The Treasury Select Committee has today released its report into the future of cheques.
We are clear that the Payments Council is an industry-dominated body with no effective public accountability. It should not have unfettered power to take decisions on matters, such as the future of cheques, that are of vital personal importance to millions of people.
The attempt to abolish cheques by stealth, and to deter customers from using cheques, has demonstrated the lack of transparency in retail banking, which restricts the exercise of consumer choice. Improving consumer choice will require more competition in the sector, while the payments system must also be capable of taking advantage of innovation in the consumer interest.
We have made a number of wide-ranging recommendations as part of our report:
the Treasury should make provision in the forthcoming Financial Services Bill to bring the Payments Council formally within the system of financial regulation;
the Payments Council must obtain a commitment from the banks to give the Council advance sight of any material related to the future availability of cheques that the banks send to their customers;
all banks should be required to write to their customers stating that cheques will continue to be in use for the foreseeable future;
the Payments Council should examine the reintroduction of the cheque guarantee card;
changes should be made to the composition of the Board of the Payments Council in order significantly to strengthen the voice of consumers. As an immediate first step, any two of the four independent members, rather than all of them as at present, should have the right of veto over a decision of the Council.
We welcomed the announcement last month that the TSC has been able, in the words of our Chairman Andrew Tyrie, to save cheques for the millions of people who still rely upon them every day. As he also says, we need to remain vigilant.