MPs are to examine the impact of proposed changes to funding of free bank machines in Scotland.

LINK, the network responsible for 82% of all UK cash machine withdrawals, has announced a reduction of fees from 25p to 20p per withdrawal.

The firm said this will rebalance the ATM network and has committed to protecting access to free machines but opponents, including the Federation of Small Businesses, warn it could lead to the closure of thousands of bank machines.

Labour MP Ged Killen is calling for a full market review of the decision which he claims could threaten the viability of 30,000 – 45% – of the UK’s free-to-use ATMs.

Westminster’s Scottish Affairs Committee will now hold a one-off session to examine the cash machine network in Scotland.

It will look at the likely impact of the proposed changes on individuals, communities and businesses as well as on banks and independent ATM providers.

The committee will also examine mitigation measures for rural communities, and the adequacy of those put forward by LINK, as well as the effectiveness of the firm’s consultation and decision processes.

Committee chairman Pete Wishart said: “During our investigation over plans to close RBS branches, we noticed how important it was for local communities to have 24-hour access to cash that ATMs provide.

“The changes announced by LINK ostensibly contain measures designed to protect rural communities and low-income areas.

“However, there is a concern that they are designed to reduce costs to the banking sector and won’t meet the needs of consumers.

“We are holding this session to understand how these decisions were arrived at and what the real impact will be on access to this vital service.”

Mr Killen welcomed the committee announcement, saying: “This will be the first major investigation into how LINK’s decision will impact on the ATM network.”

He believes Scotland will be one of the areas worst affected by the changes and that poor and vulnerable people will face the greatest challenges of having to travel to a bank machine or use one that charges.

He added: “There are currently more free ATMs in one corridor in the House of Commons than on all of Cambuslang High Street in my constituency.

“LINK’s changes threaten to make this situation a common sight across Scotland.”

He plans to introduce a bill to protect free ATMs if strong enough action is not forthcoming.

LINK chief executive officer John Howells said: “We don’t believe that any consumer should have to pay to access their own cash. Even as more consumers turn to alternative payment methods, it’s vital that all communities have access to a free-to-use ATM.

“Our recent changes are about improving the ATM network and making sure they’re in the right places where people need them, not concentrated in busy high streets in city centres.

“We are strengthening our financial inclusion programme so that we can protect and enhance the ATM network, especially in remote and less-well off areas.”