A Conservative former cabinet minister has warned the Government that cash must be protected as the Chancellor confirmed plans to raise the limit on contactless payments to £100.

David Mundell told the Commons that whilst increasing the cap for tap-and-go card spending from £45 “will be welcomed by many”, the Government risks plunging the country into “a cashless society” without introducing protection for physical forms of legal tender.

Calling for “legislation and plans” to ensure cash remains a viable payment method for consumers, the former Scotland secretary warned that eight million adults in the UK would “struggle” if it disappeared.

His comments came after Chancellor Rishi Sunak announced in Wednesday’s Budget statement that the limit on a single payment using contactless card technology will rise to £100 later this year.

Less than a year ago the cap was raised from £30 to £45.

Speaking in the Commons debate on the Budget, Mr Mundell said: “It was announced this morning that contactless payments would be increased to £100 which I am sure will be welcomed by many, but what the Chancellor did not reference this year which he did in his last Budget was the operation of the UK cash system and his plans to legislate on access to cash.

“Our system of cash faces three big issues: the ongoing issue of access, the inverse issue of depositing cash and the increasingly pressing problem of acceptance of cash.

“The issue of acceptance of cash has been made more acute by the pandemic.

“The Bank of England noted in its quarterly bulletin that 42% of people had recently visited a store that would not accept cash.

“And Which? conducted a survey which found four in ten of those who experienced difficulties paying with cash had left empty-handed when trying to buy groceries.

“Therefore, it is absolutely essential that the Government come forward with legislation and plans on this issue.

“Without that, we risk crashing into a cashless society where some 17% of adults in the UK, around eight million, would struggle.

“And those struggling most would be the elderly, the vulnerable and economically excluded and those in rural communities such as my Dumfriesshire, Clydesdale and Tweeddale constituency.”