issues. The working group published a report on 13 December 2006.

The working group announced an agreement to provide over 600 new free cash machines across 1,707 target low-income areas that it identified as lacking convenient access to these machines. To achieve this, a market-based financial incentive—known as a “financial inclusion premium” would be introduced, to encourage ATM operators to place or retain free ATMs in deprived areas. The working group also agreed to implement improved transparency rules for charging cash machines.

The Government are pleased to report that, just six months since the publication of this report, industry has made excellent progress towards the goal of placing over 600 non-charging machines in low-income areas across the UK, with more than 1 million individuals on low incomes standing to benefit.

As of 15 June 2007, sites for 471 of the 600 new ATMs required have been successfully identified. Of these, 127 new free machines are already issuing cash to the public, with a further 344 confirmed ATM sites under contract to have a free ATM installed, most of them before the end of this year.

The financial inclusion premium was introduced on 1 March 2007. Operators of the 127 newly live cash machines are already receiving this premium from cardholders' banks and building societies. In addition, a further 100 ATMs that existed prior to the working group announcement are benefiting from this premium, given their special status as the “last ATM in town”.

Banks, building societies and independent ATM operators have all contributed new free-to-use cash machines, with independent ATM operators having provided or in the process of supplying 41 per cent of the confirmed new non-charging ATMs. The UK ATM network, LINK, is continuing to work with its member banks and ATM operators to identify suitable sites in the remaining target areas, co-ordinating with Members of Parliament, local authorities, consumer councils and landlords.

This work is already having an important effect on financial inclusion, particularly on the ability of low-income customers to access and manage their accounts. According to data from LINK, the new free ATMs in operation are enabling over 260,000 residents in the target low-income areas to access cash more conveniently. A further 822,000 residents in deprived areas will stand to benefit from the confirmed additional ATMs that are being supplied across the UK over the coming months.

For all cash machines that charge users, operators are continuing work on signage to make it absolutely clear that a charge will be applied when withdrawing cash, so that customers can see at a glance whether a machine is free or charging.

The Government are encouraged by the concrete progress achieved and would like to take this opportunity to thank all those involved in extending free access to cash to those who need it the most. Today John McFall MP and I have written to all MPs thanking them for their support and urging them to continue to identify sites for the remaining 129 free cash machines. The Government look forward to a further update from the industry on its work to deliver against the ATM working group recommendations before the end of this year.

Full details about the progress made are available on the LINK internet website at www.link.co.uk/atm/access_to_cash_progress/index.html.