UK Cash Supply Threatened in Lead-Up to Holiday Season

G4S is one of the most important players in the U.K.’s cash ecosystem.

Its subsidiary, G4S Cash Solutions, is one of only four companies that participate in the Bank of England’s Note Circulation Scheme (NCS) which provides a framework for the wholesale distribution of cash. NCS counts the Post Office, National Westminster Banks, and Vaultex UK as its other members.

As well as distributing notes to banks and ATM operators for the BoE, G4S serves retail clients by transporting their cash to and from banks. These include some of the country’s largest retailers such as Tesco, Asda, Aldi, Morrisons and Boots.

As a result of its central role in the U.K.’s economic landscape, G4S armored vans are often seen up and down the country carrying out vital services.

The firm’s employees, on the other hand, play an important role in ensuring British banks, ATMs and shop tills are properly stocked up, which is why a planned compensation-related worker strike on Monday (Dec. 5) involving 1,000 G4S security workers is prompting fears of cash shortages over the festive period.

The 48-hour strike certainly comes at a time when cash demand is typically higher than usual in the run-up to Christmas.

And as UK Finance’s annual report into the country’s payment landscape has observed, after years of declining cash usage, “the rate of decline is expected to slow as use becomes concentrated amongst people who have a strong preference for cash and in situations where cash has advantages over other payment methods.”

See more: Cash Holds Firm in Europe Despite Dwindling Hard Currency Supply

The latest threat to the U.K.’s cash infrastructure comes at a time the government is considering legislation to ensure access to cash in the face of nationwide ATM and bank branch closures.

With the report stage of the Financial Services and Markets Bill due to begin on Wednesday (Dec. 7), one of the bill’s central provisions is to give the Treasury and Financial Conduct Authority (FCA) a new mandate to protect access to cash services across the country.

Building on that assurance, the opposition Labour Party is set to table an amendment that will extend those protections to a range of in-person banking services, including opening new accounts, applying for loans, making and receiving payments and setting up standing orders.

And the U.K. is not alone. Elsewhere in Europe, lawmakers in Spain and Sweden have previously passed similar legislation to prevent banks from closing physical locations.

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