Cash Acceptance

Martyn Day Excerpts

Monday 20th March 2023 Westminster Hall

[Hannah Bardell (in the Chair)]

Before we begin, I want to put on the record that we are delighted to see so many members of the public in the Public Gallery for this important debate. I ask that everybody’s phones are turned off and that we keep noise to a minimum to allow Members to enjoy the flow of debate and for those watching at home.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

I beg to move,

That this House has considered e-petitions 605030 and 622284, relating to the acceptance of cash.

It is genuinely a pleasure to serve under your chairmanship, Ms Bardell. The petitions before us attracted more than 58,500 signatures between them, having closed on 5 July 2022 and 10 March this year respectively. I thank the creators and signatories of the two petitions. Their actions have meant we are here today to debate an issue that is clearly of interest and concern to many people across the UK.

The petitioners call on the Government to:

“Make it illegal for retailers and services to decline cash payments”,

and to:

“Require all businesses and public services to accept cash payments”,

with the exception of internet-based businesses. They argue:

“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.”

They stated:

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

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

In response to the Petitions Committee’s online survey, 61% of respondents said that they use cash to help with budgeting and, in the light of the cost of living crisis, by way of tracking their spending. Does my hon. Friend agree that the UK Government must recognise and protect cash as a tool that helps people to survive the cost of living crisis?

[Martyn Day]

My hon. Friend makes a good point. Indeed, I emphasise that it is essential not only for many people who budget, but for those on lower incomes, the elderly and those with disabilities, who need that facility the most.

[Ronnie Cowan (Inverclyde) (SNP)]

As my hon. Friend mentioned, freedom of choice is imperative. Currently, we need cash and card. We need to make everyone comfortable with the direction of travel. Does he agree that an education programme is required akin to the one we had back in the day when we introduced decimalisation? Given the average age of people in the room, I may have to explain what decimalisation is.

[Martyn Day]

I am grateful to my hon. Friend. I am perhaps giving my age away, but I came in with decimalisation. I recall the ready reckoners that my elderly relatives had for me to play with as a toy many years ago. An education programme would be helpful. In 20 to 30 years from now we will be in a different place, but here and now there is a real demand for cash, particularly for many vulnerable groups, such as disabled users who need cash and may not even have their own bank accounts.

[Sir Peter Bottomley (Worthing West) (Con)]

Just in case the hon. Member for Inverclyde (Ronnie Cowan) was referring to those of us with more experience, I should say there was a time in 1971, when I was selling coin-operated tea and coffee machines, when someone wrote in saying, “The elderly will find the new coins difficult. The elderly don’t live forever; could the change be postponed until they’re all dead?”

The more serious point, which will be shared throughout the House, is that people should not be excluded from being able to buy or pay for things just because they do not have a card or an account. Many people rely on the use of cash. Those businesses that do not need their custom ought to be told, “You should have it because you should not exclude people just because they aren’t up to date or a 14-year-old with a debit card.”

[Martyn Day]

The Father of the House makes a valid point, and one that I shall echo a number of times as I make progress through my speech—if there are no other interventions.

Zachary Stiling, creator of the more recent petition, told me:

“We must protect the individual’s right to use cash in all physical transactions. While there are many obvious advantages to digital payments, it is not suitable at all times or for all people…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.”

As we have heard from a number of interventions, freedom of choice is a central tenet of this issue. To be clear, the choice to use cash is still one that many people wish to make. Indeed, 95% of respondents to the Petitions Committee survey ahead of this debate stated that they preferred to use cash to pay for things over other means of payment. I know from my own experience that I would be happier using cash when I am in a pub or a restaurant than when I am shopping. It is different horses for different courses.

Figures from the Royal Society for the Encouragement of Arts, Manufactures and Commerce 2022 cash census showed that 96% of people withdraw cash at some frequency, with 83% having cash either in their wallet or at home. Furthermore, 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 for most things, over the 12 months from May 2021. That is a significant number of people.

[Mr Gregory Campbell (East Londonderry) (DUP)]

Last year, I was at a coffee outlet in London City airport that only took cards. A constituent asked me to take up the issue, which I did. A few weeks later, it introduced a process for cash and card. Three months later, the constituent sent me a photograph of a sign saying, “Cards not working today, only cash.” How ironic was that?

