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Treasury Committee reopens cheque abolition question
The Treasury Select Committee will reopen its inquiry into plans to phase out cheques after being inundated by public concern and unconvinced by evidence put forward by the Payments Council.
Doubts about the rigorousness of the Payments Council’s cost-benefit analysis and argument that cheques were doomed to inevitable decline as well as public reaction to the idea has prompted the reopening of the inquiry.
Treasury Committee Chairman Andrew Tyrie MP said that the Council had failed to consider the “millions of people” who are not comfortable with using more modern payment methods.
“Since our last inquiry we have been inundated by letters from the public telling us they rely on cheques,” he said. “Many charities, small business and vulnerable people depend on cheques.”
The Committee has requested that the Payments Council go away and “do some number-crunching” on the cost-benefits of phasing out cheques after Tyrie said he was “shocked” by the lack of such evidence provided by the Council at the last inquiry.
The Institute of Fundraising has been leading the charity sector charge against the plans, claiming that it could have a detrimental impact on charities that rely on cheque donations for income.
Louise Richards, director of policy and campaigns at the Institute, welcomed the news, saying that the organisation had feared that cheque abolition may happen through the back door.
She said that in the absence of any alternatives to cheques being put forward, the Institute would like to see the abolition date put back "at least ten years". The Institute will be calling on members to lobby their own MPs against the bill, due for second reading in parliament in June, and expects to be called to give evidence as part of the enquiry.
The Committee announced today that it would reopen the inquiry, which began last February and followed the announcement in December 2009 that cheques would be abolished by 2018.
Payments Council under the microscope
In this new inquiry it is seeking evidence on what impact the abolition will have on particular groups in society. More broadly it is seeking public opinion on the Payments Council itself, asking for submissions on the topics of whether the Council is accountable, delivering on its core objectives and how it operates within the industry it regulates.
Richards said that while she welcomed the consultation on the Payments Council, she is worried that the consultation may take the place of real change.
"We really want them to show they've been listening to us," she said.
Submissions on the subject must be received by the Committtee by 6 May 2011.
Place a comment
Alexine Crawford
chairman
Woodlarks Camp Site Trust
28 Apr 2011
Payment by cheque ensures that each cheque has two signatures, and provides a ready audit trail. I echo what others have written about cheques making for ease of donating.
For a small business (my other hat) charges for the use of credit cards are disproportionate to their usefulness.
It's news that the Payment Council is a Bank-originated group - yet another example of government by other than our elected representatives?
Nigel Rivers
Partner
Copyshop
28 Apr 2011
As a small business with a low turnover charges for taking cards are unreasonable as are their terms of use. Cheques and cash are the only sensible way for small businesses to function competitivley. Do they want to put small business out of business? It would hardly be in their interest to do so if they examine the number of them that there are.
Jeremy Barker
Specialist Adviser
Scunthorpe CAB
27 Apr 2011
While it is interesting and informative to read the comments here I hope that all the people commenting have also sent a copy to the Treasury Select Committee - they are unlikely to read what is written here.
Lesley Kay
Managing Director
Parallax Consultancy Ltd
26 Apr 2011
I work with many small organisations in helping them to streamline their finances. Cheques are a vital part of their trading or funding activities. Charges for EPOS systems are too high for smaller organisations to have as a standby and customers or donors often prefer to pay by cheque which is a cheaper option for them and the organisations concerned.
Liz Cooley
26 Apr 2011
There are many very good reasons for keeping cheques.Many treasurers of organisations rely almost entirely on transactions using cheques.Many people routinely pay their milk or paper bills by cheque.We send cheques in greetings cards as gifts for grandchildren.Small businesses find it adds to their costs to take electronic payments,and are therefore happy to take cheques.If lost,cheques can be stopped or replaced unlike cash and if stolen,are virtually worthless,as thye literally leave a paper trail. People are not mugged for their chequebooks.We have had many unwelcome practices foisted on us by greedy banks already,including the loss of thousands of branches which made life more convenient for those who do not inhabit cities.Losing the chequebok on top of everything else we have had to endure from our once-caring bank service,would be the last straw for many.
