On 5 December 2013, the then Chancellor George Osborne delivered his autumn statement to the House of Commons, stressing the need for less tax evasion. But one of his decisions appears to have tripled one type of evasion, losing the government around £70m in tax every year.
This was not the intention of abolishing paper tax discs for vehicle excise duty. The Treasury presented the move, which came into force from October 2014, as “a visual symbol of how we are moving government into the modern age and making dealing with government more hassle free”.
The government said businesses would save £7m a year in administration, but did not predict any changes in vehicle excise duty evasion, which would in future be enforced by automatic numberplate recognition cameras checking a central database.
However, roadside surveys suggest the evasion rate has risen from 0.6% of vehicles in 2013 to 1.8% in 2017, with estimated lost revenue up from £35m to £107m. The paper discs, which allowed anyone to check if a vehicle was taxed, appear to have been of some use after all.
When it comes to reading for pleasure, paper still seems to beat digital. Despite electronic books having been available and heavily promoted for several years, 67% of Americans read printed books in 2018 up from 63% in 2015, while those reading e-books actually dropped from 27% to 26%, according to surveys carried out for the Pew Research Center.
In the professional world, many organisations continue to pursue the concept of the paperless workplace, an idea that has been around for at least four decades. But should organisations aim to scrap paper altogether, or are there situations where it works better than digital options?
International development charity Oxfam designs its mobile IT to work in extreme circumstances. However, it still retains paper data collection as an alternative. “We have a mobile survey toolkit, and the first question is ‘should you be using mobile?’,” says Amy O’Donnell, digital in-programme lead for Oxfam. “There are times when it’s too sensitive or not right to be collecting data with a mobile phone. We always think about paper back-ups and we always think about the context.”
The charity might use paper for interviews on sensitive topics; where people are worried about government surveillance through technology; or where governments restrict its use. “Technology needs to enable, and where it’s not appropriate, we need to be brave enough to say we won't use it,” says O’Donnell.
Some of the same justifications apply to UK police forces, whose officers continue to use paper notebooks for their official records. Edward Whittingham, managing director of security training company The Defence Works and a former police officer, says that writing with a pen in a police notebook is easy and practical in most environments.
Furthermore, police officers are trained to write notes in a structured, standardised way as they are often used as legal evidence in courts, and the notebooks are designed to be tamper-proof.
There are obvious disadvantages to paper notebooks, including the time it takes to retrieve them from storage, Whittington says. But he adds that any digital system connected to the internet can be compromised – something not true of notebooks.
“There’s a risk-reward situation,” he says of choices between paper and digital, and some organisations have got into a habit of moving things online without considering the consequences. “We shouldn’t blindly go digital because it’s the thing to do,” he says.
Going digital blindly
But for government in particular, going digital often has become the ‘thing to do’ to demonstrate modernisation. In the same year that George Osborne abolished tax discs, then-health secretary Jeremy Hunt told the National Health Service to go paperless by 2018. It didn’t, and the date has since been pushed back, with government adviser Dr Robert Wachter saying NHS trusts “should be largely digitised by 2023” in his 2016 review.
There are good reasons for healthcare organisations to move patient records from paper to digital systems, according to Mark Singleton, an acting associate director of IM&T at Wrightington Wigan and Leigh NHS foundation trust.
In 2016, the trust introduced electronic patient record (EPR) software from Allscripts in many of its wards, providing a single source of data on patients. This also allows automated analysis, with the trust using software from Qlik, initially bought for financial analysis, to forecast staffing requirements in the trust’s accident and emergency (A&E) ward based on previous demand, given factors including weather and day of the week.
But Wrightington Wigan and Leigh’s initial attempt to digitise A&E in 2017 failed. As well as moving the department to the EPR it also tried to increase data collection for the nationally-mandated Emergency Care Data Set, and did so at a time of heavy demand. “We patently tried to bite off too much in one go,” says Singleton. “Our performance nosedived.” The trust postponed the move, and later succeeded in moving the department to Allscripts in a more focused project. But changing the way an organisation operates by moving it from paper to digital is usually a difficult and risky job – it should not be done lightly.
“Our ultimate goal is to remove all paper, but there are definitely challenges in doing that,” says Singleton. The trust plans to move out-patient services from paper to the ERP, something made more difficult by a wide range of different forms and practices across medical specialities. The key, he says, is to involve healthcare professionals in what will inevitably change the ways they work and provide a lot of support during the move.
