Although the Government has belatedly tried to protect cash as a payment of choice, the march towards a cashless society continues apace.
A few days ago, I was contacted by Jim Storey who eloquently detailed the hurdles that his local Lions Club is facing in ensuring it can continue to accept cash payments and donations from supporters of its various fundraising events. At every twist and turn, it is being thwarted. And by being pushed into only taking contactless payments, this is eating into the money it uses to help good causes.
Jim, 69, is a member of the Lions Club of Fleet in Hampshire. Through the organisation of a number of events in the town, the 50-strong club raises around £50,000 a year. Its next big event is a fireworks spectacle – the Fleet Lions Firework Fiesta – on the fourth of next month.
‘It’s going to be a cracker,’ says Jim, who retired from the Environment Agency four years ago. ‘We will have light-up toys on sale for the kids and let off £5,000 worth of fireworks into the night sky. It’s a night when the community comes together.’
Yet it is not going to be quite the financial cracker it could be.
Money matters: The Lions Club of Fleet has reluctantly had to make its events cashless
As a result of the closure of the town’s HSBC branch – the bank Fleet Lions uses – the club has had no choice but to rethink the way it organises its events.
When it was still open, cash takings for a big event like Guy Fawkes night could be quickly deposited in the branch’s night safe. But with that option now denied, it means banking any cash at the HSBC branch in Farnborough.
Fine, given it’s not a million miles away, yet a recent change in the classification of the Lions account by HSBC means any cash deposits or withdrawals attract a 1.5 per cent charge.
As a result, Lions Club of Fleet has reluctantly had to make its events cashless. So, for its fireworks night, tickets can primarily only be purchased online in advance, which incurs a charge, or by contactless card in the town on the three Saturdays leading up to the fiesta.
Furthermore, the event is totally cashless (a float of £2,000 from the bank would cost £30) which means anyone wanting to buy mulled wine (Lions Gluhwein) or anything from the barbecue must pay by contactless card.
‘What jars,’ says Jim, ‘is that the payment machines and the online ticketing system we use charge on a percentage of takings basis. So for our recent Beer Festival in August, we made a profit of £8,000 instead of £9,000. Of course, that means less money going to local good causes.’
Having spent time over the summer in both northern Spain and France – where bank branches are proliferating rather than shrinking in number – Jim asks a good question. ‘If bank branches can thrive in these two near neighbours, why are they disappearing down the pan in the UK?’ Why indeed. Answers on a postcard to me at: 9 Derry Street, London W8 5HY. Or email jeff. [email protected].
- Details on the Fleet Lions Firework Fiesta can be obtained by visiting: fleetlions.org.uk.
Crisis or not, Metro still stands apart
As some colleagues like to remind me, I am a long-time supporter of Metro Bank. I enthusiastically welcomed its launch 13 years ago – the first new high street bank in the UK for more than 100 years. Today, its continued emphasis on customer service par excellence still stands it apart from the banking madding crowd (with the possible exception of building society Nationwide).
Unlike most rivals, Metro welcomes customers when they walk into a branch: they are not immediately steered away from the counter and directed to an ATM or a cash (cheque) deposit machine – or told to go online.
I know because I have a current and savings account with them and occasionally pop into its branch (one of 76) on Kensington High Street in London to deposit a cheque that my mum has sent me. I am always greeted with a smile. Its online service, which I use to make transfers between accounts, is also slick.
Brash: Metro Bank founder Vernon Hill with his terrier Duffy
Yet Metro 2023 is a different animal to the one back in 2010.
Thirteen years ago, it started with a relatively clean sheet although American founder Vernon Hill did have history in the United States for rubbing up banking regulators the wrong way. Hill was brash, knew how to sell the Metro brand (free pens, free cash conversion machines) and talked the talk. He was also a skilled networker. I remember one night dining with him, his wife Shirley, dog Duffy (yes, a canine) and future Chancellor Kwasi Kwarteng long before anyone other than his constituents knew who he was. I didn’t get a word in all night – Kwasi, said Hill (a staunch republican), was destined for political greatness.
Mmmm. A year ago, almost to the day, Kwasi’s short reign as Chancellor was brought to an abrupt end as financial markets went into meltdown in response to his mini-Budget.
Today, Metro is mired in its own financial miasma – a result of grave financial errors made in 2019. Hill has long gone and although chief executive Daniel Frumkin has tried to steady the ship, it keeps needing to shore up its finances. A few days ago, facing a financial abyss, it received a £325 million injection of new capital while refinancing £600 million of debt.
Although Frumkin is determined to make Metro the country’s number one community bank and is keen to open more branches, he is facing an almighty challenge.
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For the time being, customer confidence remains. Yet, if depositors get spooked, as Northern Rock customers did at the start of the financial crisis, Metro’s days as an independent bank could be numbered.
The big difference between now and 2008 is that the Financial Services Compensation Scheme is far more generous towards depositors when a financial institution goes belly-up, offering £85,000 protection. This should deter Metro customers from making a run for the exit doors. I do hope Metro survives its latest crisis. We need banks – and building societies – that support the high street and communities.
Curse of rocketing insurance premiums continues
Thank you for all your emails on the curse of rocketing car and home insurance premiums. Please keep them coming. Among the recent batch to pile into my inbox is one from James Robert-Poulain, a 75-year-old retired scaffolder from Bexhill-on-Sea in East Sussex.
James has just seen Liverpool Victoria try to increase the cost of his annual home insurance by 76 per cent. This is despite another year of no-claims discount. He wasn’t having any of it and shopped around for a better deal.
His view is cynical (which I like). James believes the Government is allowing insurers to jack up prices because it means more revenue from the 12 per cent insurance premium tax it applies to home, car and pet cover. James says: ‘The UK has become the stealth tax capital of the free world. What is really frightening is how all the main political parties are seeking to increase the tax burden on our good selves. Don’t they know our pips are not just squeaking – they’re screaming?’ Bang on the nail.
