Lord McFall has questioned the Government over whether it would be advisable to end cheques in the UK, after proposals from the Payments Council to do so.
Putting down written questions in the House of Lords, Lord McFall asked the Government what views they had received from the Bank of England on the proposals, what would be the cost of maintaining the cheque system, and how the merits of any new replacement system would be judged.
Lord McFall also asked the Government what information they had received from the Payments Council on the costs and benefits of replacing the cheque system. The Government confirmed that, to date, there has been no conclusive cost-benefit analysis to justify scrapping the cheque system, although work on this is ongoing.
Many people in the UK rely on cheques to be able to access the financial system. Citizens’ Advice believe that 340,000 people receive their benefits via cheques each month, and other groups, including Age Concern, worry that removing the cheque system would encourage people to leave the financial system altogether and keep cash under their beds. Lord McFall has campaigned for some time to ensure that the financial system is as widely accessible as possible.
Whilst Lord McFall was Chairman of the House of Commons Treasury Committee, the Committee reported that the decision by the Payments Council demonstrated that the body needed to become more transparent and accountable, and called on the Government to confirm it would grant more powers to publicly accountable regulators over the payments system.