The UK Government Access to Cash Consultation - Four Key Issues

Posted on: 04/07/2021

On 1st July 2021, the UK Government announced an "Access to Cash Consultation".

Legislation is promised on access to cash, with this consultation seeking views on "establishing geographic requirements for the provision of cash withdrawal and deposit facilities, the designation of firms for meeting these requirements and establishing further regulatory oversight of cash services provision".

I have several issues with this consultation.

Firstly, the tone is one of access to cash being a problem that, with time, will go away. The basic stance is that when all UK residents are full participants in a Digital Society, cash will be gone.

This is the favoured  long-term messaging of the UK "Authorities", which deliberately ignores the fact that there are many UK residents who PREFER to use cash and WANT to continue to do so, whether they NEED to or not.

Cash is a vital part of the Payment Choice menu and an important store of value, BUT it is also a privacy shield, protecting citizens from over-controlling governments and commercial enterprises. There are clear Human Rights issues, with cash serving the role of a significant Public Good.

In the UK and around our planet, billions of human beings do NOT want to see the "digital demise" of cash. Their wishes need to be fully respected.

Secondly, the idea that firms that have a commercial vested interest in cash disappearing should be designated to meet the nations cash requirements is a non-starter. Providing the Poacher with a gun makes no sense at all.

Something similar was tried in Sweden, when a organisation owned by a consortium of banks was given control of all aspects of the circulation of the Swedish currency. It surely surprised no one that Sweden soon became the only country in the world with a decline in the value of cash in circulation. The Swedish Poacher used the gun well... 

To avoid the problems encountered in Sweden, the UK needs a new approach to meeting the nations cash requirements. A Cash Utility is one idea which could have mileage, so long as the organisation is able to earn profits to reinvest in the cash infrastructure, 

There may well be other solutions, but the only ones that should be seriously considered are those which envisage cherishing cash as a vital contributor to UK society forever.

Thirdly, the FCA is put forward as an appropriate body to have the role of the primary regulator of cash in the UK.

This can only work if the FCA is given the clear remit of maintaining the circulation of cash until no one wants to use it for any purpose. The FCA much be charged with having oversight of a permanent undertaking, not  to act as an Undertaker for cash.

Fourthly, in the consultation document there is an oblique reference to the fact that the UK government is not minded to legislate to compel the acceptance of cash for in-person payments.

Acceptance has become a crucial issue. It is simply not good enough for the government to back away from legislation. The only realistic explanation for doing so is that the government hopes that, as acceptance declines, the public will be forced to use other payment methods and cash will fade away as an issue.

For the reasons outlined in this article, cash CANNOT be allowed to fade away. Acceptance legislation is required NOW, in 2021.

So there are at least four major issues with the consultation.

The government will be hearing from me....



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