MP challenges Payments Council over abolition of cheques
03 November 2010 | 9069 views | 0
A UK Member of Parliament has launched a bid to "save" the cheque, which the Payments Council is planning to ditch in 2018.
Liberal Democrat MP David Ward has introduced a 10 minute rule bill (used to raise awareness rather than change law) that would bring cheque payments under the consumer protection remit of the Financial Services Authority or its successor.
Currently the Payments Council, and its member banks, have the power to decide on the fate of cheques. In December these members voted to stop clearing cheques by 31 October 2018, although a review will be conducted in 2016 to determine whether sufficient progress in developing alternative payment channels has been made to press ahead.
However, Ward says: "The truth is that setting an end date for cheques will inevitably accelerate the process by which businesses stop accepting cheques and individual banks stop issuing them, making the demise of the cheque a self fulfilling prophecy."
He argues that any decision should be made by a body that has the "independence, objectivity and the competence" to balance the needs of consumers with the savings to the banks, and be accountable to Parliament.
Ward's campaign is supported by a plethora of pressure groups and consumer bodies. The Federation of Small Businesses, Age Concern, Help the Aged, Unite, Which?, Royal National Institute of Blind People and the Institute of Fund-raising have all raised concerns about the end of cheques, nearly four million of which are written in the UK every day.
In response to the motion, Paul Smee, CEO, Payments Council, says: "We don't believe that legislation to force banks to keep the cheque is required. The Payments Council has set a target date to close the cheque clearing in eight years' time, but we'll only be going ahead with this date in 2016 if we've been able to ensure that alternatives have been identified, are accessible and are actually being used.
"The Board of the Council which is leading this process includes an independent chair and four independent directors, who are there to ensure that the interests of all cheque users, particularly the vulnerable, are taken into account. Collectively they have the power to veto any decisions."