Banks told to 'give bank account to everyone'

Banks are to be put under an obligation to provide a free basic account to every UK citizen under new measures expected to be unveiled by Chancellor Alistair Darling in the Budget.

Mr Darling has indicated he believes the inability to access a bank account can prevent some of Britain's poorest people from joining mainstream society by making it more difficult for them to receive pay cheques and pay bills.

Not having an account can also make life more difficult for poor people, as they are unable to buy cheaper goods online or benefit from the reduced rates offered by utility companies to customers paying by direct debit.

Recent figures from the Treasury's Financial Inclusion Taskforce showed that 1.75 million adults have no access to basic bank accounts.

Mr Darling is expected to unveil plans for a universal legally-enforceable obligation on British banks to provide a basic current account to every adult UK citizen. Anyone turned down for an account will be able to mount an appeal.

Children's charity Barnardo's warmly welcomed the news. Chief executive Martin Narey said: "The UK's poorest families are trapped in a cycle of poverty and debt.

"Already with too little money, they pay more for utilities because they cannot pay by direct debit. With no facility for saving and no access to affordable credit they are driven toward unaffordable doorstep lenders. This legislation could be an important landmark in easing family poverty."