Asked by
To ask His Majesty’s Government what discussions they have had
with retailers and other outlets concerning their acceptance of
cash as legal tender.
(Con)
My Lords, Ministers and officials have meetings with a variety of
organisations in the public and private sectors, including on
access to cash and related issues. Details of ministerial
meetings are published on a quarterly basis. Regarding cash
acceptance, it should remain the choice of organisations whether
to accept or decline any form of payment. The Government’s
legislation in the Financial Services and Markets Bill intends to
support cash acceptance by ensuring that businesses have
reasonable access to deposit facilities.
(Con)
My Lords, I am very grateful to my noble friend, in particular
for standing in at short notice when the noble Baroness, Lady
Penn, was delayed. I think that this is the first time that he
has answered a Question; can I be the first to congratulate him?
However, are the Government aware of the scale of the problem
faced? Some 5 million people—some of the most vulnerable in our
society—depend on cash. Forcing such people to use plastic cannot
be a good idea. Some 20 million of us use cash more than twice a
week, and on average three cash machines are taken out of service
every day. If my noble friend and his officials think that I am
exaggerating, they might care to read the article in the
Financial Times last week about offering lifelines to people
struggling in a cashless society.
(Con)
The Government want to ensure that people have appropriate access
to financial products and services, which includes bank accounts,
payment services and cash. LINK, the operator of the UK’s largest
ATM network, has established a number of initiatives to protect
the broad geographic spread of free-to-use ATMs. LINK has
committed to protecting free-to-use ATMs more than a kilometre
away from the nearest free ATM or post office, and is held to
account against this commitment by the Payment Systems
Regulator.
(LD)
My Lords, I also welcome the Minister to his role. Thanks to the
excellent work of the Access to Cash Action Group and LINK, new
banking hubs are planned where a community is bereft of bank
branches, which will permit the kind of deposits that the noble
Lord named in his Question. Since the scheme is vital for access
to cash, should the banks be permitted to veto approval of a hub
in an area that meets the criteria?
(Con)
Following the Government’s commitment to legislate, industry is
working together to develop new initiatives to provide shared
access to cash services. This includes a process for LINK to
access a community’s cash needs in the event of a closure of a
core cash service or a request from a local community. In
circumstances where LINK considers that a community requires
additional cash services, industry will ensure a suitable shared
solution in that community.
(Lab)
My Lords, the Cash Census report published earlier this year
warned:
“While a cashless society would feel like progress for some … for
millions it would lead to anxiety, economic exclusion, isolation,
exploitation, debt”
and “rising costs”. Does the Minister accept that cash is still
the major means of spending for a substantial proportion of our
society, and that retailers should be required to accept legal
currency?
(Con)
The definition of “legal tender” is quite narrow. However, the
ongoing trend in payments in the UK has been away from cash and
towards card payments and other digital transactions. However,
cash continues to be used by millions of people across the UK,
including those in vulnerable groups. The Government are
legislating to ensure reasonable provision of cash withdrawal and
deposit facilities.
(Con)
Following that answer, I say that there is a real problem with
the non-acceptance of cash. We all find it at different times. It
is not a problem for me, but it is for those who do not have bank
accounts, debit cards and credit cards. Will the Government
consider having a proper review to address this, so that small
businesses that find cash a nuisance can manage and that everyday
people can use cash when they want to?
(Con)
As my noble friend will know, technology and consumer behaviour
are changing and it remains the choice of individual
organisations whether to accept or decline any form of payment,
including cash or card, based on a consideration of factors, such
as customer preference and cost. However, the Government consider
that their legislation in the Financial Services and Markets Bill
will support organisations, including local businesses, to
continue accepting cash by ensuring that they have reasonable
access to deposit facilities. As I said, legal tender has a
narrow technical meaning: it means that if you offer to fully pay
off a debt to someone in legal tender, they cannot sue you for
failing to repay.
My Lords, this is a problem that particularly affects rural
areas, where there are far fewer cash-dispensing machines. Also,
there are many parts of rural areas where there is no internet,
so even if you want to pay by BACS or direct transfer, you just
cannot do it. Will the Minister assure us that the Government
will properly rural-proof this discussion so that we are able to
ensure that rural areas can still function effectively?
(Con)
As someone who comes from a rural community, I know only too well
the trials and tribulations of getting a good connection. The
Government recognise that digital inclusion needs to be promoted
alongside financial inclusion. That is why we are committed to
ensuring that everyone has access to digital infrastructure and
the skills necessary to participate fully in society, and that
very much includes rural areas. In 2021, the Government launched
Project Gigabit, which committed a landmark £5 billion to support
the rollout of gigabit connectivity in the hardest-to-reach
areas.
(Lab)
I too welcome the Minister to his place. I remember in similar
circumstances when I was on that Front Bench explaining to the
civil servants that Question Time is a blood sport—and you, my
friend, are the fox. When a shop opts not to accept cash, in most
cases customers are able to go elsewhere. However, when it comes
to services such as car parks, there is often no alternative
available. Many are happy to pay for parking on apps or over the
phone, but a sizeable number are not. What does the Minister
suggest that those people do when they arrive and find, without
any consultation, that the pay machines have been
decommissioned?
(Con)
I have suffered that situation myself. A customer intending to
park who has not been warned that payment has moved from a cash
or coin system to digital-only should take that up immediately
with the council or whoever is administering that parking space
on behalf of the local council.
(CB)
My Lords, there is another problem. Because so many banks are
closing their branches, one of the shopkeepers in my part of east
Devon says that he cannot accept cash because he has to go seven
or eight miles to the bank and cannot get there because his shop
is open until six in the evening. Could the Minister look at the
issue of bank branch closures set beside the question of
cash?
(Con)
Since 2019, the Government have chaired the Financial Inclusion
Policy Forum, bringing together the financial services industry,
consumer groups, the regulator and the third sector. We have also
published an annual report on the Government’s work on financial
inclusion. The most recent report was published in December 2021.
Since 2019, the Government have allocated £100 million of funding
from dormant assets towards financial inclusion.
(Con)
My Lords, I too congratulate my noble friend on his first
appearance at the Dispatch Box, and I assure the House that he is
also an excellent Whip. I served on the House’s Select Committee
on post-Covid recovery. We received evidence on this from
retailers and individuals. The substantive point is that, if you
do not have a bank account, you are excluded from shops cand
cafes that you have visited for many years. You are forced to go
into other shops where the choice is not as great. What happens
is a very strange and unusual piece of social exclusion in which
you find yourself paying more for less choice. What discussions
has my noble friend had with the banking industry to increase the
availability of accounts for people who do not have them? Will he
give us his best estimate of the number of households that do not
have a single bank account?
(Con)
My noble friend makes an excellent point that, to be fully
included in society, a working bank account is essential. I will
certainly take that back to the department to ensure that the
Treasury communicates with the banking and financial services
sector to make the opening of a bank account as easy and
accessible as possible. I will try to write to him on the number
of households which do not currently have a bank account.