And some things may remain undigitised, such as the trust’s old paper records. Singleton says the UK’s Independent Inquiry into Child Sexual Abuse means that public-sector organisations need to retain original records, so while scanning could allow quicker access they would still need to keep the paper, cutting any savings.
The trust is also happy to handle paper from other organisations – or its own clinicians, if they want to explain something to a patient by drawing a diagram – by providing desktop scanners. And while it is looking at installing digital screens in wards to provide real-time information based on the EPR, “it leads us to reflect on how quick a traditional whiteboard can be,” Singleton says.
One particular shift from paper to digital – that of money – is causing serious concerns. Physical cash (paper or polymer notes and coins) was used for 40% of UK payments in 2016, down from 62% a decade earlier, according to industry body UK Finance. It predicts this will fall further to 21% in 2026, but so far only a few businesses that customers physically visit have tried banning physical money.
Sweden is much closer to becoming cashless. Seven out of 10 Swedes say they can do without physical money, which now only accounts for 13% of payments, according to research by Sveriges Riksbank, the country’s central bank.
Half of all merchants expect to stop accepting cash by 2025, and furniture chain Ikea no longer accepts cash at its branch in Gävle ahead of a possible nationwide banknote ban.
Individual customers and businesses may see digital payments as safer, but those responsible for the financial system take the opposite view.
“If banknotes and coins have had their day, then in the near future, the general public will no longer have access to a state-guaranteed means of payment, and the private sector will to a greater extent control accessibility, technological developments, and pricing of the available payment methods,” wrote Riksbank governor Stefan Ingves in an article for the International Monetary Fund (IMF) in June 2018.
There are several reasons. Digital spending flows through a handful of giant processing companies including Visa and Mastercard, joined in Sweden by Swish, an app for person-to-person transactions, and iZettle, an app and card-reader system used by small businesses.
Bernardo Batiz-Lazo, professor of business history and bank management at Bangor University, says their fees are disguised by the fact that sellers are banned from charging different amounts based on payment method. “We don’t have, as consumers, transparency of using alternative forms of payment,” he says.
Central banks could undercut the power of these companies by taking over digital transactions, according to the IMF’s managing director Christine Lagarde. As well as the concerns mentioned by Ingves, in a speech in November 2018, she worried about how individuals might be judged on their spending records, such as if financial providers decided that beer and pizza fans were bad at paying bills.
“What can you do if you have a craving for beer and pizza but do not want your credit score to drop? Today, you pull out cash. And tomorrow? Would a privately-owned payment system push you to the broccoli aisle?” she asked.
In such a system, Lagarde said that central banks would authenticate user identities and record transactions but would not disclose these except when legally required to do so. “So when I purchase my pizza and beer, the supermarket, its bank and marketers would not know who I am,” she said. “The state might not either, at least by default.”
This would not remove other problems, however. The Bank of England is worried about centralised digital payment systems failing, potentially freezing sections of the economy in a way not possible with physical currency.
The bank’s chief cashier Victoria Cleland has said paper money’s role as a back-up to digital may become increasingly important: “The public expectation for cash infrastructure to be available for contingency purposes may remain unchanged, even if digital payments become more prominent in day to day transactions,” she wrote in response to a HM Treasury call for evidence in May 2018.
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There is also the risk of leaving people behind. Cleland wrote that 2.7 million Britons are entirely reliant on cash, which does not require the bank account, payment card or mobile device needed for digital payments.
Digital cash cannot usually be used without a network connection, potentially excluding some in rural areas. For these reasons among others, some in both Sweden and the United States are protesting against businesses that do not accept cash.
And for those who have a choice, physical cash often remains the better option that is easier for individuals to control than digital alternatives. “People who choose to use cash do so for a range of reasons including because it is a useful budgeting tool, it is quick and easy to use and because it works when other methods do not, for example when card terminals fail,” said Cleland.
While it is easier to steal physical money from individuals, Professor Batiz-Lazo says that it is increasingly hard to steal in large quantities, as cash machine and bank security has improved.
Meanwhile digital fraud has soared in value, and an economy reliant on digital payments would be more vulnerable to criminals and cyber-attacks from hostile countries: “IT is not perfect. It is not a gift from God. It is fallible,” he says.
As a medium for information and value, paper has strengths and weaknesses that are often complementary to digital ones. It is resilient and easy for individuals to read, control, secure and destroy, even when the power goes off.
It can’t be hacked and it doesn’t crash, because unlike most digital systems it has no central point of failure. In some situations, rather than being a throwback to be recycled, paper may be the best information technology we have.