Parliament Debates Keep Cash Petition

For many of us following the Government’s push towards a Central Bank Digital Currency (CBDC)/Cashless Society, scrutiny of all Parliamentary Debates on this issue is vital.

I have covered a previous Parliamentary debate “make it unlawful for shops to refuse cash”.. Read here 

For those of you who have followed my work, you will be aware that I usually give an analysis at the end of each piece, but in this instance I have decided to reverse this and lead with my analysis.  

It will then be up to the reader to decide whether you agree or disagree with that analysis.

Author’s Analysis

So, we heard all the right noises emanating from MPs mouths, encouraging you may think. [Which may in part be due to the numbers in the public gallery – have I become too cynical?]

But drilling down on some of the salient comments you realise that all is not as it first appears:-   

• The wholesale distribution of cash is too costly [why?], we don’t know because the Bank of England does not update its minutes [speaks volumes]
• The Pandemic accelerated the digitisation of payment services [coincidence?]
• Financial Services & Markets Bill will take powers and allow the FCA for the first time to regulate access to cash [alarm bells?].
• Can we trust Regulators?

But it was not all bad news:-

• The Bank of England noted that banknotes in circulation remain close to a historic high, 60% of the population are holding more cash.
• Data collected by the Post Office shows that the use of cash has risen in recent months.
• The European Central Bank found that cash remained the most frequent method of payment in 2022.
• 95% of respondents to the Petitions Committee survey stated that they preferred to use cash over other means of payment. 

Could this be because grassroots leafleting campaigns across the country are waking people up fast to what the loss of cash/a cashless society really means?  

Remember Cash is King, if you don’t use it you lose it!….….     

Read here 

Now over to a synopsis of the Parliamentary debate…..

Under discussion were 2 e-petitions relating to the acceptance of cash, attracting more than 58,500 signatures.  It was acknowledged that this is an issue of interest and great concern to many across the UK.

• • Not everyone wants a digital trail and others simply cannot pay by card.

• The petitioners expressed concern about cashless payments creating an enforced dependency on banks and a threat to privacy as people cannot make anonymous payments.

• If we wish to uphold freedom of choice, the right to privacy and independence, it is imperative that we protect the use of cash.

Research suggests that 10 million people would struggle to cope in a cashless society. 

The debate lasted over 1½ hours, it was encouraging to note that there were a large number of attendees in the public gallery, putting MPs under pressure.

Summary 

I will outline the most important points, adding links to the full debate at the end of the article for those of a stronger constitution.

Martin Day, MP for Linlithgow and East Falkirk – (SNP)

“We must protect the individual’s right to use cash in all physical transactions. There are dangerous political implications with going cashless, as instances of banks and financial service providers closing accounts for political reasons are not unprecedented and are clearly at odds with liberal society’s cornerstone of freedom of belief.”

95% of respondents to the Petitions Committee survey stated that they preferred to use cash over other means of payment. 

The 2022 cash census showed that 96% of people withdraw cash at some frequency, with 83% having cash either in their wallet or at home.  

Figures from the Financial Conduct Authority’s 2022 “Financial Lives” survey showed that 6% of adults in the UK had used cash to pay for everything, or most things. 

Although the covid-19 pandemic undoubtedly affected payment habits, there has been a sustained recovery and a stabilisation in the use of cash, as noted by the Bank of England. 

The Bank also noted that the value of bank notes in circulation remains close to a historic high, reflecting the fact that up to 60% of the population are holding more cash as a store of value.

A benefit for retailers is that unlike card schemes, for which they must pay set-up and transaction fees to providers, with cash every penny goes to them.  Another benefit is the role that cash can play when electronic payment methods fail.

Research from Which has shown that 82% of Scottish consumers are likely to keep cash in case electronic payments are down.

Patricia Gibson – MP for North Ayrshire and Arran – (SNP) 

My hon. Friend is making a powerful case about the importance of having the choice to use cash. Does he agree that access to cash is fundamental to this debate? In order for people to have the choice to use cash, access to it is at the basis of all that we are seeking to do.

Margaret Ferrier – MP for Rutherglen and Hamilton West – (SNP)

Figures show that 70% of people prefer to use cash because they are concerned about the privacy of alternative forms of payments, 49% said they used cash because of concerns about fraud. 

