We are currently in Committee Stage of the Financial Services and Markets Bill in the House of Lords – examining this important legislation clause by clause, line by line, debating the principles, highlighting concerns and suggesting changes. On the seventh day of this process (7th March 2023) I introduced four amendments, all with the intention of improving meaningful access to cash – which also means ensuring acceptance of cash – as well as accessible and secure cash infrastructure – and access to financial services including digital financial services.
Amendment 186 would require the government to commission a review into the “accessibility of financial services and financial products”. A straightforward proposal, it simply means that the tools that we use to access, spend and manage our money should not exclude by design. Amendment 187 seeks to ensure access to banking services – particularly continuity of service – for areas where only a single bank branch remains. Amendment 189 would require the Government to designate the UK cash infrastructure as Critical National Infrastructure. Finally, amendment 239 would require the Government to commission a review into access to digital financial services. It would follow on from and adopt similar but not identical aims to the Access to Cash Review, published in 2019.
The full text of amendment 186:
Insert the following new Clause—
“Accessibility of financial services and financial products
(1) As soon as reasonably practicable and within three months of the passing of
this Act, the Treasury must commission a review of the accessibility of
financial services and products throughout the United Kingdom.
(2) The review must consider but is not limited to—
(a) automatic teller machines,
(b) point of sale terminals,
(c) card payment machines, and
(d) internet-based and mobile platforms and products.”
I illustrated the thinking behind this amendment with an example. For years, card payment machines were accessible. They had raised numbers and a dot in the middle of the “5” key so I could use those machines independently – inclusively and accessibly. Recently, there has been a worrying and extraordinary rise in the use of flat-screen card payment machines. They are impossible for me to use. They are impossible for millions to use. I am a huge advocate of technology as an enabler, and of fintech in particular. Progress into a digital future, though, must not mean that products and services that were previously accessible become inaccessible. A nudge from the government on such an important aspect of UX would be hugely valuable.
Similarly, the government must do more to mitigate the adverse consequences of bank branch closures. Thanks to the Access to Cash Review we have an excellent policy initiative in the form of shared banking hubs. But these hubs are not being rolled out at the same pace as bank branch closures and my amendment is focused on ensuring access to banking services on every high street.
The full text of amendment 187:
“Access to banking services
(1) Within one year of this Act being passed, the Treasury must prepare a policy
statement to achieve the objective that every high street above a number of
shops determined by the Treasury has a bank branch or shared banking facility
of a description as set out in subsection (2).
(2) Each bank branch or banking facility must provide services including but not
(a) access to cash including deposits as well as withdrawals,
(b) basic banking services for individuals, and
(c) basic banking services for small and medium-sized businesses.
(3) The Treasury must lay the policy statement before Parliament, and must take
all reasonable steps to implement it.
(4) No bank may close a branch on a high street unless there is a shared banking
facility on that high street of a description set out in subsection (2).”
Since the Financial Services and Markets Bill entered Parliament on 20 July 2022, 390 bank branches have closed. During the debate I asked if the Minister could say how many shared banking hubs have opened in that time.
My broader objective with this amendment is to address the issue of acceptance of cash. Part 2 of the Bill is concerned with preserving access to cash and I applaud the government’s efforts in this area but ensuring access to cash is but one side of the coin. Increasing opportunities to access cash – such as cashback without purchase – is positive but it quickly becomes meaningless if you can’t use it to pay for goods. There are a number of ways in which one could have gone about trying to assure cash acceptance, such as imposing an obligation on retailers or on those of a certain size or kind, or on retailers offering a particular service. One of the major issues with acceptance of cash, specifically for small businesses, is what they do with that cash once they have it. In fighting for the right to continue using cash we must ensure it does not become burdensome and expensive, particularly for small and micro-businesses. It cannot be that such businesses have to spend an hour at lunch or the end of the day potentially closing their premises to drive to the next town or village to deposit the cash.
This question of cash infrastructure brings us neatly to another reason I believe we need to think much more seriously about protecting it. The full text of amendment 189:
Insert the following new Clause—
“UK cash network: critical national infrastructure
(1) Within six months of the passing of this Act, the Treasury must designate the
UK cash network as critical national infrastructure.
(2) “UK cash network” means the infrastructure to make available cash access and
distribution services throughout the United Kingdom by financial service
I firmly believe we can move positively to a digital financial future where everybody is included. It is one heck of a transition, but I believe we can get there. Even when we reach that point, for reasons of reliance, there may well still be a need for cash. The level of the cash network could be determined by the Government, but having a cash network would seem to be a thoroughly good idea for reasons of resilience. I am reminded that on 11th September 2001, when Alan Greenspan (then Chairman of the Federal Reserve Bank) heard of the terrorist attacks on the World Trade Center and the Pentagon, his immediate thought was the US federal money transmission system. As he said “We’d always thought that if you wanted to cripple the US economy, you’d take out the payments system.” We must consider the current geopolitical circumstances we find ourselves in and whether we need to classify the cash network as critical national infrastructure.
Finally the full text of amendment 239:
Insert the following new Clause—
“Access to digital financial services: review
(1) Within three months of the passing of this Act, the Treasury must commission a review of access to digital financial services.
(2) The review must consider, but is not limited to—
(a) the levels of access that individuals and small and medium-sized enterprises have in relation to—
(i) digital payments, and
(ii) mobile and internet applications and platforms;
(b) the level of digital skills needed to enable digital financial services transactions to be undertaken;
(c) the levels of broadband and mobile connectivity needed to support digital financial services transactions.
(3) The review must consider the barriers to individual and small and medium-sized enterprises in accessing digital financial services and publish recommendations on how these will be addressed.”
As I said previously, I firmly believe we can move positively to a digital financial future where everybody is included but it is, undeniably, a heck of a transition which is why I am asking the government to consider an access to digital financial services review. This is critical and timely. It would build on the good work done by the Access to Cash Review published in 2019 and leading to many of the elements of part 2 of this Bill dealing with access to cash. This ‘digital’ review would have many of the same aims, but in no sense the same specificities. If the logic was good for an access to cash review, which I believe it was, it must now be good for a further digital review. I suggest that the review should look at issues around access to digital payments, online platforms, mobile applications, skills and, crucially, connectivity.
The direction towards digital is clear, but if we abandon cash we will be unacceptably abandoning significant sections of the public. Cash still matters, and it matters materially to millions.
And the digital future is, similarly, too important to leave to the few. Secure, resilient infrastructure, access to cash protected, and financial services and products, digital or not, accessible to all. I hope the government will seriously consider these amendments and I have no doubt we will revisit them during report stage.