Shops and firms will not be forced to accept cash

Shops and service firms will not be compelled to accept cash, a government minister has said, despite concerns that millions of vulnerable people rely on it.

Emma Reynolds, the new economic secretary to the Treasury, was pressed on coffee shops, trains and leisure centres excluding people by no longer accepting cash.

But she told MPs on the Treasury Committee that there was no chance of the UK becoming cash-free anytime soon.

She said the government was concentrating on ensuring everyone had access to cash, such as through new banking hubs, and on improving people’s digital skills.

Cash is legal tender in the UK, but businesses are not obliged to serve people who only want to pay with notes and coins.

Some countries, such as Australia, are considering rules that would force essential services to accept cash.

But Ms Reynolds effectively ruled out such a move in the UK.

“We have no plans to regulate businesses – big or small – to compel them to accept cash,” she said.

She said the UK was “not anywhere near” being a cashless society, with convenience stores planning to accept notes and coins for years. But she said tackling digital exclusion was still key for those who might struggle.

Members of the committee pointed to evidence they had received from victims of domestic and economic abuse who said they only had an escape route with cash.

Even after getting away, some found they were unable to pay for their children’s school dinners with cash.

Card payments dominate ways of paying, and consumers are increasingly using their smartphones to pay for things.

However, notes and coins were used in a fifth of shop transactions last year, according to the British Retail Consortium (BRC), as shoppers found cash helped them to budget better.

It was the second year in a row that cash use in shops had risen following a decade of falls.

Recommendations will be made in the coming weeks from the Treasury Committee after its inquiry into the acceptance of cash.

Ms Reynolds’ evidence was the final session, but earlier they heard from disadvantaged people who still rely on paying with cash.

Speaking to the BBC after giving evidence, Constantine Louis said he wanted choice over ways to pay.

“For older people, when they use cash, they feel as though they are in control,” said the 84-year-old, who lives in a one-bedroom flat.

“Young people will get older one day and may have the same problems we have – they may start forgetting their Pin numbers.

“For those who get on the bus and pay with their mobile – that’s fine with me. But I can’t do it. I don’t know how to do it.”

Caroline Cawley, from Edinburgh, has a disability and said every penny counted in her life.

“Cash is important for budgeting reasons, mainly,” the 41-year-old said after giving evidence.

“It is much easier to keep tabs of what you’ve got if you have it physically in your purse.”

She said digital payments risked her going overdrawn, and facing unmanageable interest and fees as a result.

Failure to accept cash, which was the case if she wanted to go for a swim at her local leisure centre, was creating “a two-tier society”, she said.