Would a cashless world be a better place, morally or fiscally? Matthew Taylor, in his relatively uncontroversial review of work practices and the ‘gig economy’ published on Tuesday, proposed that the £6 billion ‘cash in hand’ economy of payment for window cleaning, gardening, leaflet distributing and similar simple tasks should be regularised and brought into the tax net through the use of apps and other digital payment platforms. Would that really be a good thing?
The first point to be made is that it’s probably going to happen anyway over the next decade — at least if we go the way of Sweden. There, cards and phones are almost universally used, even for the smallest transactions. Shops prefer not to take cash and some banks don’t hold it or provide ATMs. Even donations to church collection plates are largely paid by phone, using a popular app called Swish.
But what’s striking about ‘cash in hand’ in a British context is its connotation of ‘Del Boy’ dishonesty. And what’s provocative about suggesting payment for casual work should always go through cyberspace is the assumption that this myriad of small, undocumented transactions would thereby be caught in the tax net, or become much more difficult to hide from it. In both respects, Taylor seems to say that cash tempts us to cheat, but fear of cyber scrutiny will make us behave better.
Well, try googling ‘cash in hand jobs’ and the array of dubious websites that pop up, inviting the gullible and hard-up to register for unspecified opportunities ahead, certainly illuminates one aspect of the problem. But a worthwhile thrust of modern tax reform has been to take more people at the lower end of the income scale out of the tax net altogether and it’s none of my business whether the bloke who occasionally mends my fencing should be registered for VAT and charge me accordingly — though given the turnover threshold for registration, I’d be surprised if he is. I’m as likely to be mugged for an expensive phone full of payment apps as for the multipurpose wad of cash I prefer to carry. Call me old-fashioned, but I’d say there’s really nothing wrong with honest cash for honest work: society will miss it when technology wipes it out, and government should not force its demise.
Ian Posgate, who has died aged 85, was the ‘Goldfinger’ of the Lloyd’s insurance market — the underwriter who hogged the best business to make fortunes for himself and the ‘Names’ fortunate enough to be part of his most profitable syndicates. And it was The Spectator that first put his nickname in print, as the caption to a cartoon portrait (alongside ‘Skinflint’s City Diary’) in 1971. I happen to know this because, when I first met him two decades later, Posgate immediately told me the precise issue date: he had a formidable memory for details, more usually those on the underwriting slips he stamped for the brokers who queued nervously at his box in ‘the Room’. Though he ran into various kinds of trouble and was eventually barred by the Lloyd’s committee, he was acquitted of criminal charges and remained a Name with unlimited liability until the end of his life.
When I interviewed him here long ago, I compared him to ‘a rather naughty character from an early Simon Raven novel, the sort you can’t help but like… a red-blooded maverick, [who] paid a heavy price for relatively minor indiscretions and a bad attitude’. That earned me a warning from my wise predecessor Christopher Fildes not to ‘let old rogues off too lightly’, but I don’t think Posgate — at least in his private kindnesses, and his willingness to poke the notoriously smug Lloyd’s establishment in the eye — was all bad.
The real problem was the institution itself. Once an example of the City at its nimble best, its formation of syndicates of wealthy Names to insure ships and their cargos was crowdfunding before that concept was invented, and gave London an early global lead in the insurance industry. But then it became a tax wheeze that attracted too many external Names who didn’t understand the risks and were too easily exploited by insiders. Worse, as Max Hastings once observed, Lloyd’s was the place where ‘all the stupidest boys at school’ seemed to end up working. Ian Posgate was far from stupid and there was no one else at Lloyd’s clever enough to control him.
More runways please
I take my hat off to hotelier Surinder Arora for coming up with a new Heathrow runway plan that, he claims, would be £6.7 billion cheaper than the airport’s own scheme, and a lot less disruptive during the construction phase. The £19 billion north-west runway favoured by Heathrow’s owners has just been through a 16-week public consultation ahead of parliamentary scrutiny and a final Commons vote some time next winter — by which time the current near-paralysis in Westminster is only likely to have got worse, so there’s no knowing how that vote will turn out. Put another way, the new runway is still deep in the long grass; we’re still years away from the day when bulldozers will start obliterating the village of Harmondsworth to clear the site, and there’s still everything to play for if you’re a clean-air protester or an MP with a constituency directly under the flight path.
If you’re neither of those but believe additional airport capacity is essential for London and the southeast, then the more alternative schemes there are in play, the better. The most sensible comment on the Arora proposal was (as so often) from Ryanair, which ‘strongly advocates taking politicians out of runway decision-making’ and sees no reason why Heathrow, Gatwick and Stansted should not all embark on new runway schemes competing to deliver what travellers, business and the economy really need. If that competition were allowed to happen, I suspect Heathrow’s is the one that would never be built.
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