Mrs J Keeling
Hon Treasurer
Glamorgan Family History Society
22 Apr 2011
The majority of people tracing their Family history and buying fiche at £2 or £3 are, by the very nature of the hobby, the elderly. Many of these are too infirm to visit various registry offices, Post offices for postal orders, etc and therefore rely on posting a cheque and having the goods delivered to their home. Many of these customers do not have access to computers, or like me, they do not trust internet banking.
Many of the committee members, including myself are elderly and therefore I find it easier to pay our invoices by cheque than to keep visiting the bank to pay them.
Maureen Selley
Chairman
Devon Family History Society
22 Apr 2011
Devon Family History Society, a registered charity, has approximately 5000 members.
Our annual subscription is £12 per annum. 46% of our members pay by cheque, 33% on-line using a credit/debit card, 16% by standing order and 5% by cash.
Payments issued by us in 2010: Cheques 72%, Direct Debit 28%. BACS payments are only favoured by local councils and large institutions.
What service will replace cheques in 2018? The Payments Council says that they will ensure “a viable paper alternative is in place to satisfy the requirements of the most vulnerable members of our society” and that they are “exploring possible options for a paper-initiated payment instrument that will be made available to all who need it, unless it is no longer required”
"A viable paper alternative"? We have one, it's called a cheque!
JAN SHIPSIDES
CHAIR
RA HALTON GROUP
21 Apr 2011
The RA has a network of local groups across the country who organise various events for members and most groups rely on payment by cheque. My local Group probabaly processes in excess of 150 cheques for amounts less than £25 each month. I am sure that we would not be able to continue our programme of events if we could not accept cheques. I`m sure that many small businesses and all the chairities would agree that the abolition of cheques would have an adverse effect on their activities.
The banks need to listen to their customers and the general public - remember it was OUR money that bailed you out !!!
Derek Liddell
Centre Manager
St James Church and Parish Centre
20 Apr 2011
IT is the lack of a credible alternative that concerns most voluntary and community groups. Any grants given to these groups requires an audit trail that will include signatories on the cheque, on the stub,on the invoice/receipt and verified against a statement. This audit trail cannot be replicated, securely, using cards or electronic banking systems. The impact on voluntary and community groups will be on their ability to access grant funding and consequently on their ability to provide services in the community. This goes right against the "Big Society". The cheque system must be retained for the foreseeable future.
JOHN GRAY
RETIRED
NONE
19 Apr 2011
I can see no good reason for the cheque book to be fased out.
What will it be replaced by?
Cheques are safe, convenient, except for the banks,and easy.
Technology is fine when it works. When it doesn't - chaos.
Next thing will be the banks wanting to get rid of cash!
Nick Brooks
Head of Not For Profit
Kingston Smith
18 Apr 2011
At last commonsense about this issue. Power to the people.The Payments Council was set up by the Banks for the Banks. If pushed the PC say we will replace cheques with some other form of payment system. What writing IOUs on the side of cattle (for those who are either old enough or know the history of cheques.)
Cathy
17 Apr 2011
Cheques are so convenient and easy to use, particularily to post. Why not keep them, but just make them as environmentally friendly as possible e.g recycled paper - no more plastic cards, please.
Yvonne Pryce
15 Apr 2011
I am a member of a church and we use cheques to pay for supplies, to pay our bills etc. we can trace cheques but electronic payment methods do not work for organisations such as ours.
Carol Madden
15 Apr 2011
There is far too much of this, "we will tell you" attitude. Just because some people are able to cope electronically doesn't mean everyone can. I do not even like to use cash machines as I do not trust them. At the present moment I can give a cheque to my grand-children if I wish to. What would I do otherwise. The frighteners have already been put on businesses, who have stopped accepting cheques. Therefore, yes, not as many cheques are been given and accepted. If it isn't broken, why mend it?
Mary Caroe
14 Apr 2011
I see the abolition of the cheque book as a severe handicap to those people, particularly the older members of society who are not computer literate, I pay the milkman, the mobile fish -monger, my staff and many others by cheque , including cheques to charities through CAF. payment would otherwise be difficult. In the country there is no near-by ATM for cash and anyway no-one likes to be carrying a large number of notes.
