Cheques will not be axed

By Christopher Hope, Whitehall Editor

 
The Payments Council, which represents banks and payments groups, has announced oon that plans to scrap cheques have been dropped.

Charities, small business and campaigners had been outraged at plans end cheque clearing from 31 October 2018.

MPs said the council's decision was "a victory for Middle England".

Pressure will now be on high street shops which had stopped accepting cheques as 2018 approached to start honouring them again.

The Payments Council said in a statement this afternoon “cheques will continue for as long as customers need them....the target for possible closure of the cheque clearing in 2018 has been cancelled”.

Richard North, the council’s chairman, added that after listening to more than 600 stakeholder groups “we have concluded that the cheque is staying”.

He said: “Over the last two years we have learnt a great deal about what is important to our many stakeholders and we are really grateful to all of those groups and individuals who took the time to talk to us and help us reach a decision.

“We will use what we’ve learned to keep improving existing systems, as well as introducing innovation, so that customers benefit from 21st century ways to pay. Innovation must be at the heart of what we do.”

The news comes weeks after Mark Hoban, the Financial Secretary to the Treasury, said cheques could not be scrapped until “a suitable alternative is found”.

In a letter to Andrew Tyrie MP, the chairman of the Treasury select committee, he said: “Until this is demonstrated, I do not believe that there is a credible and coherent case for abolishing cheques.”

Ministers would “intervene… if there is any threat that cheques may be withdrawn without suitable alternatives being put in place at all”, he said. Last year, 620million payments were made by cheque, compared with 6.29billion by debit card, and 1.88billion by credit card.

Cheque use is also fast declining, with 1.1billion cheques written in 2010, down from 4billion 20 years ago.

In an explosive confrontation in the Commons several weeks ago, Mr Tyrie MP told Richard North, the council’s chairman, that the situation was “a shocking mess, a scandal”.

David Ruffley MP, a senior member of the Treasury select committee, said: “This is a victory for Middle England.

"The half a million individuals who sign cheques every year will be relieved that the Payments Council have listened to common sense and performed a U-turn on this ridiculously half-baked proposal.”

The cheque guarantee card was axed at the end of last month. Telegraph