THE cash machine turns 40 today but any celebrations should be muted. The convenience they've given us has come at a huge price: #500million a year and 130,000 jobs.

ATMs have come a long way since June 27, 1967, when On The Buses star Reg Varney withdrew #10 from Barclays' branch in Enfield to became the first person to use a hole in the wall.

Back then they were touted as a great way to beat queues and provide a simple service quickly.

And it is difficult to deny that they have proved a huge hit with the British public.

But as their popularity has grown, banks have come to exploit the machines as an easy way of extracting more profits from customers.

Their rise has let banks cut costs by axing staff, closing branches and charging us for taking out our money.

And those who have suffered most are people on lower incomes or those who live in remote areas.

The financial cost

IT took until 1999 - a wait of 32 years - for banks to realise they could charge customers for taking out their own cash.

But since then they've been very busy making up for lost time and revenue. In 2001, three million withdrawals were made from fee-charging machines.

That had risen to nine million last year.

There are currently 25,095 fee-charging machines in the UK, and they can cost up to #10 for a withdrawal - although the average cost is #1.50.

They will rake in #250million this year, having made #200m a year in 2006 and 2005, #140m in 2004 and #69m in 2003. By the end of 2007 more than #1bn will have been taken out of our pockets by these machines.

Nationwide has led the campaign against fee-charging ATMs.

Without the building society's intervention these machines would not have clear labelling showing customers exactly how much they would be charged.

And the government would not have launched its initiative to get hundreds of free holes in the wall sited in low-income communities.

Nonetheless, the companies running the fee-chargers are booming.

The biggest, Paypoint, saw its profit rise a third last year to #25m, while rivals Cashbox - which is currently installing machines in many of Marston's 1,700 pubs - has also seen turnover and margins leap.

And it's not just fee-charging machines which cost us. Credit card companies have also done very well out of our ATM-frenzy.

They charge around 25 per cent on every cash withdrawal and a minimum of #2. That helps them net #250m a year, before we even pay interest on the money.

The human cost

THE Campaign for Community Banking Services and trade union Unite believe that each cash machine does the job of three bank staff.

Banking currently employs 358,112 staff, compared to 220,000 in 1967. But, bank and building society deposits have increased from #19bn to #800bn. In 1967, there were 12 million current accounts, now there are 130 million.

So, if each machine has replaced three cashiers, and fee-charging machines have replaced one, 130,000 jobs have gone.

Nationwide, Britain's biggest building society claims this has freed staff to deal with more customers face-to-face.

Unite argues that in fact staff are not providing a basic service, but are pressured to sell other products. "Banks have used this as a way to make more money from customers," said a spokesman.

It's little wonder then that the big five banks - HSBC, Halifax Bank of Scotland, RBS NatWest, Lloyds TSB and Barclays - made #85 a second last year.

Campaigners argue that as well as jobs those living in rural areas have been made to pay for the rise of the machines.

Derek French, from the Campaign for Community Banking Services, estimates that 850 communities have lost all bank branches, and a further 1,100 have access to just one.

The whole truth about holes in the wall

THERE are 60,468 machines in Britain today, more than 25,000 of which charge. We withdraw more money per person than any of our European neighbours - taking out #5,700 every second. In 1996, withdrawals topped 1.6 billion, last year it was 2.8bn for #180bn.

According to payments association Apacs, the average Brit takes out #66 and uses a cash machine 78 times a year.