The Guardian

A note of caution about the withdrawal of cash

David Foldvari David Mitchell

There was some unexpected implied criticism of King Charles in the Daily Mail last week. It wasn’t the usual sort of complaint about his environmentalism or a kindly remark he made that could be interpreted as left-leaning. An article about bank closures, with particular reference to Windsor where every single bank has now closed, said this about the late queen: “Would they have dared to shut down – particularly those in plain sight of the castle – if she were still in residence.” No question mark (perhaps they’re economising on subeditors?) but I took it as a question.

To my mind the answer is clearly yes. The proximity of her late majesty would not have affected the banks’ decisions. But it doesn’t feel like the writer of the article would agree with me. She seems to think they would have been scared to close in case the queen had disapproved, especially – and this strikes me as an eccentric worldview – if the branches were “in plain sight of the castle”. It suggests that the queen used to look out of the window and check up on whether any changes happening in Britain were to her liking. With this rudimentary form of vigilance, a branch hidden round the corner might get away with closing, but not ones that she could immediately spot.

This raises further questions: would commercial premises within sight of a royal residence be less desirable because of the constraints her majesty’s judgmental gaze might put on commerce? Would the value of such property go down because it would be impossible to let it to, say, Victoria’s Secret or Poundstretcher? One imagines she’d have been OK with William Hill but how would she feel about a kebab shop?

But the implication is clear: King Charles doesn’t go in for this sort of scrutiny. On his watch, the banks of Windsor have closed. His majesty has failed to do his bit to halt society’s blind march towards a cashless economy.

I’m not convinced it’s his fault, though I agree there’s a problem. So does the GMB union. Its general secretary, Gary Smith, said last week: “Losing face to face services in more places throughout the country is a huge problem for many. The consequences are real and disturbing… These moves to use tech and digital as the primary way to do anything impacts on our older citizens and those poorer hardest of all.” He’s calling for paying in cash to be made a legal right.

For years I thought it was one. People used to talk confidently about “legal tender”. Scottish notes, they said, were “legal tender” so I could saddle up my high horse if anyone in an English shop refused to accept one. Then, recently, I started coming across the occasional trendy pub or overpriced bakery smugly proclaiming themselves cashless and looking down from their own metaphorical superiority stallions at my grubby tenner as if I were attempting to insert a non-biodegradable drinking straw into a turtle’s alimentary canal.

It’s spreading. I was discussing pocket money with parents at my daughter’s school the other day and there was general enthusiasm for giving children cards with money somehow “on” them in order to get them used to making electronic payments. That seemed bleak to me. The tangibility of the coin or note, the exciting jingly weight of a full piggy bank, eschewed in the name of making children accustomed to a new bloodless age of traceable financial transfer. I don’t see any point in that – it’s not as if paying by card takes ages to learn – except that it will enable more retail outlets to refuse cash.

In recent years the banks have moved swiftly to cut costs and so reduce our access to cash and, as a result, force more and more payments to be made electronically. Nearly 15,000 cash machines have been removed in the past five years; between 2019 and the end of this year 2,277 high street bank branches will have closed. This makes cash harder to acquire and it also makes it harder for businesses to deposit cash at the bank, further incentivising them not to accept it.

Does this matter? Isn’t cash just dirty and costly to hold and transport? What is the problem with doing everything electronically? Aside from Smith’s point about the elderly and less tech-savvy, it’s that this is a massive change in the way society is managed and we have not been consulted on it. There was no referendum on putting an end to cash. The banks, for whom no one has voted, are imposing this on us without having secured our consent. That is not how a democracy is supposed to work.

The downsides are clear: first, without cash, we have lost the technology for paying for things in a power cut. Is that because the banks think there’ll be fewer power cuts in the future? If they think that, they’re too stupid to look after anyone’s money. But mainly, it’s that digital payments are all traceable. There would be no anonymous spending of money. The unaccountable banks know everything we’re spending and the government can obtain access to that information. Is that good?

It is if you think that the only problem facing civilisation is money laundering. It makes money laundering harder; then again money launderers are pretty professional and I’d be amazed if they don’t find a way. But I struggle to see any other pluses. It potentially gives the state the physical power to stop us spending our money. Are we sufficiently convinced of the insuperable probity of our governmental system to be sure this power will never be misused?

Banks would also have that power and, as Nigel Farage’s spat with Coutts showed, are not above withdrawing their services capriciously. I don’t weep for his discomfiture but the notion of refusing someone an account because of their political opinions is horrific and all the more so when the expediency of a mattress full of bank notes is no longer viable.

The prime minister agrees that “it is right that people should have access to cash” but when asked whether businesses should be required to accept it as payment, he said, “I don’t think that’s appropriate”. Ah well. Perhaps we should ask the king.

There was no referendum on putting an end to cash. The banks, for whom no one has voted, are imposing this on us