Barclays has rowed back on controversial plans to stop cash withdrawals from post offices, after it came under fire from an influential committee of MPs.
Politicians were set to urge Barclays to reverse its decision in a session of the Business, Energy and Industrial Strategy (Beis) Committee tomorrow, threatening to grill the lender’s bosses in Westminster over the potential impact of the move.
In prepared statements, the committee called Barclays’ withdrawal “a highly retrograde step which hurts vulnerable customers”. Committee chair Rachel Reeves had slammed the move as “petty penny-pinching”.
Barclays said this evening its decision to pull withdrawals had “provoked a great deal of public and private debate”.
“Ultimately we have been persuaded to rethink our proposals by the argument that our full participation in the Post Office Banking Framework is crucial at this point to the viability of the Post Office network,” it said.
“Whilst we have concerns regarding the sustainability of relying on this model in the longer term, and want to work with government and others to address the problems inherent in it, we recognise that the Post Office is a network valued by many communities in the UK today.”
The move had sparked anger from a number of consumer groups, with Which describing it as a “shocking decision” by the bank.
Barclays will now maintain a full service proposition in the Post Office, including cash withdrawals using a debit card, for the next three years.
Reeves said this evening: “Barclays have finally read the writing on the wall and caved to public and political pressure to dump this woefully misguided policy.”
“The Beis Committee has called out this egregious behaviour towards customers and we welcome the fact that Barclays has belatedly realised the game is up on this policy,” she added.
Barclays UK chief executive Matt Hammerstein and representatives from the Post Office and Which were set to attend a follow-up committee session early next month. A committee spokesperson said it will consider next week whether this session will still go ahead.
Minister for financial inclusion Guy Opperman said: “Financial inclusion requires access to cash. I am delighted Barclays have changed their original outrageous decision after multiple representations.
“Their original actions brought shame to the company and completely alienated rural communities. A wise U-turn.”
The Beis committee has also urged the government to come forward with a long-term commitment to support the Post Office network, asking for it to “extend the Network Subsidy Payment beyond 2021 to give long term certainty for sub-postmasters and retailers”.
Gareth Shaw, head of money at Which, said: “Barclays’ decision to bow to public pressure and reverse this move will be a massive relief for its customers, who have seen almost 500 high street branches close over the last four years.”
“The industry cannot be relied on to prevent people being stripped of access to cash and vital financial services, so the government must urgently intervene with legislation that protects cash for as long as it is needed.”