Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many small businesses rely on cash to function in the UK.

Research commissioned by the Payment Systems Regulator (PSR) in 2019 found that over half of small businesses accepted cash while it accounted for only 14% of their income on average.

The COVID-19 pandemic has impacted cash usage in the short-term and is likely to have accelerated the longer-term trends of declining cash use. However, it is too early to determine the lasting effect. In November 2020, the Bank of England published their Quarterly Bulletin, which included analysis of cash acceptance. Based on a survey in July 2020 they found that 42% of people had visited a store in the previous six months that did not accept cash. That represented an increase on the January figure of 15%.

The Government created the Joint Authorities Cash Strategy Group in 2019, which has provided a forum for the public bodies to formally co-ordinate respective approaches to access to cash. This is chaired by HM Treasury and attended by the Bank of England, PSR, and Financial Conduct Authority. The Group published an update on the actions of the Group’s members in July 2020.  The Government continues to engage with the regulators to monitor and assess risks around cash, including those resulting from COVID-19. In order to help control the virus, all businesses and individuals are encouraged to follow the latest Government advice. To work safely, retailers have been recommended to minimise contact around transactions, for example, considering using contactless payments. It remains the individual retailer’s choice as to whether to accept or decline any form of payment, including cash or card.

The Government has committed to bring forward legislation to ensure that the UK’s cash infrastructure is sustainable for the long term. In October 2020, the Government published a Call for Evidence on Access to Cash, which sought views on the key considerations associated with cash access, including deposit and withdrawal facilities, cash acceptance, and regulatory oversight of the cash system. The Government is considering responses to the Call for Evidence and will set out next steps in due course.