The UK Government has been accused of “sitting idly” as banks close making access to cash difficult for struggling Scots.
In its response to a report by the Scottish Affairs Committee, the UK Government acknowledged the importance of cash transactions for millions.
However, the committee, chaired by SNP MP Pete Wishart, said the response is disappointing as it rejected recommendations to help half a million Scots in accessing and spending their cash.
It comes as the Post Office recently confirmed its branches handled the highest volume of cash in August for five years due to the cost-of-living crisis and more people relying on cash for budgeting.
READ MORE: Scottish retailers face tough Christmas as inflation rises wipe out real-terms sales growth
Despite the resurgence of cash usage, 53% of Scotland’s bank branches have closed since 2015 – the highest loss percentage across the UK.
The committee recommended the Government approach the Financial Conduct Authority (FCA) to investigate and monitor cash acceptance levels before considering what further access was required.
The UK Government said it was for individual businesses to choose whether to accept cash or not.
The response said: “The Government recognises that the ability to transact in cash remains important to millions of people across the UK, and engages closely with the financial regulators to monitor and assess trends relating to cash.”
It added: “Nonetheless, the Government’s view is that it should remain the choice of individuals and organisations as to whether to accept or decline any form of payment, including cash or card. This may be based on factors such as customer preference or cost.”
The Scottish Affairs Committee also said it remained unclear how legislation, through the Finance Service and Markets Bill, will interact with industry initiatives to safeguard access to cash, such as Link financial inclusion programme, which aims to provide free-to-use cash machines even in rural areas.
Mr Wishart said: “This Government is sitting idly by as bank branches sped up closures to dodge any meaningful protections on accessing cash.
“With the cost-of-living crisis likely to get worse as we approach the winter and rising energy bills, more people are likely to be accessing cash for budgeting purposes.
“Yet the Government remains intent on sticking with the status quo of an increasing cashless society.
“While the then-Treasury minister John Glen told our committee that a more detailed picture of cash usage in Scotland would be helpful, the Government rejected our recommendation to task the FCA with such an investigation.
“This could have provided useful data to inform necessary protections to ensure those using cash are not disadvantaged.
“The Government’s response is disappointing and I hope the new administration will reconsider its approach.”
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free .
