Asked by
To ask Her Majesty’s Government what plans they have (1) to
designate the United Kingdom’s cash network as Critical National
Infrastructure, and (2) to introduce a Universal Service
Obligation for the provision of cash.
(Con)
I beg leave to ask the Question standing in my name on the Order
Paper and in doing so declare my technology interests as set out
in the register.
The Minister of State, Cabinet Office and the Treasury () (Con)
My Lords, designation of the United Kingdom’s critical national
infrastructure is sensitive and as such is not made public.
However, the Government have committed to legislating to protect
access to cash and to ensure that the UK’s cash infrastructure is
sustainable for the long term. The Government recently concluded
a consultation setting out proposals for new legislation which
seeks to ensure that people only need to travel a reasonable
distance to pay in or take out cash.
(Con)
My Lords, does my noble friend agree that, whether for the
financial inclusion of individuals or the overall resilience of
the UK economy, until we have high-speed reliable digital
connectivity and high levels of universal digital inclusion, cash
still matters, and it matters materially?
(Con)
I agree with my noble friend; he is completely correct. It is
worth pointing out as some reassurance that over 79% of adults
over 65 have made a payment using contactless in the last year
and 84% of adults over 65 have used online banking, so I think
the digital revolution is spreading to all parts of our
society.
(Lab)
My Lords, the Minister’s answers seem to indicate that the
Government are very keen that we end up as a cashless society,
with everything done with cards and so on. Is he aware that
Sweden has stopped this move because of fears of a covert attack?
In which case, if we were cashless and had a covert attack which
disabled everything, we would be a moneyless society.
(Con)
The noble Lord makes a good point—though perhaps he meant “cyber”
attacks—and it is certainly part of our responsibility to ensure
that the banking system is resilient to attacks. We have convened
the banking system and ensured that operational resilience is a
key part of protecting the UK’s financial system, institutions
and customers.
(Con)
My Lords, is there not a levelling-up issue behind my noble
friend’s Question, in that areas that are left behind have more
people without bank accounts and fewer ATMs? Will this be
addressed in the forthcoming levelling up White Paper?
(Con)
My noble friend is right that access to cash can be more
difficult for those less well off. However, as he will be aware,
LINK has committed to protect free-to-use ATMs more than one
kilometre away from the next nearest free ATM or post office and
free access to cash on high streets. It remains a priority of
this Government to ensure that cash is available.
(LD)
My Lords, I wonder if I can press the Government, because the
Bank of England is looking closely at a central bank digital
currency. Many have suggested that this will be the substitute
for cash in the future, but its characteristics are quite
different, in many ways, from cash. Can we have an assurance from
the Government that they will keep in place a cash infrastructure
running alongside—if they choose it—a digital sterling?
(Con)
My Lords, we are certainly looking at a digital system, but I
reassure the noble Baroness that cash remains a key part of the
ecosystem.
(UUP)
My Lords, as a former member of the Select Committee on Financial
Exclusion, so ably chaired by the noble Baroness, Lady Tyler of
Enfield, I first endorse what the noble Lord, , said about levelling
up. Even though the statistics show a reduction in the number of
those needing cash, people still become at the mercy of ruthless
illegal moneylenders and others, and this is destroying lives.
Can the Minister assure the House that he will keep pressure on
the banks to ensure that there are effective and accessible
services that allow these people access to the financial system,
so that they can avoid all this desperation and the criminality
that flows from it?
(Con)
My Lords, basic bank accounts are one requirement of the banking
system; the nine largest account providers are required to
provide this to customers, and there are some 7 million basic
accounts open with these providers. They are easier to open than
ordinary bank accounts, and that facility remains available.
(Con)
I first draw attention to my interests as set out in the
register, particularly as an independent director of LINK. Does
my noble friend the Minister have an indication of when the
fundamental review of financial services regulation will be
concluded? Given that the pressure on cash infrastructure is now
so acute, what news is there of the work the FCA is overseeing
with the banks on developing a much-needed plan to protect cash
infrastructure?
(Con)
My noble friend asks important questions. On access to cash, as I
said in earlier answers, the Government are committed to
legislating to protect access to cash and ensuring that the UK’s
cash infrastructure is sustainable in the long term. In answer to
my noble friend’s second question, the Government are undertaking
a wider financial services future regulatory review, which aims
to build on the strengths of the UK’s existing framework as set
out in the Financial Services and Markets Act 2000. An initial
consultation exploring these issues and a proposed approach was
published by the Treasury in October last year, and we had 120
responses. We will publish a second consultation with detailed
proposals shortly.
(Lab)
My Lords, the noble Lord, , is right to keep
up the pressure on this important issue. The problem to date has
been the lack of ownership, with the Treasury urging action from
a variety of regulators and public bodies, none of which has a
whip to crack when providers leave town. The recent consultation
sought to place overall responsibility with the Financial Conduct
Authority. Is this still the Treasury’s preference? If so, when
and how will this be enacted?
(Con)
My Lords, the Government’s consultation set out proposals for the
Financial Conduct Authority to become the lead regulator for
oversight of the retail cash system, including having
responsibility for monitoring and enforcing new legislation and
cash access requirements. In adopting this approach, the
Government intend that the Payment Systems Regulator and the Bank
of England continue with their existing functions with regards to
cash. Co-ordinated actions by the FCA and PSR on cash as part of
the Covid response have shown that joint working between the
regulators at both strategic and operational levels is
working.
(LD)
My Lords, following on from the questions from the noble Lords,
Lord Hunt and , will the Government commit to
giving the Financial Conduct Authority responsibility to start
tracking trends in cash acceptance levels among UK businesses to
help understand what action might be required to prevent that
problem worsening? Separate from the legislation—it will be great
to get a timetable for when it will be introduced—what specific
measures will the Government take to ensure that people,
particularly those who rely on cash, can continue to use cash to
pay for goods and services?
(Con)
My Lords, as part of the FCA’s role in monitoring and enforcing
cash access, the Government consider that it should be given
responsibility for ensuring that access points provide reasonable
access. In terms of recent activity, since the passing of the
Financial Services Act, retailers now have the ability to offer
cashback without purchase—I think it was from 29 June—and we are
already seeing some take-up of that. Indeed, PayPoint, which
operates terminals in several thousand outlets across the
country, has committed to provide that extension to its
service.
(Con)
Will my noble friend give an assurance that there will continue
to be access to cash in rural areas? Could he please define what,
in his view, is a reasonable distance to travel to pay in or take
out cash?
(Con)
My Lords, to reassure the noble Baroness, the provision of cash
access across the UK remains extensive. As of March this year,
95% of the population were within two kilometres of a free cash
withdrawal point.
