Protecting Cash

The cashless society is increasingly imminent, made more likely by the covid pandemic. Around 80% of the UK use contactless payments on a regular basis and only 1/6 payments are now made in cash.

For some, a cashless society is inevitable and should be welcomed. But, for many of our society’s most vulnerable, a cashless society is bad news. Which is why I, and my fellow Conservatives in Havering, have tabled a motion that Havering Council protect access to cash and allow cash payments for its services.

Access to Cash Review

In 2019, the UK government produced the Access to Cash Review. It found that the UK is not ready to go cashless. 17% of the population, around 8 million adults would “struggle to cope in a cashless society”. The report also highlighted the urgency of protecting the infrastructure around cash such as ATMS, because once these are gone there is no getting them back.

Some of the statistics, in the review, are eye-opening. 2% of the population have physical or mental health issues that make it hard to use digital services. 9% are at a greater risk of going into debt when going cashless and 4% of the population relies on others to buy things for them.

There is a whole section of society who relies on being able to physically handle money. You may know someone who is like that. Think of an elderly relative who asks you to get their weekly shop, perhaps you know someone with learning difficulties who struggles to operate a computer or smartphone.

Digital debt is also a fast-growing problem. Payment ‘solutions’ like Klarna encourage young adults to ‘spread payments’ over an ‘interest free’ period. Whilst Klarna state that only 1% of their customers default, they have 10 million of them. Financial website Money.co.uk says that the average 18-24yr old owes around £225 in ‘buy now pay later’ schemes.

Handling physical cash is a great way to avoid debt and to stay in control of your finances. Handing over something with weight, such as coins, or something crisp like a £10 note feels like giving away something of value. Go out with cash in your pocket and you know when you’ve reached your spending limit by the simple indication of sticking your hand in your pocket. Compare that to the ‘tap tap tap’ of a contactless bank card and the benefits of cash are clear.

Havering Council’s Role

So, what does this all have to do with Havering Council and why table the motion?

The starter is to recognise that the Council has a duty of care to our borough’s most vulnerable. Approximately 1.3 million UK adults don’t have a bank account, including refugees and those in extreme poverty such as homelessness. 6% of the population don’t have decent broadband or a good mobile reception, so managing cash digitally just isn’t an option for them.

We also see the day-to-day impact of cashless with Havering’s parking. Residents using the RingGo payment app often encounter problems such as unrecognised locations or overcharging. In car parks where digital parking is the only option, older residents are having to look elsewhere. They are penalised for not owning or wanting to own a smart phone. Even the option of calling the phone number isn’t attractive for them and many cite it as inconvenient and leaving them feeling at risk of being robbed of their phone.

Think, also, about the small businesses and self-employed. Many of these also rely on cash. Whether it be the window cleaner or gardener that your nan has round, or the small hairdresser who can’t afford to give a cut of his profits to the card processing companies. For them, cashlessness can mean closure.

There are, of course, some benefits to a digital payments system. Havering, as a Council, should be seeking efficiencies and lower costs. But this should not be at the expense of those who want or need to use cash.

The Motion

I, and Havering Conservatives, have asked that “Given the increasing rise of cashlessness, and the dangers of digital exclusion, Havering Council commits to protecting and promoting access to cash including ensuring cash payments are accepted for all council provided services”

What does this look like to me?

• That Havering Council allow parking to be paid for in cash, ending the discrimination against the elderly and vulnerable (including residential permits)

• That Havering Council take steps to ensure high streets are not left without an ATM. Perhaps even installing and operating ‘community ATMs’ themselves

• Supporting charities, such as the Citizen’s Advice Bureau, who support our most vulnerable in rearranging their debts and finances

The government is already taking action in this area. The Financial Conduct Authority is being given new powers that will allow it to fine banks who don’t provide cash handling facilities within a ‘reasonable distance’ of someone’s home. This follows the closure of 5,000 bank branches since 2015.

Our national government has woken up to the reality that we need to protect access to cash. I hope Havering Council do the same.

Finding / Giving Support

If you are struggling with debt, including ‘buy now pay later’ apps like Klarna, the Citizens Advice Bureau works with StepChange Debt Charity to offer support. You can contact the CAB on 08001448848 or visit https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-remedy-tool/.

If you’re a bit of a whizz when it comes to navigating the welfare system, rearranging finances, or general administration, please consider whether you could volunteer for your local CAB.