Cash protected and tampon tax scrapped

● Budget will promise legislation forcing banks to ensure there is access to cash

Next week’s budget will promise legislation to protect access to cash and abolish the socalled ‘tampon tax’, the Treasury has confirmed.

Chancellor Rishi Sunak will commit the government to ensuring vulnerable groups and isolated rural communities across the UK can access cash when they need it, amid growing concern about the loss of bank services and cashpoints.

And a longstanding aim of abolishing VAT on women’s sanitary products will be achieved when the UK’S postbrexit transition phase ends in January 2021, Mr Sunak will say. The Treasury is expected to start talks with the banking industry and regulators around legislation to protect access to cash immediately after the Budget on 11 March.

The UK will follow international examples like Sweden, where large banks are required by law to provide customers with facilities for withdrawing cash.

As well as new powers for regulators, Ministers will ask banks to create a system for moving money around the country, so cash remains accessible for those who use it every day.

Around two million people in the UK still rely on cash for their day-to-day spending with three in 10 payments still made using notes and coins.

Butconsumergroupwhich? has warned that 9,000 free cash machines and 1,200 bank branches have disappeared in the past two years.

“If things carry on as they are, cash as we know it will cease to exist in just two years,” Which? said in a letter to the Chancellor.

Mr Sunak will also announce that a zero VAT rate will apply to sanitary products on January 1, the first day EU laws no longer apply to the UK.

The Treasury estimates the move will save the average woman nearly £40 over her lifetime, with a cut of 7p on a pack of 20 tampons and 5p on 12 pads.

While the EU has been working to give member states the ability to scrap the tax, successive UK governments have committed to abolish it.

Critics have long criticised the tax for contributing to “period poverty”, where sanitary products are pushed out of reach because of their cost.

The UK currently uses the revenues raised to fund charities which aid vulnerable women, with £62 million having been allocated since the scheme was launched in 2015.

Meanwhile, the government has faced criticism over delays to its long-awaited National Infrastructure Strategy.

The £100 billion investment tackling the climate crisis and boosting transport connectivity had been set to be published alongside the Budget.

But Whitehall sources have conceded it will now be delayed by a number of days or weeks.

Labour’s shadow chancellor John Mcdonnell said the hold up represented “absolute chaos” in government.

“We are facing the threat of climate change and an economy at risk of recession. That’s why we desperately need an immediate start to large-scale infrastructure investment,” he said. “Delaying implementation of investment is unacceptable.”