Varying timeframes of commitments to two vital industry cash schemes underlines the need for government action. Here’s why.
Last month, our Chief Executive Anabel Hoult wrote to the UK’s eight largest retail banks, giving them a two-week deadline to guarantee their continued membership of schemes managed by ATM operator LINK and the Post Office, both of which are critical to protecting current provision of cash withdrawal, until legislation on cash is introduced.
Reassuringly, banks pointed to the importance of safeguarding the cash network for cash-dependent customers in their responses. There was also general agreement that both LINK and the Post Office have a crucial role to play in the short to medium term future, as well as affirmation to existing agreements.
However, all banks stopped short of explicitly committing to either schemes for the period until legislation is introduced, which is currently open-ended, largely due to the lack of clarity on the timing for the government’s plans to legislate.
As a result, we are concerned that the varying timeframes of their commitments underlines the urgent need for the government to act on its promise to introduce legislation protecting cash one year ago.
Worryingly, the government is still to set out its vision for the future of cash, including the scope and timing of legislation to protect access.
So while we are encouraged that some banks have set out their commitment to both schemes covering a period within which they expect legislation to pass, without clear direction from the government on the future of cash, it is unclear how long that pledge can reasonably remain in place.
Unprecedented strain on the cash system
The cash system has been put under unprecedented strain as a result of the coronavirus pandemic, making the need for longer term protections even more pressing.
There is a real risk that if clarity isn’t provided shortly, irreversible damage could be done to the UK’s cash infrastructure in the interim. If even one bank was to withdraw support from either LINK or the Post Office, with the latter’s agreement with banks ending at the end of next year, widespread cash access will no longer be viable.
This could leave many of the millions of people who rely on cash in the UK struggling to access their money.
That’s why we are now urging the government to publish its vision for the future of cash. This must include the steps that will be taken to develop and introduce legislation at the earliest opportunity.