RE: Benefits of the Informal (cash-based) Economy to the State...

I imagine you're right, cash is here to stay. You speak specifically to Britain; here in the USA cash also remains a mainstay with certain demographic groups, mostly from lower socio-economic layers.

In particular, cash is very popular where small business meets the open marketplace, be it farmers markets, the roadside farm stand, arts and crafts shows and such. Specific to the US, also affairs related to religion... when the donation tray is passed around during Sunday services, it's cash that gets given.. and a lot of people in this country (about 1/3) still attend church weekly.