Fresh attempt to save the chequebook by MP

Image caption,
Cheques have been declining in recent years as cards become popular

An MP is launching an attempt to save the cheque - saying its potential demise is a "cost saving exercise for the banks".

David Ward, the Liberal Democrat MP for Bradford East, said the decision to phase out the cheque was being made by a group with vested interests.

The UK Payments Council says cheques will be phased out by 2018, but only if adequate alternatives are developed.

Mr Ward presented his views to the Commons on Tuesday.

His bill aims to "make provision to ensure that cheque facilities continue to be available to customers of financial institutions and for connected purposes".


His bid was heard under the Ten Minute Rule, which tends to be used by MPs to raise awareness of an issue, rather than a serious attempt to change the law.

Mr Ward told the BBC News website that he wanted the cheque to survive, but also wanted to highlight the issue that the decision to phase it out was being made by a body made up of banks and other businesses in the finance industry,

"The withdrawal of cheques is simply a cost saving exercise for the banks, which are prepared to ride roughshod over the needs of vulnerable consumers and charities," he said.

"My bill will ensure that cheques continue to be available for as long as people want to use them."


The first cheque was written 350 years ago, but the Payments Council said last December that there should be "no scenario" for using cheques by 2018.

Image caption,
Cheques have been used for hundreds of years

It argued that the cheque should be phased out if alternatives systems are found. A final review will come in 2016.

Debit cards have become a much wider form of payment, as cheque use has declined, and new technology is being developed that allows people to transfer money using mobile phones.

But a number of charities told a Treasury Committee hearing earlier this year that older people would have to rely on others, or could hoard cash at home, if cheques disappeared. This was because the elderly, housebound, and disabled still relied on them.

Mr Ward said two million cheques would still be used every day in 2018.

"This is not something that is rapidly withering on the vine," he said.

"It is the preferred option for hundreds of thousands of people and small businesses. Who is going to speak up for vulnerable groups?"

He was concerned that the decision was being taken by the Payments Council, which had a membership including banks and electronic payments groups. He described it as a trade association.

He told the Commons that setting an end date would bring forward the death of cheques ahead of a natural demise.

He said the successor to the City watchdog - the Financial Services Authority - should take such decisions.

Paul Smee, chief executive of the Payments Council, said: "We do not 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 will only be pressing ahead with this date in 2016 if we have ensured that alternatives have been identified, are accessible to users, and are actually being used."

The bill will have a second reading on 17 June, 2011.

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