Does my hon. Friend understand the worries that a move to a cashless society could militate against consumer privacy and may leave sectors of society more vulnerable to fraud?

Impact on Tourism 

Drew Hendry MP Inverness, Nairn, Badenoch and Strathspey – (SNP)

Aviemore is a popular tourist destination. Large numbers of visitors come throughout the year.  Cash means additional spend, and the lack of it can restrict add-on sales. If there is an opportunity to spend some cash, they will spend it on smaller purchases, as well as some larger ones. Impulse buying is also restricted in the same way. That is all vital in an experience-based economy like we have, where visitors come to enjoy the different activities that they can take part in.

The Cairngorms national park, also relies heavily on tourism. They are directly affected by access to cash. The Grantown show is the big showpiece event of the year; people come from not only miles around but countries around the world to experience it. It is a fantastic event. However, by the opening time of the show last year, Grantown-on-Spey had run out of cash.  It is immeasurable and impossible to judge the impact that having no cash had on that key day for the local economy.

Businesses whether they are microbusinesses, or small or medium businesses have all historically relied on cash.

When we hear about a banking crisis the Government jump into action to protect the banks, but where is the same activity to support our communities who are in a banking crisis? They do not have banks or access to cash anymore. Where is the activity and energy for them? 

The Government need to step up and make sure there is continuity for people and a reversal of this journey to drain cash out of these communities the way that has happened. 

Lack of Access to Cash 

The European Central Bank found that cash remained the most frequent method of payment in 2022, at 59%. Despite that, and all of the research outlined, we continue to see a steady decline of bank branches on our high streets. In 2021, 736 bank branches closed throughout the UK. 

Ben Lake – (Ceredigion) (PC)

The reduction in banking facilities, especially in rural areas has accelerated the move to a cashless society. With banking costs, the depositing of cash for businesses is becoming even harder and more expensive.

There followed a debate on bank closures and lack of access to cash.  Bank hubs were discussed, also using the Post Office network.  

Cash Refusal 

A survey by the FCA explored the relationship between cash usage and factors including education, health and wealth.  

The impact of cash refusal is felt acutely by the most vulnerable/poorest within society:-

• Poverty is the biggest indicator of cash dependency.
• Those living in rural areas have low or no digital engagement.
• 140,000 adults in Scotland do not have bank accounts.
• 34% of over 60s do not use the internet.
• 26% of those in poor health use cash to a great extent, and that some people with physical or cognitive disabilities find payment methods other than cash difficult to use.

The Government acknowledge that in their response, stating that they want to ensure that vulnerable people have “appropriate access to banking” and payment services. [What does “appropriate” mean?]

Protecting access to banking and payment provisions, although important, does not address the issue of cash acceptance. 

There is growing evidence that cash refusal is becoming a very real issue. 

• The covid-19 pandemic has accelerated the cashless trend.  The pandemic led to an increase in the number of retailers that refused to accept cash.   [Due to the germ carrying narrative/it would appear “germs” do not live on phones or plastic cards].

• The cash census similarly found that as the economy reopened in the summer of 2020, retailers were increasingly going cashless, with 42% of people reporting that they had visited a shop that did not accept cash in July 2020.

• 77% of respondents said that a business had refused to let them purchase something with cash, the most common refusals coming from restaurants, takeaways and transport; and said that cash refusal had a large or moderate impact on them, describing feelings of embarrassment or anxiety as a result.

• Our daily lives are filled with examples of the cashless trend as the consumer experience becomes increasingly dominated by technology, from bus companies encouraging people to use contactless payments to card-only self-checkout machines in supermarkets. However, the march towards cashless risks the exclusion of a great many people and a profound and negative impact upon their lives.

To have the certainty that when we walk into a shop or restaurant our cash will be accepted is reasonable and, for many, vital. The Government can and must act to protect access to cash, the ability to use that cash, and the ability of businesses to easily deposit that cash. Those are very much connected issues, and they must be equally addressed.

