‘Big Win’: UK Government Will Force Banks to Keep Cash Available to Public

The government will set unlimited fines for banks that fail to protect access to cash, the Treasury said, in a major move against the march towards a cashless society campaigner Nigel Farage has called a “big win”.

Banks in the United Kingdom will have to provide free-to-access cash withdrawals and deposits within one mile of a person’s home in urban areas and within three miles in rural areas according to new laws and rules being rolled out by the government to protect cash. Yet some pro-cash campaigners point out the change doesn’t go far enough, as retailers are still perfectly entitled to refuse to accept cash as payment.

The announcement comes after months of campaigning against the encroaching cashless society and debanking being led by Brexit’s Nigel Farage, and was announced just hours after Farage and co-signatories delivered a petition to the government demanding cash be protected for decades to come.

Among the new rules are provisions for both people who want to be able to access cash locally to them, and for businesses so they can easily deposit the cash they take from the public with their bank, both intended to keep cash as convenient as possible.

The powers, which are backed up by potentially massive fines to be imposed by the Financial Conduct Authority (FCA) would also prevent banks from closing local branches unless some provision for cash access was arranged for in their place. Bank branch closures have been a major feature of the past decade, moving from a world where most British big banks had a branch in every sizable town to one where long travel to undertake basic banking has become the norm for many, alongside a push towards digital by the banks themselves.

Mr Farage called the news: “Another big win against the banks.”

Speaking to GB News, the British broadcaster who has been instrumental in the campaign to keep cash in recent weeks, Economic Secretary to the Treasury Andrew Griffith MP said of the announcement: “cash is important, it’s here to stay for the long term. Many people the elderly, the vulnerable, particularly rural communities, do depend on that access to cash.

“And if we want our shops to continue to take cash over the counter, then, of course, those businesses have got to have somewhere to deposit it. So the rules we’re announcing also cover the ability of businesses to deposit cash in a location that this convenient to them”.

The FCA also responded, reports the Daily Telegraph, saying: “these new powers will help ensure access to cash is maintained for many businesses and people who continue to rely on it.

“In the autumn we will consult on new rules that will require banks to maintain reasonable access to cash… We look forward to the Government outlining which firms our new access to cash rules will apply to inform this vital work.”

Yet for cash campaigners, the new rules may not go far enough. Indeed, what was announced last night seems to not differ meaningfully from what the government was already discussing earlier this year, meaning the Conservatives may be trying to ride on the coat-tails of the popularity of Farage’s campaign, rather than truly reacting to the shocking revelations and introducing all-new changes.

Shaun Bailey, the one-time Conservative candidate for the Mayor of London underlined one of the key weaknesses in the move, which is it does nothing to stem the considerable growth in businesses that simply refuse to accept cash, insisting on digital payment instead. Under the present system, they are legally entitled to do this. Bailey said: “there’s no point you having cash if businesses don’t have to legally accept that cash. So I think they should accept cash as a legal tender to 2050 and beyond. That would make the crucial difference”.

Bailey’s remarks underline the degree to which the government’s new strategy on cash hasn’t actually appreciably changed this year, despite it being keen to be seen to be responding to the major problems brought to wider attention by the Keep Cash campaign and Mr Farage’s activism on debanking. Indeed, announcement minister Griffith was actually saying in March of this year of the cashless society: “Whilst this is an emerging issue and something we contemplate for the future, this isn’t perhaps such a prevalent issue today… I want to be clear, it is not the government’s position… that we will mandate cash acceptance on retailers or public services”.

There is no indication in the latest announcement this position has changed. As things stand, there are plentiful restrictions on ways in which individuals can spend their money, and how businesses can refuse to accept your preferred payment method if they don’t want the inconvenience of having to deal with your cash. The Bank of England’s own rundown on the definition of legal tender explains:

A shop owner can choose what payment they accept. If you want to pay for a pack of gum with a £50 note, it’s perfectly legal to turn you down. Likewise for all other banknotes, it’s a matter of discretion. If your local corner shop decided to only accept payments in Pokémon cards that would be within their right too. But they’d probably lose customers.

…There are also some restrictions when using small coins. For example, 1p and 2p coins only count as legal tender for any amount up to 20p.

Many common and safe payment methods such as cheques, debit cards and contactless aren’t legal tender.

Farage’s petition aims to challenge this idea, albeit with what may be called a folk, commonly-held understanding of what ‘legal tender’ is, rather than an economist’s narrow and technical definition. The petition that was delivered to Downing Street on Thursday, and which now has more than 300,000 signatures, reads:

I call on the Government to introduce legislation to protect the status of cash as legal tender and as a widely accepted means of payment in the UK until at least 2050.

Speaking on the petition on Thursday night after his visit to Downing Street, Mr Farage said on the importance of this change: “we want legal tender to remain legal tender and we fear we’re being driven towards a cashless society.”