What should councils do to help revive high streets where shops and pubs are closed or struggling? First they should do no harm. Or, try to do less harm. Business Rates are a terrible burden which councils could and should ease. A more modest but still positive impact is to allow more shops to install cash machines (or "Automatic Telling Machines.")
If people can easily get hold of cash for small transactions – for a newspaper, a pint of milk, a loaf of bread, a bottle of wine – they are more likely to use their corner shop. 91% of transactions under £25 are in cash.
The attitude of planning officers to more of these machines is often unduly negative. The machines seldom have long queues so the notion that the pavement will often be blocked with crowds is unreasonable. Similarly the idea that they inspire a large amount of illegal parking is exaggerated. There should be some sense of proportion with these objections put against the benefits to local small businesses.
Some say that cash is out of date. But there is still a lot of it about. £180 billion of the stuff is taken out of cash machines a year. Many of the machines operate independently of banks. Indeed if banks were the only places to get money it would be very tiresome. According to the Campaign for Community Banking Services more than 7,500 branches have closed since 1990 – nearly half. The number is still falling.
It is also a mistake for extra Business Rates to be imposed on shops hosting the machines. At present, this happens on around 10% of 5,000 machines belonging to Bank Machine Ltd. The Business Rates charged range from £200 to £12,500 a year. Any extension of Business Rates would mean many of their machines would not be viable and would have to close. Or more would have to be charged for their use. At the moment 97% of machines don't charge. This is because of the Link system. So if I take money out of a independently operated cash machine I (usually) won't be charged – although (in my case) NatWest will be.
Any increase in the "tax on cash" would only put more pressure on small shops that overwhelmingly rely on cash transactions. Even in a city this increased extra convenience has an impact – for village shops it is vital.
From a council's point of view there is the irresistable chance to raise extra revenue. But this is a short term way of looking at it if they are emasculating local economic activity.
These are the anti enterprise councils who, according to independent operators, are the most enthusiastic about taxing cash and punishing their high streets:
Brighton & Hove CC
Brighton & Hove CC
Welwyn & Hatfield Council
Royal Borough of Kingston upon Thames
Isle of Anglesey County Council
Derby City Council.
Shopkeepers are less keen on us using Visa or MasterCard on small transactions due to the higher charges. This ultimately means the customer pays more. What about old people who are used to using cash and don't have credit cards? What about the poor who use cash for a higher ratio of their spending and often find it easier to budget than with credit cards?
Cash machines can also be used for topping up cards and making charitable donations. Having them scatterered far and wide helps the viability of local communities. Councils should not be punishing shops which seek to offer them. For councils to tax cash and then splash the money around on gimmicks is a net loss to the high street. It is rather like the EU subsidising tobacco and spending money on anti smoking campaigns. As Dan Hannan said it becomes explicable if you have a government wanting to interfere for its own sake – "it is really about power."