The Cost of Depositing Cash 

 Duncan Baker – MP for North Norfolk – (Con) 

I was a retailer at one stage, so I appreciate traders’ attitudes towards accepting cash, which can become expensive. The banks make it expensive and more difficult for people to do their banking. If banks shut, people have to use courier services, which charge, and there is a delay in deposits coming into the bank. I understand that it is far easier to stop using cash, but that does not mean that it is the right thing to do.

It may be very difficult for the Government to enforce the preservation of cash payments in a free market, but they should be straining every sinew to incentivise providers and make sure that they continue to accept cash.  [Has Mr Baker spoken to RishiSunak about this?]

The access to cash review provided some sensible and feasible recommendations to help keep cash payments an option for the foreseeable future. The crux of all this is that I recognise that, at some point one day cash will begin to fizzle out, but it is fundamental that we help consumers for as long as physically possible, because it is necessary. 

Paul Maynard – MP for Blackpool North and Cleveleys – (Con)

Cost of Wholesale Cash Distribution  

The wholesale distribution of cash remains far too costly—£5bn to the economy overall—there is far too much duplication. We have not seen the radical reform I believe was needed when the Bank of England set up the Wholesale Distribution Steering Group to try to find an alternative model.  

I fear that some in the cash distribution sector are defending their commercial turf under the guise of protecting customer interests.

The Bank of England and NCS members are responsible for the UK’s wholesale cash distribution infrastructure.  

Read here

I had a fascinating trip to Vaultex near Warrington several years ago. Vaultex is one of the cash-handling and cash-distribution centres that covers the north of England. All our bank notes come in and come out of the centre.  I have never stood near so much money in my life. There is absolutely no chance of getting in or out with it—it even has a special roof that a helicopter cannot be landed on just to avoid any shenanigans—but what I saw there was duplication after duplication. 

Every bank required their bank notes to be counted, stored and separated in a specific way; there was no attempt to rationalise the process. I sat there thinking, “If only more banks could agree to handle their money in the same way, it would start to reduce this £5bn cost.” I gather there were proposals for a public utility model that would help to bring it all together to reduce the costs, but it is such an opaque process. The Bank of England does not update the minutes on its website for this Wholesale Distribution Steering Group, so I know very little about what is going on, which is frustrating.

Reducing that cost is the answer to what we have been discussing today, making it cheaper and more affordable for small businesses to keep taking cash.  If that does not happen, we will have a problem. 

We should reduce the cost of wholesale distribution, and make depositing cash easier with more deposit-taking ATMs. 

If we do that, we will start to tackle the vested interests which have hovered ghoulishly over this debate for far too long.

Now, over to the Government spokesman, Economic Secretary to the Treasury, Andrew Griffith for the final word. 

Once we have passed the Financial Services and Markets Bill, we will provide the policy statement about the importance of access to cash, the prevalence of that across the UK and “what thresholds will be appropriate for Government to take” different decisions or possibly to look at “mandating things”. My hon. Friend the Member for Blackpool North and Cleveleys talked about wholesale cash distribution, and the back end is important if we are to continue to ensure that businesses have the access to cash that they need. It is important that the wholesale cash infrastructure in the UK works and, in the Bill, again for the first time, we will take powers to regulate that, mindful that over time we expect to see the volume of cash decrease.

I have set out what the Government will do: the important step of taking powers in legislation that will soon be on the statute book, giving the FCA the ability for the first time to regulate access to cash. 

I give Members the reassurance that the Government’s desire or policy is not to eliminate cash. We have no such objective, but quite the opposite: the Government recognise the importance of the utility of cash in the system and will do whatever we can to ensure, practically, that our constituents continue to have the ability to use cash, as has always been their historical right. 

[Remember that crucial statement:- “as has always been their historical right”]

Watch the debate: https://www.youtube.com/watch?v=l1C3b887HDQ

Read the transcript: https://hansard.parliament.uk/commons/2023-03-20/debates/187CA19F-E3A9-48B1-B40A-869CB673F4A1/CashAcceptance

Read the research: https://commonslibrary.parliament.uk/research-briefings/cdp-2023-0067/

The petition: https://petition.parliament.uk/petitions/622284

The Petitions team
UK Government and Parliament

parliament /petitions/624159  

https://www.paymentchoicealliance.org/home

https://unitynewsnetwork.co.uk/could-we-be-hurtling-towards-a-digital-prison/