Government is committed to cheques, Mark Hoban tells Treasury committee

Financial secretary to the Treasury says the government wants banks to retain them

Mark Hoban MP, financial secretary to the Treasury
Mark Hoban MP, financial secretary to the Treasury

The government will take steps to ensure that cheques continue to be available, it says in its response to the Treasury Select Committee’s report on the future of the payment method.

The committee of MPs opened an inquiry into the future of cheques after the Payments Council, which sets the strategy for UK payments, announced in 2009 that it planned to abolish cheques by 2018. In July this year it announced in July that it was abandoning the target.

The committee’s report, published in August, called for continued protection for cheques. The government had two months to respond; the Payments Council was also asked to provide a response, which it did.

In a letter to the committee, Mark Hoban MP, financial secretary to the Treasury, said its response showed "how the government is responding by ensuring that cheques continue to be available".

The letter says there had been no decision by central government to refuse acceptance of cheques.

"Furthermore, the financial secretary to the Treasury wrote to the committee on 14 June 2011 to confirm that the government would consider intervening to ensure that banks keep cheques," the letter says.

"The government has ensured that the Financial Conduct Authority will be able to require banks and building societies to take or refrain from specified action, such as withdrawing cheque services from both new and existing customers."

The Payments Council says in its response that it had already committed to commissioning independent market research to measure the impact of the abolition of cheque guarantee cards, which were abolished in June.

"We will receive the results of this research by the end of year," it says. "If so indicated by the research, we will revisit the business case for the closure of the scheme."

The committee said it wanted more details of its research from the Payments Council, and said there was a case for reintroducing the cheque guarantee card or an alternative mechanism.

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