I hope there will be a major rethink.
John Phillips
Division Treasurer
SSAFA Forces Help
14 Apr 2011
As a treasurer of a division of SSAFA Forces Help I would find it very difficult to carry out the tranactions I have to make to ex-service personnel we help without a cheque book. Many suppliers are not accepting cheques already which is making life for our elderly beneficiaries very difficult indeed not to say the Treasurer.
Catherine Clark
Head of Communications, Marketing & Development
Royal School of Church Music
14 Apr 2011
Peter Sharp is right: when we see something as dangerous as dumb as this, we must NOT assume that 'someone else' is handling it. I make a point of lobbying on every one of these issues and noted with particular concern the small number of charities that formally submitted evidence on the issue of EU legacy clawback regulations. It only took about 50 of us, luckily.
Good attitude in future is to ASSUME no one is on the ball and run with it yourself.
Bob
14 Apr 2011
Another example of the profit motive of banks taking precedent over "public benefit" (written as an ex-banker) ! They never learn and never will whilst the penalties Government and customers (as a Society) fail to punish them sufficiently for their misdemeanours and / or insist on them playing their part as responsible corporate citizens in a modern society.
Peter Sharp
Director
WorldWide Volunteering
14 Apr 2011
Every so often an idea emerges in the public arena which is so ludicrous that everyone thinks someone sensible somewhere will kill it and they have no need to complain themselves, even if they know how to. Abolishing cheques is one of these ideas.
WorldWide Volunteering, a charity, collects a significant proportion of its income by cheque. True, some donors could pay electronically, but a lot will not. For example, the more elderly supporters who are prepared to write and post a cheque for tens, hundreds or even thousands of pounds but who would not bother to try to set up any kind of electronic system for donating, or to log onto a website or telephone us to use a credit card. We will lose them. Many charities will face this problem if cheques are abolished.
There is also the inconvenience of not having cheques to settle private transactions. As I cannot pay her by credit or debit card, would I really want to have to try to pay my sister by electronic means for my share of a family holiday she might arrange? It's much easier to post a cheque: there is no mucking about with computers or telephones, and it can be done almost anytime, anywhere.
When an idea is proposed which would cause widespread disruption and inconvenience for many, the ancient Roman question should be asked: "Cui bono?", or "who benefits?" I do hope that question is being asked of the Payments Council.
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H C Leivers
5 May 2011
I have just been informed that my Dentist will no longer accept cheques, as the Bank will not process them (or at least will charge an exorbitant amount per cheque to do so).
Is this an example of Banks 'manipulating' the market to suit their agenda? (Don't process cheques; point out that cheque use is in decline; get rid of cheques; job done!)
It would seem that customers will now have to draw about £100+ (or whatever the maximum cost of treatment is), to visit the Dentist - carry it around, 'till they get to the Dentist's, and perhaps return, to pay some of it back in (how does one know, prior to the treatment, how much it will cost?)[and with Banks closing branches, try finding a Bank in some places!]. Lots of dentists aren't big enough to warrant the costs of a machine and its associated operating costs.
Just where is the 'Customer service within the Financial Sector???
[Reply]
David Matthews
6 May 2011
Response to [H C Leivers]
My Dentist for the last 12 years only accepted cheques because of the charges made by the Banks to process a credit card. He has now retired to Spain where like Hollland cheques are no longer used! However, my current car insurance Co. CHARGES a fee for both a Direct Debit OR Credit card payment and this is where it will all end up the Banks making money just to process your money similar to ATMs that charge and some do noy. 800,000 small business and say 25% do not have credit card acceptance facilities, the whoile thing is just another scam for the punter to pay up - BT NPower and most utility companies either insist on Direct Debit facilities or make you pay more if you don,t money is money, if the institutions charge us for different types then the whole concept - " Promise to pay The bearer" concept is destroyed, Then there are 5 Million senior citizens a lot of whom do not have the facilities the Banks insist upon, once again another law/rule NOT in a Mandate and steered through by big business!
[Reply]