[Martyn Day]

The hon. Member makes a very good point on which I wholeheartedly agree. As I said, 6% of adults use cash payment for almost everything. That figure increases to 9% of those in the most vulnerable circumstances. I shall return later to the impact of cash refusal on the most vulnerable in our society.

Although the covid-19 pandemic undoubtedly affected payment habits, there has been both a sustained, albeit partial, recovery and a stabilisation in trends around the use of cash, as noted by the Bank of England in its third quarter bulletin in 2022. The Bank also noted that the value of bank notes in circulation remains close to an historic high, reflecting the fact that up to 60% of the population are holding more cash as a store of value.

Beyond freedom of choice, there are other clear benefits to using cash. One 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 that should not be underestimated is the role that cash can play when other payment methods fail, as the hon. Member for East Londonderry (Mr Campbell) illustrated. I am sure that many of our constituents have had the experience of being unable to use online services or cards in the face of card rejection, IT glitches or system outages.

I can give an example from my own life, when I visited a friend who was recovering from surgery in hospital. I stopped for fuel on the way, which was lucky for me because although I had no cash in my pocket, my card was accepted, and when I got to their house I had an email from my bank telling me that it thought there had been a suspicious card transaction so my card had been stopped; had I tried to buy fuel on the way home, I would have had no means of paying for it. Cash is essential.

[Margaret Ferrier]

Figures show that 70% of people prefer to use cash because they are concerned about the privacy of alternative forms of payments, and 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?

[Martyn Day]

I agree entirely with my hon. Friend’s good points. It appears to be something that concerns very many people. Research from Which? has shown that 82% of Scottish consumers are likely to keep cash in case electronic payments are down.

[Patricia Gibson (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.

[Martyn Day]

Absolutely, and I will come to that later in my speech. I hope the Minister takes cognisance of that well-made point.

There are also those who have valid privacy concerns about electronic payments. In an age of technology, algorithms, digital footprints and cyber-crimes, it is understandable that some—perhaps many—of our constituents would prefer the financial privacy offered by cash transactions. Some constituents wrote to me in recent weeks to make that point. Many stated that they regard barriers to using cash as a violation of their right to privacy. Cash clearly remains an important and valued part of our transactional landscape. As such, the ability to access and use cash must be protected.

In their response to both petitions, the Government state:

“The Government does not intend to mandate cash acceptance.”

They say that they will instead make provisions through the Financial Services and Markets Bill to ensure reasonable access to infrastructure such as withdrawal and deposit facilities. Of course, the availability of such infrastructure is clearly a concern for consumers and businesses. In Scotland, 53% of bank branches have closed since 2015, and since 2018 some 20% of Scotland’s free-to-use ATMs have closed. In many communities, banks have withdrawn completely, often leaving the post offices as the last place in town to do basic banking.

[Damien Moore (Southport) (Con)]

The hon. Gentleman is talking about banks closing; the bank on my high street is still open but will not give cash and directs people to the post office. Does he agree that it is appalling that we have banks on our high streets that are not providing the services that customers want?

[Martyn Day]

Absolutely; the hon. Gentleman makes a good point, for which I thank him. I am flabbergasted that a bank is not dealing with cash—it beggars belief.

The issues raised need to be addressed, but protecting access to cash is not the same as protecting the right to use cash—a right that, for many, amounts to an absolute necessity. For some of our constituents, not being able to use cash is a profound barrier in everyday life. Cash can be a vital means of budgeting. As noted in the 2019 access to cash review, that is especially true for those on lower incomes. The 2022 cash census identified that there are cash users who are highly dependent on cash for budgeting and would struggle to swich to digital payments. It concluded that 15 million people in the UK use cash to budget. That is backed up by the responses to the Petitions Committee survey: 61% of respondents stated that they use cash to budget.

Earlier, I touched on the impact of cash refusal on vulnerable groups, to which I now return. The access to cash review drew a stark conclusion. It identified that more than 8 million adults in the UK

“would struggle to cope in a cashless society. For many people in the UK, using cash is not a matter of choice, but of necessity.”

It highlighted that

“poverty is the biggest indicator of cash dependency”.

Dependence on cash is closely tied to barriers to digital connectivity—for example, for those living in rural areas and those with low or no digital engagement.

