Why looming collapse of cash as a means of payment is a Brexit issue

A report commissioned by ATM operator Link says the UK’s cash infrastructure is facing a crisis, but with Brexit so dominating the government’s agenda, issues like this just aren’t being addressed

James Moore
Chief Business Commentator
Wednesday 06 March 2019 12:32
Cash payments have been in decline for years
Cash payments have been in decline for years

A report warning that the UK’s cash infrastructure could collapse if action is not taken doesn’t look like a Brexit issue. But it is.

The Access to Cash Review was put together by an independent panel of financial experts with the work funded by, but independent of, Link, which operates the UK’s network of cash machines.

It’s authoritative, raises some important points, and also (crucially) floats some ideas for tackling them.

The reason why it’s a Brexit issue is this: will any of those points get the attention they deserve paid to them by a crisis-wracked government focused on just that one thing?

The rapid decline in the use of cash ought to be an issue for the Treasury, which should be well aware of it. The issue has also been raised by the Payment Systems Regulator (repeatedly); the Financial Conduct Authority, which considered access to bank branches and ATMs in its Financial Lives of Consumers last year; and a variety of other organisations.

Some of the brighter sparks in the civil service congregate around Number 11 Downing Street, and they will doubtless be cognisant of the fact that the inability to use cash will pose a serious a problem for some groups; the poor, the elderly, those living in rural areas where broadband connections are lousy, hampering the use of recent technological innovations.

The problem is that the crisis is a looming one. There is still time before it becomes full blown. Given that the government’s time horizon currently doesn’t extend much beyond getting through the day without yet another disaster of its own making crashing down on its, and our, heads, it will likely feel that this is one of the many issues that can wait.

No one has the faintest idea what’s happening with Brexit, businesses are screaming, and the economy is wilting. That’s before one considers the impact of a no-deal cliff edge and the fact that it could still happen, either by accident or the design of the extremists or the allies of extremists whom Chancellor Philip Hammond sits around the cabinet table with.

That’s what the Treasury is focused upon, and it doesn’t have much choice. Everything else is on the back burner.

So you can forget consideration of the report’s suggested solutions; requiring that essential services provided by utilities and councils allow for cash payments, having the banks create a body that would step in if rural communities run short, among other things. Ditto the idea of creating a watchdog to safeguard cash, suggested by pressure group Positive Money.

The government intervention all of those would require won’t be forthcoming, even in the very unlikely event that MPs back the prime minister’s dismal Brexit deal, when it finally reappears before them, because it represents just the start of the process of fixing the UK’s trading relationships with the EU and beyond, something that will be the government’s priority for years. Then there are all the other unexpected issues that are still being thrown up.

Villages running dry of cash, people not being able to buy the Big Issue, elderly people going hungry because they can’t pay for shopping? We’ll worry about it when it starts to happen.

So yes, the collapse of cash raised by the Link report is, like so many other things, a Brexit issue even if it doesn’t seem like one.

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