Morals Guv’nor?

[Dave Birch] Is it immoral to pay someone in cash? At Mobile Money Services in Africa in Johannesburg, Brian Richardson from Wizzit said that he refuses to pay anyone in cash, from employees to domestic staff. This reminded me of a conversation at a bank a few weeks ago. I was talking about Faster Payment Service (FPS) and I mentioned that I’d found it an excellent service for paying builders who were working on my house. On of the other attendees told me that he’d been going down to his local bank branch and drawing out £50 notes in bundles of £2,000 at a time and paying his builders in cash, for which he got a substantial discount. I said, partly just to spark a discussion, but partly because it does bother me, that he should be reported to the police and prosecuted for conspiring to evade VAT and income tax (since that is why the builders want cash).

My objection is that by helping other people to evade tax, the person in question was making me pay more tax: the use of cash facilitates the transfer of wealth from the law-abiding (eg, me) to the law-breaking (eg, his builders). This seems immoral to me. So I can’t resist posing it as a general question.

I’m looking forward to discussing some pros and cons around cash at the European Financial Management and Marketing Association (EFMA) conference on Cash Processing in Paris on 14th/15th October 2010. Consult Hyperion are media partners for the event, and our good friends at EFMA have given me a two-day delegate pass for the event — worth approximately TWO THOUSAND FOUR HUNDRED EUROS plus VAT — to give away on this blog as a competition prize. So if you are going to be in Paris on those dates and you’d like to come along and join in the debate, all you have to do is be the first person to respond to this post with the name of the paper money, backed initially by the value of confiscated church land, issued by the French National Assembly in 1790. By the way, here’s the EFMA perspective:

In 2009, euro banknotes in circulation grew by 6% to reach € 806 billion in December; this followed the exceptional growth of 13 % experienced in 2008 in the wake of the financial crisis. In these times of high financial uncertainty, cash remains an element of stability and contributes to consumer confidence in the financial system.

[From EFMA – Upcoming event]

Stability and consumer confidence? Well, that’s one explanation I suppose. Only the churlish would suggest that personal and corporate tax evasion might be another reason. But I digress. In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family, is void where prohibited and has no unfunded pension liabilities. The prize must be claimed within three months. Oh, and no-one can win more than one of the Digital Money Blog prizes per calendar year.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]