Payment in Cash

Part of Orders of the Day — Wages Bill – in the House of Commons at 6:30 pm on 14 May 1986.

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Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 6:30, 14 May 1986

The Truck Acts, which the new clause would in part retain, give workers the right to be paid in cash. The Paymaster General recently described that method of payment as archaic and anachronistic. He meant that protection is not needed in his perception of modern-day Britain.

Most of the people who will be affected if the Bill is passed unamended will be lower-paid workers. They have the most to lose from such a transfer. All the costs of shifting from cash pay to bank transfer, and from weekly to monthly payments, will be borne by the workers, and all the benefits will be gained by the employers. It has been estimated that, especially in large companies, when the transfer to a banking system rather than a cash system is run through the Bankers' Automated Clearing Services Ltd—the chairman of the Conservative party has put the benchmark on that—every change would cut costs by £30 a person per year. In Committee, we heard some examples from Sheffield city council and British Telecom, which estimated savings of £31 and £35 per person respectively.

That will not be a one-off saving to the company, but an accrued saving every year. When the change from cash to bank payment is coupled with the change from weekly to monthly payment, especially in large companies, employers will effectively borrow workers' wages for four weeks, and leave it in their bank accounts to attract interest before paying it to the workers who have earned it. If workers are paid in arrears, the problem becomes worse.

I disagree with some of my comrades about the position of banks. I have just discovered that 7 million workers are paid in cash and that only half of them have bank accounts. The high street banks, considering the prospect of 3·5 million new accounts, must welcome this legislation because of the extra profits that those accounts would generate.