In its 2022 policy briefing on the subject, Age Scotland raised the importance of cash for older people. It highlighted that many on low or fixed incomes prefer to use cash to budget. It also noted that

“140,000 adults in Scotland do not have bank accounts”,

and that

“34%...of over 60s in Scotland do not use the internet”.

Furthermore, a 2020 survey by the Financial Conduct Authority explored the relationship between cash usage and factors including education, health and wealth. It noted that 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.

[Margaret Ferrier]

My hon. Friend is generous to give way again. It has been reported that about 10% of people have been unable to pay for medical supplies with cash. We know that older people and those with some physical and mental health problems prefer using cash. Is my hon. Friend concerned that certain societal groups may be at risk of being unable to access the medical care they require if they cannot pay with cash?

[Martyn Day]

That is a valid concern that I hope the Minister will address when he responds to the debate.

Some 8% of respondents to the Petitions Committee survey said that they had a physical or mental health issue that made using alternatives to cash difficult. The issues included bipolar disorder, anxiety disorder, depression, arthritis, visual impairment, cognitive disability and strokes. It is reasonable to conclude, therefore, that the impact of cash refusal is felt acutely by those on lower incomes, those who experience barriers to digital payments, those who are disabled, and those with physical or mental health conditions. Indeed, the Government acknowledge that in their response, stating that they want to ensure that vulnerable people

“have appropriate access to banking”

and payment services.

However, to reiterate my earlier point, 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 undoubtedly accelerated the cashless trend. As Which? research has shown, the pandemic led to an increase in the number of retailers that refuse to accept cash. 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.

The results of the Petitions Committee’s survey also make for stark reading: 77% of respondents said that a business had refused to let them purchase something with cash, with the most common refusals of cash coming from restaurants, takeaways and transport; and 88% 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 on their lives.

The Government’s current position of focusing on infrastructure but ultimately leaving the decision in respect of cash acceptance to individual businesses simply does not go far enough. It is essential that gaps in the provision of banking facilities are addressed so that people can access cash easily in their community and small business owners do not have to travel many miles to access deposit facilities. However, that alone does not guarantee cash acceptance. It is a difficult issue for many businesses, especially where the ability to deposit cash might involve lengthy journeys away from their business.

The Association of Convenience Stores advises that 60% of transactions in independent convenience stores are paid in cash, and that 99% of shops in its sector continue to accept cash, with retailers striving to give customers access to their preferred payment options. While supporting access to cash to facilitate financial inclusion, the ACS would rather the decision on what payment methods to accept be left to individual businesses and not mandated by the Government, whereas an overwhelming 98% of respondents to the Petitions Committee survey agreed with the petitioners that shops and services should be required to accept cash. This is clearly an issue that affects and concerns many of our constituents, customers and businesses alike. The Government need a plan to ensure that those dependent on cash are not left behind, and part of that must be about protecting their right to use cash.

The UK Cash Supply Alliance has called for businesses to be required by law to accept cash payments for in-person services equivalent to the maximum value of contactless transactions. In their response, the Government talk a lot about what is reasonable—“reasonable access”, “reasonable provision” and so on. Ensuring that individuals and businesses have easy and convenient access to banking facilities is not only reasonable but essential, and a requirement to accept cash for lower-value transactions is also reasonable. 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.

This is a complex issue, and I am aware that I have touched on a lot of different factors in a short space of time. Indeed, I could have touched on many other factors, but I look forward to comments from other Members. I have covered some factors in more detail than others, and I look forward to the Government’s response at the end of the debate.

--- Later in debate ---

[Martyn Day]

On behalf of the Petitions Committee, I extend my thanks to all Members who came along today to make speeches or interventions. We have had a reasonable and well-informed debate, which has very much summed up the changing nature of the relationship with cash in our society. This issue goes to the heart of choice, financial inclusion, budgeting and privacy, all of which show how vital the access to and use of cash are for many of our constituents, in particular the most vulnerable. I remain of the view that it would be perfectly reasonable to have a legal requirement for a minimum level of acceptance of cash by retailers for in-person transactions.

Question put and agreed to.

Resolved,

That this House has considered e-petitions 605030 and 622284, relating to the acceptance of cash.