In the wake of a battle over the future of cheques, the UK's Treasury select committee has published a report recommending a range of measures designed to strip the industry-dominated Payments Council of much of its power.
In late 2009 members of the Payments Council voted to set a provisional target of 2018 for the abolition of cheques but in April the Treasury select committee reopened its probe into the plans, claiming it had been "inundated with letters".
This prompted a July u-turn from Britain's banks, which scrapped the plans promising that "cheques will continue for as long as customers need them".
Despite welcoming the "belated" decision, the select committee says the Payments Council should "no longer have the unfettered power to decide the future of cheques, or other payment methods that directly affect millions of people".
In its report the committee recommends that the Treasury should use an upcoming Financial Services bill to bring the Council formally within the system of regulation.
The report also calls on the Council to "examine the reintroduction" of the cheque guarantee card scheme which was finally killed off in June and the banks insist will not be revived. Several groups, including Age UK, have argued that the scheme's demise has undermined confidence in cheques which could see demand "wither away".
Meanwhile, to strengthen the voice of consumers, the Payments Council board should be revamped to let any two of the four independent members, rather than all of them as at present, have the right of veto over decisions.
In addition, banks must be made to commit to giving the Council advance sight of any material related to the future availability of cheques that are sent to customers. They should also write to their customers stating that cheques will continue to be in use for the foreseeable future.
Andrew Tyrie MP, chairman, Treasury select committee, says: "Cheques have been saved, for the moment, but we need to remain vigilant. The incentives for the industry to get rid of cheques has not gone away. Neither have we. That is why we are making far-reaching recommendations about the future of the Payments Council as well as to secure the future of cheques."
The Council has indicated a willingness to accede to demands on customer communications and on independent directors but is opposing any move towards greater regulation, claiming it is not required.
You can read the select committee report here:Download the document now 605.5 kb (PDF File)