Member News
By Tony Grew@ayestotheright - 6th June 2011
Members of the House of Lords have condemned plans by the banks to abolish cheques.
Lord Naseby said it is about time bankers "for once thought about the public", as there are "myriads of activities requiring cheques.
He told the House that the payments council is "a banker's quango" and the federation of small business is "totally against" the plans.
Treasury minister Lord Sassoon said while the council is "an industry body", it has independent members of its board and the Bank of England acts as an observer.
He said that any decision to phase out cheques from 2016 will only go ahead if the new system is widely available, widely accepted and widely adopted by consumers.
Lord Sassoon said it is appropriate for the government to work with the payments council to achieve that.
Lord Hughes of Woodside suggested the plans to abolish cheques should be abandoned.
Lord Sassoon said use of cheques has declined from 4bn in 1990 to 1bn in 2009, and there is expected to be "very significant reductions" in the next few years.
He called on peers to be "pragmatic" about the issue.
Former chancellor Lord Lawson said the government should use its shareholdings in banks to encourage at least one institution to continue to offer cheques.
Lord Sassoon said the independent commission on banking and the government believe competition should be at the heart of the banking sector.
He said any new arrangements would have to include a paper-based payment system, and noted that the Commons Treasury select committee has reopened its inquiry into cheques.
Lord Sassoon told the House that public focus on the issue will put pressure on the banks and the payments council to come up with a new system that is widely accepted and adopted.
Baroness Kramer said Germany has already withrawn cheques and anecdotal evidence suggests the result is people, including vulnerable old people, keeping large amounts of cash at home.
Lord Sassoon said the payments council must take all circumstances into account.
Article Comments
The Payments Council recently commissioned some independent research into payment methods and found that 76% of businesses still process cheques in one form or another. Cheques are still relied upon by small businesses and we believe that the UK is currently a long way off being in a position where we would be able to remove cheques as a method of payment.
Jane Bennett, Head of Campaigns, Forum of Private Business
6th Jun 2011 at 5:11 pm
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