Payments Council must propose paper-based alternative to cheques, says government

08 Jun 2011 News

The government is insisting that the Payments Council’s proposals for an alternative to cheques must include a paper-based system, Lord Sassoon has revealed.

The government is insisting that the Payments Council’s proposals for an alternative to cheques must include a paper-based system, Lord Sassoon has revealed.

Speaking in the House of Lords, the Conservative commercial secretary at the Treasury referred to the government’s insistence that the Payments Council must have an “available, acceptable and widely-adopted alternative system” to replace cheques, and said: “The government have been clear that that must include a paper-based system.”

When asked by Labour’s Lord Hughes of Woodside why the Payments Council was “bothering” to replace cheques with another paper-based system, Sassoon said the decline in use of cheques has meant “it will require a very expensive rewrite of the clearing systems if it [the cheque system] is to continue in its present form”.

Speaking to civilsociety.co.uk, Institute of Fundraising director of policy and campaigns Louise Richards said she was aware of that requirement for a paper-based alternative, but that it was hard to come to conclusions without seeing the proposals.

“I’m on the Payments Council liaison committee for the voluntary and charity sector, and we keep saying ‘if there are alternatives, let’s see them’. We don’t know if they’re viable or accessible if we haven’t seen them.”

However, she added: “The second thing is if they are going to introduce a paper-based system then why abolish cheques, it doesn’t make any sense whatsoever.”

When asked about the cost to banks of a new clearing system, she said: “That statement underlines the fact that the only winners in this are the banks; this is all being done to save them money.”

Later in the debate, Liberal Democrat Baroness Kramer raised the example of Germany, saying that following the abolition of cheques, people who did not want or who were unable to make online payments would simply keep large quantities in their home or their pocket.

Richards said this tallies the arguments the Institute has made about vulnerable people, with research from Age UK showing that 6.3 million people over the age of 65 don’t have access to the internet in the UK.

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