The Labour Government will not force businesses to accept cash payments despite growing concerns over the exclusion of vulnerable people, a Treasury minister has confirmed.
Earlier this week, Economic Secretary Emma Reynolds made the announcement during an appearance before MPs on the Treasury Committee in a blow to millions of cash users.
“We have no plans to regulate businesses – big or small – to compel them to accept cash,” Reynolds told the committee. The decision comes amid concerns about coffee shops, trains and leisure centres refusing cash payments.
Reynolds faced questions from MPs about those who rely on cash, including victims of domestic and economic abuse who testified that cash provided their only escape route.
Some had reported being unable to pay for their children’s school dinners with cash. While cash remains legal tender in the UK, businesses are not required to accept notes and coins as payment.
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The Government has confirmed shops will not be forced to accept cash in a blow to millions
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The decision has sparked fierce criticism from campaigners. Martin Quinn, the director of the Campaign for Cash, called the Treasury’s move “a slap in the face for cash.”
“Millions of cash users are being ignored, and if you want to use cash this Government are basically saying you are a second-class citizen,” Quinn argued.
“All of this plays into the US credit card companies and payment giants who are making millions of pounds of profit at the expense of individuals who want to use cash and shops and businesses who are at the mercy of ever-increasing card fees,” he added.
Despite the shift towards digital payments, cash remains significant in UK retail transactions. According to the British Retail Consortium (BRC), notes and coins were used in a fifth of shop transactions last year.
Martin Quinn, pictured speaking to Nigel Farage, is Campaign Director of the Payment Choice Alliance
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This marks the second consecutive year of increased cash usage, following a decade of decline. Card payments continue to dominate consumer spending, with smartphones becoming an increasingly popular payment method.
However, many shoppers have returned to using cash to help them budget more effectively. The Treasury Committee is expected to make recommendations on cash acceptance in the coming weeks, following its inquiry into the matter.
Constantine Louis, 84, highlighted the importance of cash for elderly people after giving evidence to the committee. “For older people, when they use cash, they feel as though they are in control,” he told the BBC from his one-bedroom flat.
He warned that today’s younger generation might face similar challenges in the future. “Young people will get older one day and may have the same problems we have – they may start forgetting their Pin numbers.”
The impact on disabled people was also highlighted by Edinburgh resident Caroline Cawley, 41. “Cash is important for budgeting reasons, mainly. It is much easier to keep tabs of what you’ve got if you have it physically in your purse,” she said.
Cawley warned that digital payments risked pushing her into overdraft, leading to unmanageable fees. She described the inability to pay cash at her local leisure centre swimming pool as creating “a two-tier society”.
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Treasury minister Emma Reynolds has confirmed the Government will not force businesses to accept cash
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The UK’s approach contrasts with other nations’ policies on cash acceptance. Australia, for instance, is planning to introduce rules requiring essential services to accept cash payments.
However, Reynolds told MPs the UK was “not anywhere near” becoming a cashless society. She noted that convenience stores plan to continue accepting notes and coins for years to come.
According to the minister, the Government’s focus remains on ensuring access to cash through initiatives such as new banking hubs. Reynolds emphasised that improving digital skills was also a priority for those who might struggle with electronic payments.
The Treasury has emphasised that it is working to tackle digital exclusion while maintaining cash access for those who need it.
