Ministers take knife to EU’s red tape with new plan to keep cash in society

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It is one of a number of measures at protecting the UK’s cash system. Such a move will be a huge boost to millions of Britons who rely on notes and coins for their everyday spending. Current EU laws make it difficult for businesses, particularly local corner shops, to offer the service when people are not paying for goods, meaning many choose not to do it. The Government is now considering scrapping these rules once the Brexit transition period ends on December 31.

John Glen, the Economic Secretary to the Treasury, said: “We know that cash is still really important for consumers and businesses – that’s why we promised to legislate to protect access for everyone who needs it.

“We want to harness the same creative thinking that has driven innovation in digital payments to maintain the UK’s cash system and make sure people can easily access cash in their local area.”

During the Budget in March Chancellor Rishi Sunak announced that the government would legislate to protect access to cash and ensure that the UK’s cash infrastructure is sustainable in the long-term.

It now wants to hear views on this legislation from consumer organisations, businesses, financial institutions, ATM providers and payment services among others, through its call for evidence.

The new proposals include putting the Financial Conduct Authority (FCA) in charge of ensuring that the cash system benefits both people and small and medium sized businesses, given the role that the regulator already has in protecting consumers.

Under the current system, several organisations have a role to play in maintaining the cash system.

As well as the FCA, these are the Bank of England, the Payment Systems Regulator (PSR) and the Treasury.

The Government said there may be benefits to giving a single authority overall responsibility for setting requirements to meet the cash needs of consumers and SMEs.

There have been signs that the coronavirus crisis has accelerated the decline in cash use, with the payment limit on contactless cards, an alternative way to pay, having been raised to £45 in April.

ATM use declined sharply around the start of the lockdown as people’s usual habits changed.

But many people still rely on cash for their everyday needs, and bank branch and ATM closures have fuelled concerns about communities being cut off from cash.

Last year, consumers received £3.8 billion of cashback when paying for items at a till – making it the second most used method for withdrawing cash in the UK behind ATMs.

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